Monster of the net loss for Telecom Italia, which accumulates difficulties
Milan – The operator Telecom Italia (Tim), already weakened by the tensions between its shareholders Vivendi and Elliott, sees the difficulties accumulate: it suffered in the third quarter of a huge loss due to asset write-downs and has not failed to confirm its goal for 2018.
The net loss for the third quarter was approximately € 1.4 billion, compared to a profit of € 437 million in the prior year.
In the first nine months of the year, it reached 868 million euros (770 million on a like-for-like basis), compared to a profit of 1.03 billion euros compared to the same period of 2017.
The write-downs carried out amounted to around 2 billion euros.
They are due "to the deterioration of the framework and regulation of competition and the highest interest rates," Tim said in a statement, adding that they do not alter the strategic priorities of the three-year plan.
In this context, however, the group did not confirm the target for 2018 of a ratio between adjusted net debt and EBITDA of around 2.7 at the end of 2018, established before the acquisition of 5G frequencies.
The group explained this decision with "many factors, including the fine related to the Golden Power process (imposed by the government due to the failure of Tim's obligations in terms of information, ed), consolidation in an unfavorable competitive environment, related tensions to the regulation on the internal market, plus the low exchange rate of the Brazilian real ".
In Italy, Tim also had to deal with the arrival of the French mobile operator Iliad, who broke prices, as he had already done in France since June.
Its accounts will be sealed in the coming months with a check for 2.4 billion euros that will pay for the 5G frequencies, much more than initially expected.
These frequencies were allotted in the peninsula at the end of September – at the beginning of October at the end of auctions that have reached insane amounts.
– "Disastrous management" –
Among other financial data published Thursday evening, Tim's quarterly revenue fell 4.9% to € 4.66 billion (-4.1% on a comparable basis, to € 4.7 billion).
The group also recorded a net debt of 25.2 billion euros, down by more than 1 billion euros in a year.
"Despite a complex and difficult macroeconomic and market scenario, the first nine months of the year show a solid evolution in operations," however, ensure the Italian operator.
But these statements do not mask the difficulties that concern Tim, both from the point of view of his results and from his government.
Vivendi is the main shareholder of the company with 24% of its capital, but lost its control on 4 May of the Telecom Italia Board of Directors (CA) for the benefit of the American activist fund Elliott.
Elliott's "independent" list now has ten posts on the fifteen, and Vivendi five, and the tensions between the two shareholders and their representatives are recurring.
"The new governance is failing", he stepped on Vivendi at the beginning of September, saying "deeply concerned about Elliott's disastrous management of Telecom Italia".
"The spread of rumors (including those recurring reviews by Tim's general manager, Amos Genish) causes malfunctions that are detrimental to Tim's smooth functioning and results," added Vincent Bolloré's group, lamenting the strong fall of the Tim title in bag from May.
Elliott was surprised by these observations, pointing out that Vivendi had never considered it necessary to change management, while the current CEO had been appointed by the previous board of directors in which the majority was.
Last May, the French group indicated that it could request the convening of a new general meeting to redevelop Telecom Italia's turnover again. An assumption that the Italian press has recently resumed.
CCO / FJB
(© AFP / 08 November 2018 23h03) <! –
(AFP / 09.11.2018 00:05)