Telstra cuts forecast on CSL writedown

Dylan Bushell-Embling
02 Aug 2010

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.”

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