Norway’s Telenor said on Tuesday it had written off the value of its Myanmar operation in light of the country’s deteriorating security and human rights situation, plunging the group into a loss in the first quarter.
Telenor’s mobile operation in the Asian country, where it has operated since 2014, remains severely restricted following the military’s seizing of power in a Feb. 1 coup.
Telenor serves 187 million customers in nine countries across Europe and Asia, of which 18.2 million are in Myanmar.
“We see an irregular, uncertain, and deeply concerning situation,” Telenor Chief Executive Sigve Brekke said in a statement commenting on Myanmar.
“Due to the worsening of economic and business environment outlook and a deteriorating security and human rights situation, we see limited prospects of improvement going forward,” he said.
Based on this, Telenor fully impaired Telenor Myanmar in its first-quarter accounts, booking a loss of 6.5 billion Norwegian crowns ($783 million) and removing the operation from its overall corporate outlook for 2021.
As a result of the impairment, the Telenor group’s net earnings plunged to a loss of 3.9 billion Norwegian crowns in the first quarter from a year-ago profit of 698 million crowns.
Telenor’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for January-March fell 8% year-on-year to 13 billion crowns, while analysts in a poll on average had expected 13.1 billion crowns.
For the remainder of its operations, Telenor reiterated full-year guidance for organic revenue and earnings to remain unchanged year-on-year from 2020 and repeated that capital expenditure would amount to between 15% and 16% of sales.