Telenor warns of earnings shock after Grameenphone miscalculates

Telenor warns of earnings shock after Grameenphone miscalculates

Telenor has warned that an accounting error at its Bangladeshi unit Grameenphone has had a one-off but substantial impact on its Q2 earnings.

The Norwegian group noted that Grameenphone, which leads the Bangladeshi market, had “discovered some errors related to regular commission payments for prior years” which in turn meant that the operator had “chosen to restate their historical financials”.

Telenor told the Oslo Stock Exchange that it expects its Q2 net profit to be down by NOK622 million ($72.9 million) on its original estimations, with EBITDA likely to be reduced by NOK299 million. It referred to the revision as a “one-time correction”.

Grameenphone has reported its figures ahead of Telenor’s Q2 earnings call today. Compared to Q2 last year, its net profit had fallen from BDT10.4 billion to BDT9.6 billion ($114 million), but its revenue was up from BDT32.6 billion to BDT36 billion.

The unit’s CEO Patrick Foley said that Grameenphone had focused on “modernising and rolling out 4G, covering 62% of the population”, as well as boosting its network resilience via a BDT3.8 billion investment which saw it deploy 1560 new 4G sites.

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