Stock Exchange Release 21/1/2009 13:30
Sanoma recognises an impairment loss of some EUR 78 million on the goodwill and immaterial rights of Sanoma Magazines International on the fourth quarter of 2008, due to weakened growth expectations. The recognition of the loss will not affect the Group's dividend policy or ability to pay dividends.
Sanoma Magazines International is responsible for the Group's magazine and online operations in Central Eastern Europe and Russia. The short-term outlook of these businesses has weakened due to changes in market conditions. The general economic uncertainty will affect especially the advertising income generated in these countries. In addition, the exchange rates used in consolidating the operations in CEE countries and Russia with the Group's financial statements have weakened against euro.
Sanoma Magazines International's balance sheet includes, after the impairment, in total some EUR 215 million in goodwill and immaterial rights booked in connection with acquisitions. Sanoma's assets are tested for impairment annually in accordance with IAS 36 and in addition to this recognition of impairment loss, no other impairment needs have been identified.
The non-recurring impairment loss will weaken the Group's result for 2008 by some EUR 78 million. Sanoma's net sales in 2008 is expected to be over EUR 3 billion. Previously the Group expected operating profit excluding non-recurring items to be at the previous year's level. Due to economic environment, operating profit excluding these items is now estimated to be almost at the previous year's level. The impairment loss recognised will slightly decrease the Group's equity ratio but Sanoma still clearly exceeds the demands of solidity in its loan agreements. Sanoma will publish its Full-Year Result for 2008 on 10 February 2009 at around 11 am Finnish time.
Chief Financial Officer
Sanoma inspires, informs and connects. We bring information, experiences, education and entertainment to millions of people every day. We make sure that quality content and interesting products and services are easily available and meet the demands of our readers, viewers and listeners. We offer challenging and interesting employment for over 20,000 people in 20 countries throughout Europe. In 2007, the Group's net sales totalled EUR 2.9 billion.