Swedish telecoms group TeliaSonera has issued a notice that its fourth-quarter 2013 financial report will include one-time items negatively impacting operating income by SEK2.524 billion (USD391 million), of which SEK2.331 billion relate to non-cash write-downs, primarily of goodwill, and scrapping of IT platforms.
As a result of an overall impairment review, TeliaSonera will record a total SEK1.168 billion non-cash goodwill impairment charge related to mobile and broadband operations in Denmark (Telia) together with its mobile operation in Lithuania (Omnitel).
Further, TeliaSonera will book a non-cash impairment charge of SEK598 million related to the operations acquired in Kazakhstan in January 2013. This relates mainly to the WiMAX operation and is based on the view that it will take a longer time to obtain full usage of the acquired frequencies due to current absence of a 4G licence.
As a result of a new group operating structure, effective 1 April 2014, there will be further consolidation of IT systems and platforms. Combined with a general IT structure review, obsolete systems and platforms with a total book value of SEK565 million will be scrapped or written down, reported as non-cash charges in the 4Q13 results.
TeliaSonera’s total costs in full-year 2013 related to redundancies amounted to just above SEK1.2 billion.
On 1 August 2013, TeliaSonera’s Spanish subsidiary Yoigo entered into an agreement to divest mobile telephony towers to Abertis Telecom for a projected SEK530 million-SEK620 million in the fourth quarter of 2013. However, the number of towers included in the transaction has been reduced, and therefore total sales proceeds will amount to around SEK350 million-SEK440 million. The transaction was partly finalised in 4Q13 with a positive cash flow impact of SEK230 million, of which SEK179 million is reported as a net gain.
Finally, due to four major storms in Sweden at the end of 2013, extra maintenance costs for fault handling will impact broadband services in Sweden in 4Q13 by SEK143 million.