OSLO, Norway—Profits at Norwegian telecoms operator Telenor tumbled in 2021, the company announced on Wednesday, with its divestment from Myanmar following last year’s military coup playing a major role.
Annual net profits dropped from 17.3 billion kroner (US$1.93 billion) in 2020 to 1.5 billion kroner last year, with the falling profitability of local subsidiary Telenor Myanmar accounting for almost half of the drop.
The remainder of the fall was due to gains on disposals in 2020 and negative currency effects.
Telenor in July said it would sell its local subsidiary Telenor Myanmar to Lebanese financial firm M1 Group after the army ousted civilian leader Daw Aung San Suu Kyi in February 2021 and brutally repressed dissent.
The deal remains subject to Myanmar regulatory approval.
“That has taken a long time and we are still waiting for that. We don’t know what the outcome will be,” said chief executive Sigve Brekke.
The group’s results, especially fourth-quarter profits of 600 million kroner, fell short of analysts’ expectations.
Earnings predictions for 2022 have been “too optimistic” and concerns over the impact of rising energy prices will reduce estimates for this year, according to Norne Securities analyst Zilvinas Jusaitis.
Telenor shares were trading 4.56 percent lower on the Oslo stock market mid-morning on Wednesday.
Media reports claim the junta is hostile to a sale to M1. Civil society and rights groups have criticized the move as they fear Myanmar’s telecommunications network will be controlled by a firm more conciliatory towards the regime.
In September, Telenor said the military junta demanded it install equipment to intercept communications.
Telenor in January also sold its stake in a digital payment service in Myanmar following the coup and the army’s crackdown on resistance.
Demand for digital services drove Telenor’s results in northern Europe, but stronger competition and the COVID-19 pandemic affected its performance in Asia, with tourism-dependent Thailand suffering in particular.
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