Telnet Holding Reports Significant Loss of 3,951 Mtnd in 2023
Telnet Holding has reported a significant loss of 3,951 Mtnd for the 2023 fiscal year, compared to a profit of 8,051 Mtnd the previous year. This news is a major disappointment for shareholders, who saw the company's revenue increase by 10.3% to 61,032 Mtnd by the end of the year.
Record Downturn in Profitability
The company's profitability was severely impacted by record-high provisions and amortizations of 13,142 Mtnd. The majority of these provisions, amounting to 10,774 Mtnd, were made for risks and charges.
Fiscal Control and Customs Inspection
During the year, Telnet Inc. received a notice of in-depth fiscal control covering the periods from 2019 to 2021. Additionally, a partial notification was sent to the company on December 29, 2023, regarding a total amount of 2,258 Mtnd, including 0,981 Mtnd in principal and 1,276 Mtnd in penalties, covering the periods from 2015 to 2019.
Customs Inspection and Provision
After the fiscal year-end, in January 2024, Telnet Holding was subject to a customs inspection regarding investments made abroad and exported products. The company estimated, in consultation with its advisors, the amount of penalties and fines to be 10 Mtnd. A reconciliation request was sent on April 19, 2024, to reduce the amount. The case is ongoing, and a provision of the same amount has been made.
Additional Fiscal Control Notification
Two months later, Telnet Inc. received an additional fiscal control notification covering the periods of 2020 and 2021, for a total amount of 4,560 Mtnd, comprising 2,503 Mtnd in principal and 2,057 Mtnd in penalties. The company has opposed the notifications and provided the necessary explanations and justifications, estimating that the risk of fiscal control is significantly lower than the amounts claimed, with a provision of 1,000 Mtnd recorded on the balance sheet. The control procedure is ongoing.
Dividend Distribution Despite Challenges
Despite this series of bad news, the board of directors has decided to distribute a dividend of 0.250 Tnd per share, as the parent company's accounts, on which the result allocation is based, are in positive territory. However, we believe that the stock will be heavily penalized on the market, at least in the next two sessions. To be continued.