Telia Earnings: Strong Nordic Performance and Reduced Leverage Are Good for Dividends

One highlight in narrow-moat Telia's fourth-quarter 2023 results was a SEK 4.1 billion noncash impairment charge that had already been announced on Jan. 24. The charge corresponded to the Finland (SEK 2.8 billion) and TV and media (SEK 0.9 billion) divisions. The TV and media business has been a continuous headache for Telia since 2020 and was a poor capital allocation decision in our view. Affärsvärlden, a Swedish business magazine, has reported Telia could be considering a sale of its TV and media business, a decision we consider to be favorable, given it is in structural decline. We maintain our SEK 29 fair value estimate as the poor performance of TV and media was offset by strong revenue and EBITDA performance in almost all geographies.