Telecom closed the first nine months of 2017 with a profit of 1,033 billion euros, a sharp decrease compared to 1,459 billion a year ago, which primarily discounts non-recurring charges of 233 million euros. Net of non-recurring items, and also excluding the positive impact of the valuation of the mandatory conversion bond option, the profit attributable to shareholders would be almost 100 million higher than a year ago.
I revenue for the nine months increased by 5,3% to 14,67 billion euro and Ebitda for the same period rose by 5,7% to 6,21 billion.
The data was greeted with a dizzying round of trading (over 100 million), a plunge of 7,9% with the title passed in the volatility auction and a subsequent recovery. At 10:58, the shares are trading up 2,07% to 0,7395. A few minutes later, new decreases to +0,6%.
Looking instead at the solo third quarter revenues they stood at 4,9 billion, up by 1,3%, and Ebitda at 2,099 billion, down by 2,5%. The consensus of analysts published on the telecommunications company's website estimated group revenues at 4,909 billion, with 3,81 billion from the Domestic business unit (which primarily includes fixed, mobile and wholesale Italy) and 1,1 billion from Brazil , and reported EBITDA of 2,2 billion for an EBITDA/revenue ratio of 44,9%. This ratio stands at 42,8% from 44,6% in the third quarter of 2016.
In the third quarter, after the clamorous departure of CEO Flavio Cattaneo which took place at the end of July, Telecom recorded a slowdown in the net result but it is also true that the group accelerated its investments: industrial investments in the first nine months of 2017 amounted to 3,881 billion, an increase of 774 million euros compared to the first nine months of 2016. The Capex invested in Italy is up by 779 million compared to the first nine months of 2016 and is attributable – Telecom Italia points out again – “to the innovative investments of infrastructural development (+386 million euros compared to the first nine months of 2016) and reflects, in particular, the acceleration in investments dedicated to the development of new generation networks and services”. However, the cost of renewing the right to use the GSM frequencies (630 million euro) must also be included in the figure.
La revenue growth in the first 9 months it is almost entirely attributable, explains the note released by the group, to the Domestic (Italy) and Brazil Business Units. In the third quarter, Telecom continued to recover customers in Italy, albeit at a slower pace than in previous quarters. In the fixed line, revenues are still "slightly decreasing to 7,4 billion (-0,6%)" but data connectivity is growing (+14,5%). In mobile, i amounted to 3,4 billion, an increase of 70 million compared to the same period of the previous year (+2,1%). A sustained trend, specifies the Telecom Italia note, “from the good competitive performance, which led to a recovery of market share and the growth of the customer base without impact on ARPU levels. Also in the third quarter of 2017, despite the aforementioned impact of the new roaming regulation in the EU, the growth trend was confirmed with a historical series of stably positive performances (+1,6% in the third quarter, +2,5% in the second quarter and +2,2% in the first quarter).
On these bases, management "confirms in organic terms the guidelines already envisaged for the entire year 2017 and for the period of the Plan (organic growth of EBITDA (low single digit) and cash generation necessary to reduce the ratio between financial debt adjusted net and reported Ebitda, which in 2018 is expected to be below 2,7x).
“We see Tim Brasil as a core asset and we will keep it strategic also in the future. A lot of value could be created in the coming years in Tim Brasil. We could have three fantastic years in the Brazilian economy”. She pointed it out the CEO of Telecom, Amos Genish, answering a question from an analyst during the quarterly presentation. “Inwit is not as strategic as Tim Brasil – he added regarding the subsidiary of the telephone signal transmission towers – It is important and satisfying. But the tower business is evolving and we are open to any opportunity as long as we maintain our strategic influence in the future”.
