Brazil helps Telecom Italia to meet expectations

Credit: REUTERS/Stefano Rellandini

Telecom Italia (TIM) broadly met forecasts with its second-quarter core earnings on Thursday as its Brazilian business offset stalling growth and tougher competition in the domestic market for Italy's biggest phone group.

Adds Enel comment on broadband plan

MILAN, Aug 1(Reuters) - Telecom Italia (TIM) TLIT.MI broadly met forecasts with its second-quarter core earnings on Thursday as its Brazilian business offset stalling growth and tougher competition in the domestic market for Italy's biggest phone group.

The former monopoly, whose shareholders include French company Vivendi VIV.PA and investment group Elliott, also confirmed its guidance for the next three years.

TIM said its organic earnings before interest, tax, depreciation and amortisation (EBITDA) fell 2.6% to 1.9 billion euros, matching an analyst consensus provided by the company.

Revenues in the quarter fell by 0.4% to 4.5 billion euros, marginally below expectations of 4.55 billion euros.

Domestic sales fell by 3.4% to 6.704 billion euros in the first six months of the year.

TIM's Brazilian subsidiary this week posted a 26% rise in second-quarter net profit, beating market expectations.

TIM's net debt at the end of June fell to 24.7 billion euros, a reduction of 539 million euros compared with the end of last year.

TIM has signed a non-disclosure agreement with Open Fiber owners state lender CDP and utility Enel ENEI.MI to kick off talks on ways of integrating its fiber optic network with their venture, including a possible merger.

The head of Enel, Francesco Starace, said on Thursday that he was prepared to take his time to work on a broadband deal but that it was a goal worth pursuing.

"Anything that speeds up and makes more efficient the cabling of the national system is welcome and I think could create value for all the shareholders," Starace said as Enel presented its results.

(Reporting by Elvira Pollina Editing by Keith Weir)

((elvira.pollina@thomsonreuters.com; 0039 0266129486; Reuters Messaging: elvira.pollina.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More