Telecom Italia's core profit rises 10% in Q2 after network spin-off
MILAN, July 31 (Reuters) -Telecom Italia (TIM) TLIT.MI said its core earnings rose by 10% in the second quarter under a new structure which strips out the domestic network operations sold to U.S. investment firm KKR KKR.N at the start of July.
Earnings before interest, tax, depreciation and amortisation after lease costs (EBITDA-AL) generated by the business emerging from the network sale came in at 957 million euros ($1 billion) in the three months ending June.
That was slightly abovea company-provided analyst consensus of 946 million euros.
Boosted by Brazil-listed unit TIM SA TIMS3.SA, earnings were also helped by a 2.7% rise in domestic revenue to 2.49 billion euros, against a forecast of 2.46 billion euros.
The results provide an early snapshot of TIM's new setup following the sale of its fixed-line network to KKR for 18.8 billion euros, excluding some potential future payments.
Under pressure for years due to stiff price competition on its home market, cash-burning TIM resolved to sell its most-valuable asset to slash its heavy financial burden by 14 billion euros.
TIM said its net debt after lease stood at 21.5 billion euros as of 30 June, before the network sale was completed, and at 8.1 billion euros on a proforma basis.
For the second half of the year, TIM expects to generate a positive free cash flow of 600 million euros, which would be used to cut its financial debt further.
The company confirmed the financial targets provided in March for the business emerging from the network disposal, including a rise in core earnings of between 8% and 9% this year.
Backed by Prime Minister Giorgia Meloni's right wing government, the KKR deal was opposed by TIM's largest investor Vivendi VIV.PA, which had demanded a higher price for the asset and it is challenging the sale in court. ($1 = 0.9239 euros)
Reporting by Elvira Pollina
Editing by Keith Weir and Valentina Za
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
