Region Eurasia to be reported 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).
TeliaSonera AB discloses the information provided herein pursuant to the Swedish Securities Markets Act and/or the Swedish Financial Instrument Trading Act. The information was submitted for publication at 08:00 a.m. CET on Jan 14, 2016.
For more information, please contact the TeliaSonera press office +46 771 77 58 30, email@example.com, visit our Newsroom or follow us on Twitter @TeliaSoneraAB.
Statements made in the press release relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of TeliaSonera.
TeliaSonera provides network access and telecommunication services in the Nordic and Baltic countries, the emerging markets of Eurasia, including Russia and Turkey, and in Spain. TeliaSonera helps people and companies communicate in an easy, efficient and environmentally friendly way. Our ambition is to be number one or two in all our markets, providing the best customer experience, high quality networks and cost efficient operations. TeliaSonera is also a leading wholesale provider who owns and operates one of the world’s most extensive fiber backbones. In 2014, net sales amounted to SEK 101.1 billion, EBITDA to SEK 35.2 billion and earnings per share to SEK 3.35. The TeliaSonera share is listed on Nasdaq Stockholm and Nasdaq Helsinki. Read more at www.teliasonera.com.