Insider information: Terveystalo Plc makes a non-cash impairment-related write-off in the Portfolio Businesses segment

Terveystalo Plc Insider information 20 December 2023 at 08:30 a.m. EET

Terveystalo has completed the Group's regular annual impairment testing and has updated its estimates of the fair value of its assets and liabilities. The basis for impairment testing in 2023 is, for the first time, the new management and reporting structure introduced at the beginning of the year, where Terveystalo Group consists of three reporting segments: Healthcare Services, Portfolio Businesses, and Sweden. The Portfolio Businesses segment includes Public and Private payor Cash Generating Units (CGUs).

As a result of the impairment test, the company will make EUR 55 million write-offs related to goodwill and EUR 29 million write-offs to purchase price allocations relating to public outsourcing customer relationships within the Portfolio Businesses segment public payor CGU. The write-offs totaling EUR 84 million will reduce the fourth quarter 2023 net profit after taxes by EUR 79 million and will be treated as items affecting comparability. After the write-offs, the remaining goodwill related to Portfolio Businesses Public pay CGU amounts to EUR 146 million in total. Write-offs will reduce future PPA-related amortizations by EUR 29 million.

The impaired goodwill was recognised mainly in the acquisition of Attendo Healthcare Services in 2018. Customer relationship write-offs relate solely to the legacy Outsourcing business, acquired in the Attendo transaction that is gradually being phased out. The assumptions on the future profitability of the Portfolio business have not changed.

The write-off of PPAs related to customer relationships will positively impact future earnings per share, due to an approximately EUR 4 million reduction in annual amortizations, net of the tax effect.

The impairment loss will not impact the Group’s loans, cash flows, or capability to pay dividends. The impairment loss will not impact the guidance for 2023, the financial targets of the Group, or Terveystalo Plc's distributable equity.

Terveystalo Plc

For further information, please contact:
CFO Juuso Pajunen
Tel. +358 40 584 9722

Kati Kaksonen, Vice President, Investor Relations, Sustainability & Communications
Tel. +358 10 345 2034
[email protected]

Distribution:
Nasdaq Helsinki Oy
Principal media
www.terveystalo.com