Telenor: Exchange Rates Contribute to Revenue Drop
PARIS — Satellite fleet operator Telenor Satellite Broadcasting of Norway reported Feb. 8 a decline in revenue and gross profit for 2011, saying much of the drop was due to the strength of the Norwegian kroner.
Oslo-based Telenor, which has four satellites in orbit and one on order for launch in late 2013, said the renegotiation of contracts with its biggest customer, Norwegian television broadcaster Canal Digital, also depressed 2011 revenue, as expected.
The new deal with Canal Digital that went into effect in early 2011 consolidates multiple fixed-price contracts into a single contract that features volume discounts.
For the 12 months ending Dec. 31, Telenor reported revenue of 998 million kroner ($165.7 million), down 7.6 percent from the same period a year earlier before accounting for exchange rate fluctuations.
EBITDA, or earnings before interest, taxes, depreciation and amortization, was 66 percent of revenue, down from 70 percent a year ago.
Telenor said its revenue dropped by 18 million kroner and its EBITDA by 28 million kroner because of the strength of the kroner relative to other currencies in 2011. Against the U.S. dollar, the kroner appreciated some 10 percent in the last six months of 2011.
Outside its home Nordic market, Telenor has positioned itself in Central and Eastern Europe as a less costly alternative to Europe’s two dominant satellite fleet operators,of Paris and of Luxembourg. The company also is taking sharper aim at the maritime market, notably by adding a Ka-band payload to its Thor 7 satellite.
Telenor Satellite Broadcasting Chief Executive Cato Halsaa, in a Feb. 9 statement, said the company in 2012 is focusing on broadening its customer base in Central and Eastern Europe using satellites at its 1 degree west longitude orbital slot.
In addition, Halsaa said, Telenor’s recent decision to allocate some of its existing capacity to maritime markets for data links “provides us with a good growth path for our customers, as well as much-needed capacity to secure new business, which can be migrated to Thor 7 once that satellite is operational. We intend to have both Ku- and Ka-band capacity available for maritime use after the launch of Thor 7.”