Telia warned a rapid decline in advertising in its TV and Media division related to the Covid-19 (coronavirus) pandemic would have a knock-on effect for its entire business, as it snipped its proposed shareholder payout for 2019.
In a stock market statement, the company said although viewing increased on its media platforms, there had been a swift dip in advertising revenue with global sporting events cancelled due to Covid-19 also taking a toll on pay-TV earnings.
Telia acting president and CEO Christian Luiga (pictured) noted on current estimates the rest of its business would be impacted to a “limited extent”, but cautioned “the longer the current effects and restrictions taken stays in effect, the more likely is a negative impact also on the telco business, which are not quantifiable at this stage”.
EBITDA from its TV and Media division is estimated at nought-to-SEK500 million (zero-to-$50.1 million) for 2020, compared with SEK1.5 billion in 2019: total EBITDA for the year was SEK31 billion.
In response, Telia cut its investor dividend for 2019 from the SEK2.45 per share estimated at its annual results in January to SEK1.80 per share, with a possible review of the situation in the second half of this year. Director salaries have been frozen at 2019 levels.
It plans to revise its 2020 outlook for the whole business “as soon as possible”, though warned previous estimates would not be acheived.
The company pointed to additional potential risk factors from the pandemic including decreased roaming revenue, supply chain issues, accessibility and wellbeing of staff and contactors, and the financial stability of customers.Subscribe to our daily newsletter Back