Telecom Italia closed the first half of 2011 with a negative net result of 2,013 billion euros, down by 3,224 billion compared to the same period last year (1,211 billion). But the company let it be known that, excluding the negative impact of the goodwill write-down, the profit would amount to 1,169 billion. A figure that is "substantially in line" with that of the first half of 2010. The best news comes from the revenues front, at 14,543 billion (realised for 34% in Brazil and Argentina), up 10% on an annual basis.
“Write-downs of non-current assets – explains Telecom – amount to 3,182 billion following the write-down of the goodwill attributed to domestic activities. The assessment, in compliance with the specific procedure the group has adopted, mainly took into consideration the deterioration of the context of the financial markets with regard to the trend in interest rates”.
Ebitda for the January-June period is 5,977 billion, up by 4,3% and with an incidence on revenues of 41,1% (it was 43,4% in the same period of 2010). Ebit is negative by 51 million, for a reduction of 2,932 billion. Organic Ebit is 3,174 billion, an increase of 4%. Cash flow from operating activities amounted to 2,512 billion and increased by 360 million compared to the first half of 2010, "thanks to the positive contribution of the domestic markets and Brazil as well as the entry into the scope of consolidation of the Argentina business unit".
Net financial debt as at 30 June was 31,119 billion, down by 349 million compared to 31 December last year. The improvement in the generation of operating cash, together with the collection of 386 million for the sale of the investment in Etecsa, "has amply ensured coverage of the disbursement relating to the payment of dividends (1,325 billion, of which 1,183 billion distributed by the parent company) and of the share purchases which in the first half allowed the increase of Telecom's economic interest in the Argentina business unit from 16,2% to 21,1%”.
“The repositioning towards markets with better growth prospects allows the group to close the six-month period with revenues of 14,5 billion euros – commented the president of Telecom Italia, Franco Bernabè – of which 34% from Brazil and Argentina. Furthermore, the domestic revenue trend is improving thanks, in particular, to the stabilization of prices in the mobile sector and the defense of the value of the customer base in the fixed sector".
“In an increasingly complex macroeconomic and financial scenario – he added – the group reported solid cash generation thanks also to the improvement in efficiency especially on the domestic market. The results for the period once again confirm the validity of the strategy of continuous strengthening in Latin America, also crowned by the successful migration of Tim Participacoees to the Novo Mercado. The group's revenues grow by 10% driven by the international performance and the recovery of competitiveness and enhancement of the domestic business".
As for the group's performance in 2011, the company underlines that "the objectives linked to the main economic indicators, as defined in the 2011-2013 business plan, envisage revenues and organic Ebitda for the whole year substantially stable compared to 2010 (considering the business Argentina unit consolidated for 12 months)". Industrial investments will be approximately 4,8 billion, excluding the impact deriving from participation in the tender for the use of mobile frequencies on the domestic market.
Net financial debt will be approximately 29,5 billion at the end of the year. The one updated at June 30, 2011 totals 31,1 billion euros, an improvement compared to the 31,4 updated at December 31, 2010. The board of directors also approved the plan for the merger by incorporation of Telecom Italia Audit and Compliance Services. A merger that "responds to a logic of revision of the control governance structures of the group, concentrating activities and expertise in the field of internal controls in the parent company", and will take place after the acquisition of all the shares in the company to be merged, "currently held in the measurement of 18,18% by Telecom Italia Media”. The deal should be completed within the year.
