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The Board of Directors of Sampo plc has today, in connection with the approval of the Financial Statement Release for 2020, decided to impair the book value of the Nordea shares from EUR 8.90 per share to EUR 7.50 per share at the end of December 2020. The impairment loss affecting Sampo Group’s net profit for 2020 is EUR 899 million.
On 31 December 2020, Nordea’s book value per share, after consolidating Nordea’s fourth quarter, amounted to EUR 8.90 exceeding its market value of EUR 6.67. Sampo performed an impairment test in accordance with IAS 36 Impairment of Assets where the recoverable amount for Nordea was compared with its carrying amount in the Group. The recoverable amount was defined by using a discounted cash flow model. Based on the value in use test, the recoverable amount was EUR 7.50 per share. As a result, an impairment loss of EUR -899 million was recognized in the income statement, bringing the carrying amount per share to EUR 7.50 at 31 December 2020. The total carrying amount of Nordea in Sampo Group at 31 December 2020 was EUR 4,822 million.
Nordea’s market price has for a protracted period been under the Group’s book value for the Nordea shares. Consequently, Sampo’s Board has, after applying management judgement, today decided to impair the book value of the Nordea shares.
The impairment loss will not impact the dividend paid for 2020 as it is, in accordance with the dividend policy, treated as an extraordinary item in the dividend calculation. Furthermore, the impairment has no impact on Sampo plc’s distributable capital and reserves. Neither does the reported loss have any impact on the Group’s Solvency II or NAV calculations, since these calculations are based on the market price of Nordea shares.
Nordea is an associate to Sampo plc and the book value of Nordea shares held by Sampo in Sampo Group’s consolidated balance sheet increases with the profit share that Sampo books from Nordea and decreases by the dividends Sampo receives. Thus, the book value in the Group’s consolidated balance sheet clearly exceeds the average acquisition price of EUR 6.46 per Nordea share.
Board of Directors
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