Telia Company beats cashflow forecast, proposes dividend

Telia Company beats cashflow forecast, proposes dividend

Allison Kirkby.jpg

Telia Company has beaten its own third quarter operational cash flow forecast by a significant margin, recording SEK 12.1 billion ahead of its year-end report.

Telia Company - headed by Allison Kirkby (pictured) - originally expected to record operational cash flow in “the upper end of SEK 9.5-10.5 billion”. It said the final figure of SEK12.1 billion is "significantly above the outlook provided" due to working capital and "greater benefits accruing in 2020 than anticipated".

Further details will be revealed when Telia Company announces its full results on 29 January.

The Nordic telco generated an adjusted fourth quarter EBITDA broadly in line with the stated outlook in the third quarter report of around SEK 30.5 billion for the full year. It has proposed a dividend of SEK2 per share, which the board of directors said is "a sustainable minimum dividend level for the coming years".

This dividend represents 67% of operational free cash flow for the year, "and is linked closely to the more structural elements of the operational free cash flow".

However, operating income for Q4 of last year "will be impacted by a non-cash SEK 7.8 billion impairment charge related to Finland".

On this point the company said: "Having conducted the annual review of the carrying value of the various assets in the business the company has identified the need to take a non-cash impairment of Telia Company’s Finnish business unit amounting to SEK 7.8 billion. This will negatively impact the operating income for the full year report January-December 2020. For both 2018 and 2019 the sensitivity analysis showed that the recoverable amount for Finland was very close to the carrying value. Covid-19, a slightly weaker underlying performance as well as increased network investments versus the original business plan have resulted in the need for a non-cash impairment."

A new CFO and COO were appointed to the firm in July last year, and in its Q3 results Telia Company reported an estimated SEK 600 million impact on service revenues from Covid-19 due to lower roaming and advertising income.


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