CORRECTED-UPDATE 1-Tele2 says ruling, Croatia impairments weigh in Q3
(Removes quotation marks in 5th paragraph)
* 88 mln SEK in Croatia goodwill impairment
* 162 mln SEK in Croatia fixed asset impairments
* Q3 also hit by 288 mln SEK following court ruling
STOCKHOLM, Oct 12 (Reuters) - Tele2 will book a 538 million-crown ($82 million) hit to third-quarter operating profit due to impairments at its struggling Croatian business and an adverse court ruling, the Nordic telecoms group said on Friday.
Tele2 Croatia has been underperforming since the start of the year and in July, the company changed its target for the unit forecasting a profit margin before depreciation and amortisation of 4-6 percent in 2012. Previously it had a target of an EBITDA margin of 20 percent by the third quarter of 2013.
Shares in Tele2, which is due to post third-quarter earnings on Oct. 18, were down 0.7 percent at 0846 GMT, slightly underperforming the wider market in Stockholm and the DJ Stoxx 600 European telecoms index.
"It's not shock horror news," Handelsbanken Capital Markets analyst Thomas Heath said.
The operator had already flagged this summer that the Croatian unit, which accounts for a mere 3 percent of sales, isn't developing the way they had hoped.
Tele2 said in a statement the goodwill impairment for Croatia accounted for 88 million crowns and impairment of other fixed assets in the country for 162 million of the total of 538 million crowns. After the impairment, Tele2's goodwill will amount to 10 billion crowns.
Tele2 also said it had lost a court case in Sweden regarding a share option deal and that it had paid the counterparty 288 million crowns in accordance with the verdict, affecting the third quarter operating profit by the same amount.
In the second quarter, the group made an operating profit of 1.4 billion crowns.
($1 = 6.5566 Swedish crowns) (Reporting by Anna Ringstrom; Editing by Toby Chopra)
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