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Telstra takes $273m hit from US writedown

AAP  |  02 Feb 2018Text size  Decrease  Increase  |  
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SYDNEY - [AAP] Telstra (ASX: TLS) will take a $273 million hit in its first-half results after writing off the value of its US streaming business.

The telecommunications provider on Friday said it will write down the value of video tech firm Ooyala--which it took control of in 2014--to zero and book an impairment charge of $273 million against goodwill and other non-current assets.

Telstra built its stake in Ooyala to 98 per cent between 2012 and 2016, but in 2016 was forced to write down its investment by $246 million due to what it said at the time were changing market dynamics.

Telstra on Friday said turnaround efforts since then had not been as successful as hoped.

"When we announced the initial impairment 18 months ago ... we believed Ooyala remained a young and exciting company with leading offerings in intelligent video which were continuing to evolve and scale," said Telstra executive Stephen Elop, who is also chairman of Ooyala.

"While some of these initiatives have been successful, the market has continued to change."

Mr Elop said Telstra was looking for Ooyala to exit ad tech--which had not performed well--but still saw a future for its video player and workflow management system despite them having yet to achieve scale.

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At 1125 AEDT, Telstra shares were down 0.5 cents, or 0.14 per cent, at $3.635.

Telstra, which in 2017 reported a 32.7 per cent drop in full-year profit to $3.9 billion, is scheduled to report its first-half results on February 15.

 

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© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

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