In a last-minute reversal, Australia's Telstra has warned its FY10 ebitda will decline due to an impairment charge on its Hong Kong mobile unit.
The A$170 million ($153.6m) non-cash charge on CSL New World is likely to impact both ebitda and ebit for FY10, Telstra said in a stock exchange announcement.
The decision was made after a test of the carrying value of the CSL assets, Telstra said.
The company had been expecting low-single digit ebitda growth for the full year, but now expects a decline in its reported figures. Its pre-impairment ebitda estimate remains unchanged.
The operator is less than two weeks away from announcing its results for the financial year ended June 30, and a reversal in earnings estimates is unusual at this late stage.
In FY09, CSL New World reported an 8% decline in ebitda to A$239 million, and ebit declined to A$103 million, due mostly to “accelerated depreciation on old networks, following the decision to invest in new network technologies and the acceleration in the phasing out of old networks.”