October 27, 2021
Milan (Reuters) – Italy’s largest telecommunications company, Telecom Italia (TIM), said Wednesday that it has further reduced its 2021 core profit guidance to reflect worsening market conditions.
The board said it discussed the possibility of restructuring to derive value from the group’s assets and requested CEO Luigi Gubitosi to continue investigating options.
Earnings before interest, taxes, depreciation and post-lease intrinsic profit (EBITDA-AL) fell 7.6% year-on-year to € 1.46 billion in the third quarter, an analyst consensus provided by the company: 1.47 billion. It was slightly below the euro.
As expected, domestic sales were € 3.1 billion, down 3.2% year-on-year, according to Europe’s sixth-largest telecommunications group.
Like other European peers, TIM is engaged in fierce price competition in the crowded domestic market, which accounts for nearly 80% of sales.
TIM said it expects organic EBITDA-AL to record mid-single-digit declines this year.
TIM also pushed back its goal of stabilizing domestic service revenues in 2021 and predicted a decline in the low single digits.
Currently, the cumulative free cash flow from 2021 to 2023 is about 3.5 billion euros, up from the previous 4 billion euros.
French media group Vivendi, a source close to TIM’s largest investor behind state lender CDP, said Wednesday that the group continued to commit to supporting TIM despite disappointing results. ..
In July, TIM pushed back its goal of stabilizing core profits this year because of the cost of launching a partnership with DAZN, a sports video streaming app for delivering Italy’s top football games.
(Report by Elvira Pollina, edited by Valentina Za and Aurora Ellis)
Telecom Italia cuts 2021 core profit target due to weak domestic market
Source link Telecom Italia cuts 2021 core profit target due to weak domestic market