TeliaSonera's Q4 operating profit to take €234M hit

TeliaSonera said its operating profit for the fourth quarter of 2014 would take a SEK2.2 billion (€234 million/$271 million) hit, mainly because of write downs on its Eurasian businesses.

The Sweden-based operator said it would record a SEK1.5 billion non-cash impairment charge related to goodwill and other fixed assets in Tajikistan, Georgia and Moldova.

"The economic uncertainty in these three countries has impacted our long term view on the value," the company added.

TeliaSonera further noted that it would record a non-cash impairment charge of SEK381 million associated to a WiMAX operation acquired in Kazakhstan in January 2013. Other charges relate to the adaptation of its IT platform to support its convergence strategy.

"As a result, obsolete systems and platforms with a total book value of SEK270 million will be scrapped or written down, reported as non-cash charges," the company said.

TeliaSonera had enjoyed what analysts at Jefferies called a "solid" third calendar quarter last year on the back of improvements to its Swedish and Finnish operators, despite a near 13 per cent fall in net income year-on-year.

In its third-quarter earnings statement, the company also said profitability in Eurasia remained solid and subscription growth accelerated, supported by positive net intake in all of its seven markets there.

In November 2013, TeliaSonera fired its then CFO Per-Arne Blomquist and three other executives following a wider review conducted by law firm Norton Rose Fulbright into business practices at its Eurasian operations. Former TeliaSonera CEO Lars Nyberg had stepped down in February of the same year after a review by lawyers censured the company over corruption allegations related to the operator's purchase of a phone licence in Uzbekistan.

Christian Luiga was appointed as the company's CFO in April 2014.

For more:
- see this TeliaSonera release
- see TeliaSonera's Q3 interim report

Related Articles:
TeliaSonera Q3 performance welcomed by Jefferies analysts
TeliaSonera latest to reveal authorities' communication-interception requests
TeliaSonera appoints Christian Luiga as CFO
TeliaSonera ordered to provide financial cover for Uzbekistan investigation
TeliaSonera second operator to face Dutch probe into Uzbekistan business

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