TeliaSonera to report Region Eurasia as discontinued operations in Year-end Report 2015 - results to be impacted by impairment charges
As previously announced, TeliaSonera has initiated a process to reduce its presence and over time fully leave Region Eurasia. This process is progressing and therefore Region Eurasia will be reported as held for sale and discontinued operations in the Year-end Report 2015. As a result, operating income in the fourth quarter 2015 will be impacted by a non-cash impairment charge of SEK 5.3 billion related to the operations in Uzbekistan. Further, a non-cash impairment charge of SEK 1.9 billion related to the operations in Denmark will also be recorded.
“We are well on track shaping the new TeliaSonera and the process to reduce our presence in Eurasia continues. An important step was taken in December when we announced the divestment of Ncell in Nepal. As a consequence of this progress and current status in the overall divestment process, Region Eurasia will be reported as discontinued operations. When doing this we are obliged to change valuation method for these operations. This has resulted in an impairment charge relating to our operations in Uzbekistan”, says Johan Dennelind, President and CEO.
The valuation method of the operations in Region Eurasia is changed according to IFRS. The new method is based on market values reflecting estimated sales proceeds (fair value less cost to sell), while in prior periods valuation has been based on discounted cash flows from continuing operations (value in use). This results in a non-cash impairment charge of SEK 5.3 billion related to goodwill and other fixed assets in Uzbekistan. The valuation is based on an overall assessment of the input from the sales process and the risk in the country.
As a result of an impairment review of the group’s operations, TeliaSonera will also record a SEK 1.9 billion non-cash impairment charge related to goodwill in Denmark. The write-down is a result of updated earnings projections following the previously announced decision to withdraw from the proposed joint venture with Telenor in Denmark.
Region Eurasia will be reported as discontinued operations on separate lines both in the consolidated income statement and consolidated statements of financial position for the fourth quarter and full year 2015. Historical pro forma figures for the period first quarter 2014 to third quarter 2015 will be available at www.teliasonera.com/ir on January 19, 2016.
TeliaSonera’s Year-end Report 2015 will be released on Friday, January 29, 2016, at around 7:00 AM (CET).