The day on the stock market has started badly for the Telecom Italia stock, which just a few minutes after the opening is down by more than one and a half percentage points, to 0,812 euros. In the following minutes, however, the loss was reduced to -0,3%. Shares of the telecommunications company closed yesterday in the red by 4,62%, after several downward suspensions and a negative tip to -7%.
The sales were triggered by Telefonica's decision to present an offer for Gvt, the Brazilian landline company of the Vivendi group which was also coveted by Telecom (which aimed at integrating with Tim Brasil, its subsidiary), now displaced in its expansionist goals. Furthermore, as part of the operation, the Spanish also offered the French 8,1% of the capital of Telecom.
Faced with these unexpected changes, the group's return to profit was not enough to decisively reverse the stock market trend. Shortly before the start of trading, Telecom announced that it had closed the first half with profits of 543 million, against the loss of 1,4 billion recorded in the same period of 2013 due to the write-down of goodwill.
Revenues instead stopped at 10,5 billion (-11,2% or -6,5% in terms of organic change), Ebitda at 4,3 billion (-7,6%) with an impact on revenues of 41,2%, an improvement of 1,7 percentage points (39,5% in the first half of 2013) and with a reduction in organic terms of 242 million million (-5,3%).
At the end of June, adjusted net financial debt amounted to 27,3 billion (-1,4 billion since 30 June 2013). The figure is up by 551 million compared to 31 December 2013 (26,8 billion). The BoD also reaffirmed the strategic value of Brazil, resolving to continue the study of strategic options.
More in detail, starting from 2014, the Domestic Business Unit includes, in addition to Core Domestic and International Wholesale, also the Olivetti group. This different representation reflects the commercial and business positioning of the Olivetti group and the process of integrating its products and services with those offered by Telecom Italia in the domestic market. The data for the corresponding period of the previous year have therefore been reclassified accordingly.
Domestic revenues amounted to 7,5 billion euros (8,2 billion in the first half of 2013), down 8,2% in both reported and organic terms. 'In an economic scenario which – albeit slightly improving – continues to show structural weakness and in a market context which still feels the effects of the drop in prices, deriving from the fierce competition which characterized the previous year (in particular on the Mobile in the first part of the year), the performance in the first half of 2014, in terms of change compared to the first half of 2013, shows a reduction of 8,2% (-676 million euros), with a performance in the second quarter of -8,2%, almost stable compared to what was observed in the first quarter of 2014 (-8,3%) and recovering compared to the whole of 2013 (-9,5%)', explains the note.
The aforesaid reduction in revenues is particularly attributable to the contraction of traditional services (voice, messaging, circuit data transmission), only marginally recovered by the development of innovative services, in particular on Fixed Broadband, ICT and Mobile Internet. The Ebitda of the Domestic Business Unit in the first half of 2014 amounted to 3,5 billion and recorded a reduction of 299 million compared to the corresponding period of 2013 (-7,9%, of which -2,4 percentage points attributable to the different classification of subsidy costs to customers for the purchase of handsets), with an incidence on revenues of 46,5%, with a slight recovery compared to 2013 (+0,2 percentage points).
The result was mainly affected by the contraction in revenues from services (-688 million euros compared to 2013), only partially recovered thanks to the efficiency measures obtained through selective control and containment of operating costs. We also note the almost complete release of the provision for risks, set aside in 2009 for the alleged administrative offense connected with the so-called Telecom Italia Sparkle affair (71 million euros). Also in the second quarter of 2014, the recovery trend of the operating performance of Ebitda, already observed starting from the second half of 2013, was confirmed, with a decrease of -7,5%, compared to -8,2% recorded in the first quarter of 2014 (excluding the aforementioned different classification of subsidy costs, the decline would have been -4,2% and -6,6% respectively).
In Brazil, the revenues of the TIM Brasil group in the first half of 2014 amounted to 9.477 million reais, down 1,8% compared to the same period of 2013 (-178 million reais). Ebitda amounted to 2.645 million reais, 193 million reais higher than in the same period of 2013 (+7,9%). The increase in Ebitda is essentially supported by lower costs for the purchase of materials and services partially offset by higher personnel costs and other operating costs.
The Ebitda margin was 27,9%, 2,5 percentage points higher than in the first half of 2013. Ebit was 1.161 million reais, an improvement of 40 million reais compared to the first half of 2013. This the result is attributable to the greater contribution of Ebitda, partially offset by the increase in depreciation and amortization of 155 million reais (1.485 million reais in the first half of 2014 compared to 1.330 million reais in the first half of 2013).
