MILAN, Nov 9 (Reuters) – Telecom Italia’s (TIM) (TLIT.MI) core profit fell 11.2% in the third quarter from a year earlier as lower domestic revenue offset cuts costs and the contribution of the Brazilian unit of TIM.
Italy’s largest telephone company said on Wednesday profit after interest, tax, depreciation, amortization and lease (EBITDA-AL) was 1.31 billion euros in July-September.
This is in line with analyst consensus provided by the company and down from 1.48 billion a year ago.
Turnover in Italy, where the former telephone monopoly generates most of its turnover, fell 5.3% to 2.92 billion euros, also corresponding to expectations.
Confirming its guidance for the year, TIM said its EBITDA-AL would fall by a “low-teens” percentage rate.
TIM said it is forgoing taking advantage of certain goodwill tax measures in order to use the funds to build its business instead. Consequently, it canceled deferred tax assets for a net amount of 1.96 billion euros.
Adjusted net debt increased by 15% year-on-year to reach 25.5 billion euros at the end of September.
Under pressure for years in its fiercely competitive home market, debt-ridden TIM is seeking an overhaul centered on splitting its operations into multiple units in a bid to reduce debt.
As part of these efforts, TIM is expected to initiate a process to sell a minority stake in its business services arm, a division comprising connectivity services for large enterprises as well as cloud, Internet of Things businesses. and cybersecurity.
TIM has also been in talks over a multi-billion sale of its prized landline network to state lender CDP, which wants control of a national broadband network champion combining TIM’s network with that of its smaller Open Fiber unit.
Sponsored by the previous government of Prime Minister Mario Draghi, the single network project is being reassessed by a right-wing government that was sworn in last month.
A potential overhaul of the plan to create a unified network champion would include a CDP-backed takeover bid for TIM as a whole, with Vivendi (VIV.PA) and infrastructure funds joining the process, it said. sources.
Under-Secretary to the Cabinet Alessio Butti had previously called on CDP to pursue the goal of a unified broadband company taking control of TIM, whose shares are trading at an all-time high.
Reporting by Elvira Pollina; edited by Keith Weir and Valentina Za
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