TeliaSonera said it will take a total impairment charge of SEK7.2 billion ($844 million) in its Q4 2015 results, relating to operations in Uzbekistan and Denmark.
The Swedish operator, which last year announced plans to reduce its presence, and eventually exit, from its operations in Eurasia, said it will also now report the region as “held for sale and discontinued operations” in its year end 2015 report.
As a result of the change, accounting valuation will be based on market values reflecting estimated sales proceeds, and not on discounted cash flows from existing operations. The change means a non-cash SEK5.3 billion impairment charge in Uzbekistan, which relates to goodwill and other fixed assets in the country.
It will also take a SEK1.9 billion non-cash impairment charge as part of a goodwill review across its operations in Denmark, with the write down reflecting an updated earnings projection. This was revised after both TeliaSonera and Telenor decided in September to withdraw from merging operations in the country.
New TeliaSonera “well on track”
The company said in September it would eventually make an exit from its seven operating markets in the Eurasia region, as part of a strategy of creating “the new TeliaSonera”.
As part of the plan, it is seeking to focus on developing its operations in Europe and in its home market of Sweden. The exit in Eurasia came amid bribery and corruption allegations in certain markets, with the company currently facing an ongoing probe over its activities in Uzbekistan.
It made its first major step towards reducing its presence in Eurasia after announcing a deal to sell Nepalese operator Ncell to Malaysia’s Axiata last month.
Johan Dennelind (pictured), president and CEO of the company, said it is “well on track shaping the new TeliaSonera and the process to reduce our presence in Eurasia continues”.
TeliaSonera’s 2015 year-end report will be released at the end of this month (29 January).