More record profits, and some losses

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State oil company Statoil reported more record profits on Tuesday after another year of high oil prices and major discoveries on the Norwegian Continental Shelf. Two other big companies in which the state has ownership stakes, though, reported some large losses.

Statoil continues to pump up profits from its oil and gas operations. Pictured here, the Sleipner platform off Norway. PHOTO: Statoil/Dag Myrestrand

Statoil remains on a roll, pumping oil revenues and profits into the state treasury and the hands of other investors. It reported adjusted after-tax earnings (external link) in the fourth quarter of NOK 14.5 billion (USD 2.5 billion), up from NOK 11 billion in the same quarter the year before. Annual earnings were still deemed preliminary, but Statoil said it paid NOK 112.6 billion in taxes during 2011, up from NOK 92.3 billion in 2010. Net operating income amounted to NOK 211.8 billion, up from NOK 137.3 billion in 2010.

“Statoil delivered record financial results, further improved safety and made important strategic progress in 2011,” declared Statoil’s president and chief executive, Helge Lund. He was referring to the discoveries of potentially huge new oil and gas deposits off the Norwegian coast which are generally believed to extend Norway’s oil age for many more decades.

Quarterly loss at Telenor
The state, by contrast, suddenly faces big losses on the stake it still holds in telecoms firm Telenor, which evolved from the former public telephone utility in Norway. After posting billions in profits in 2010, Telenor took a loss of NOK 1.7 billion during the fourth quarter of last year, tied to its troubled investment in mobile telephone operations in India.

The loss compares to a profit of NOK 3.4 billion in the fourth quarter of 2010. Company officials said their “challenges in India” are the reason for the quarterly losses now. For the year as a whole, Telenor earned NOK 13.3 billion in profits, down from NOK 20.2 billion in 2010.

Last week Telenor announced it was writing down its investments in India by NOK 4.2 billion (USD 700 million) after India’s highest court ruled in favour of yanking mobile phone licenses held by Uninor, Telenor’s joint venture company in India. The licenses were initially obtained by the Indian company Telenor bought into to form Uninor, Unitech, which is embroiled in a corruption case that spurred the high court ruling.

Telenor chief executive Jon Fredrik Baksaas told Norwegian Broadcasting (NRK) that competition in India was extremely aggressive, and that Telenor now was evaluating all option regarding its further involvement in the country. The company got some support from the highest government levels on Monday.

SAS’ profit outlook spoiled again
Scandinavian Airlines (SAS), meanwhile, had to report another big pre-tax loss of SEK 1.6 billion even though revenues rose and SAS carried more passengers last year. The loss disappointed SAS executives who had hoped to finally post some black ink after years of turbulence.

The loss was blamed on the recent  bankruptcy of Spanair, in which SAS had ownership and cooperation interests. Spanair cost SAS around SEK 1.7 billion, according to chief executive Rikard Gustafson.

“After adjusting for the effect of Spanair, we delivered marginally positive results,” said Gustafson, but admitted the bottom-line loss was “disappointing.” SAS otherwise could report a strong 7.8 percent increase in passengers during 2011 and revenues of SEK 41.4 billion, up from SEK 41.1 billion in 2010.

Views and News from Norway/Nina Berglund

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