Profit warning: Teleste records a goodwill impairment and a restructuring provision for the services business in Germany amounting to a total of EUR 9.3 million

Turku, Finland, 2017-07-14 08:00 CEST (GLOBE NEWSWIRE) --
TELESTE CORPORATION  STOCK EXCHANGE RELEASE    14.7.2017   AT 09:00

PROFIT WARNING: TELESTE RECORDS A GOODWILL IMPAIRMENT AND A RESTRUCTURING PROVISION FOR THE SERVICES BUSINESS IN GERMANY AMOUNTING TO A TOTAL OF EUR 9.3 MILLION AND CHANGES ITS FINANCIAL OUTLOOK FOR 2017

 

Due to the negative profitability development in the services business in Germany, Teleste makes EUR 7.7 million impairment in the goodwill which will be reported in Teleste’s half year financial report. This will not affect the Group’s cash flow.

Teleste has also recorded a provision to cover the costs related to the restructuring of the services business in Germany. The provision amounts to EUR 1.6 million and is intended for covering restructuring costs carried out during the remainder of the year.

The above mentioned impairment and provision, weakened outlook for the services business in Germany and the low share of orders received scheduled for 2017 lead to new outlook statement for 2017. Business outlook is still favourable in the medium term.

 

New guidance for the 2017 outlook

We estimate that net sales for 2017 will be lower than in 2016 and that the operating profit for 2017 will be clearly lower than in 2016. The operating profit for the second half of the year is estimated to be clearly better than that for the first half of the year. 

Earlier guidance for the 2017 outlook

We estimate that net sales and operating profit for 2017 will remain below the 2016 level, due to the low order backlog in the beginning of the financial period, the adaptation measures in services business in Germany and the investments in growth in new market areas.

 

TELESTE CORPORATION

Jukka Rinnevaara
President and CEO

 

ADDITIONAL INFORMATION:
Jukka Rinnevaara, phone +358 400 747 488

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