Telia warns of $400 million writedown amidst TV sale rumours

The Swedish operator disclosed that having carried out an annual review of the value of its assets, it sees the need to perform non-cash impairments totalling 4.1 billion kronor (US$393 million) that will, naturally, impact on its fourth-quarter and full-year 2023 financials, due for publication on Friday.

The writedowns suggest problems in Finland, more than anything; SEK2.8 billion of the total relates to the value of the telco's business there, while SEK0.9 billion in goodwill relates to its TV and Media business.

"The impairments follow from changes to investment plans, market conditions and the regulatory environment," Telia said.

The Finnish market has been tricky for Telia for some time. In fact, this time last year it booked an even larger writedown – SEK19.8 billion (US$1.94 billion) – largely due to the macro-economic situation affecting its Nordic businesses. Again, the largest portion of the total – SEK9.5 billion – was attributed to Finland.

In the third quarter of 2023 Telia talked up its performance in Finland, its second largest market after Sweden, highlighting like-for-like service revenue growth of 1.9%, which came in just shy of its overall group level and domestic performance. It also noted mobile customer growth, but a closer look at the numbers shows this was driven entirely by machine-to-machine connections. Nonetheless, there's very little in the headline figures that suggests a massive problem.

Doubtless we will discover more when the next set of quarterlies land. In the meantime, it's the operator's TV business that is grabbing all the attention.

Telia has been holding talks with a number of parties interested in acquiring its TV4 business, Swedish news outlet Affärsvärlden reported. Those parties include Bonnier, the group that sold the business to Telia less than half a decade ago, as well as Schibsted and Danish media house Egmont, it claimed.

Its sources said Telia is negotiating a price tag of less than SEK5 billion (US$480 million), possibly in the SEK3 billion-SEK4 billion range, which is particularly noteworthy given that the telco paid SEK10 billion for the assets from Bonnier in 2019.

That could be a decent result for Telia though. In a follow-up piece Affärsvärlden quoted former TV4 CEO Jan Scherman as saying that the Bonnier family must have "laughed all the way to the bank" when they sold the asset, and that Telia should be "happy and grateful" to take home even half of the original purchase price.

That same piece, translations all courtesy of Google, suggests that Telia could meet some resistance from Sweden's Ministry of Finance, 41% owner of the telco, despite the fact that it has historically had concerns over state involvement in the media market. Presumably the reported purchase price would not sit well, although it's not wholly clear from the article.

We will see what Friday's results publication and Q&A bring.