Telecom Italia (TLIT.MI) on Friday posted a better than expected 14.4 percent rise in full-year core earnings, helped by cost cuts and its domestic operations returning to growth.
Italy’s biggest phone group also said it would spend around 11 billion euros (9 billion pounds) in its home market over the next three years, with 5 billion euros of the total going on speeding up the installation of a nationwide ultrafast broadband network.
Outlining its 2017-19 business plan, the former monopoly network operator said its fibre optic cables would cover 95 percent of Italy by the end of 2019, while its 4G mobile broadband network would reach more than 99 percent of the population by then.
The group, in which French media firm Vivendi (VIV.PA) holds a 24 percent stake, also said it was aiming to make 1.9 billion euros in efficiency savings by 2019.
Chief Executive Flavio Cattaneo, who took over the running of the heavily indebted group last year, has been seeking to cut costs and return the business to growth.
The company reported on Friday that core earnings before interest, tax, depreciation and amortisation (EBITDA) rose 14.4 percent last year to 8.02 billion euros, above analysts’ consensus forecast of 7.98 billion euros, on revenue down a less than expected 3.5 percent at 19.04 billion euros.
The firm also said annual turnover and domestic EBITDA would increase for the next three years, with the latter rising at a low-single digit percentage rate, while the aim is to cut net debt to below 2.7 times reported EBITDA by the end of 2018.
Adjusted net debt stood at 25.12 billion euros at the end of December, down from 27.28 billion a year earlier, helped by the sale of the group’s stake in Telecom Argentina and the expiration in November of a mandatory convertible bond.
The company also expects recovery to continue at TIM Participações SA (TIMP3.SA), Brazil’s second-biggest cellular network operator and majority-owned by Telecom Italia.
Earlier on Friday TIM Brasil reported a stronger than expected fourth-quarter operating margin, pushing its shares to a three-month high.
[Source:- Reuters]
