Thursday, 27 July 2017

Telia issues Q2 profit warning on Uzbekistan writedown

By Nick Wood, Total Telecom
Monday 17 July 17

Telco to take SEK1.2 billion hit on operating income, SEK2 billion hit on net profit.

Telia has warned that second quarter earnings will take a hit mostly due to a writedown in Uzbekistan. The Sweden-based telco has slashed the risk-adjusted, debt-free value of its Ucell unit to SEK1…

Telia has warned that second quarter earnings will take a hit mostly due to a writedown in Uzbekistan.

The Sweden-based telco has slashed the risk-adjusted, debt-free value of its Ucell unit to SEK1.3 billion (€136.52 million) from SEK3.3 billion due to increased regulatory and currency risks in Uzbekistan. Telia said its Q2 net profit from discontinued operations will include a SEK1.5 billion impairment loss related to Ucell.

Telia has also written down the value of its 50% stake in TOO Rodnik by SEK300 million. Rodnik owns Kazakhstan satellite services provider Kaztranscom.

"The asset is no longer deemed having a recoverable value," Telia said in a statement last week.

Telia is in the process of pulling out of Eurasia following allegations of corruption in Uzbekistan. It will instead focus on its operations in the Nordic and Baltic regions.

Telia also warned that operating income from continuing operations will be impacted to the tune of SEK1.2 billion.

This resulted from a SEK1.2 billion capital gain from the sale of its credit management services unit Sergel being offset by a SEK1.8 billion capital loss from the sale of shares in Turkcell, and a SEK600 million writedown of its IT and network assets.

Telia is due to publish its second quarter financial results on Thursday.

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