Net loss monster for Telecom Italia, which has difficulties
Milan – The operator of Telecom Italia (Tim), already weakened by tensions between shareholders Vivendi and Elliott, sees difficulties in accumulating: suffered a third-quarter loss of a monster due to asset devaluation and has not been able to confirm its target for 2018.
Its net loss in the third quarter amounted to 1.4 billion euros, compared with 437 million euros last year.
In the first nine months of the year, it reached 868 million euros (770 million euros per share) against a profit of 1.03 billion euros in the same period of 2017.
Devaluations amounted to around EUR 2 billion.
It is about "worsening the competitive framework and regulations and raising interest rates," Tim said in a statement, adding that they did not change the strategic priorities of the three-year plan.
In this context, however, the group did not confirm its target for 2018 of the adjusted net debt and EBITDA ratio to about 2.7 at the end of 2018, which was created prior to the acquisition of the 5G frequencies.
The team explained this decision with "many factors, including the gold-related fine (imposed by the government due to Tim's failure to meet Tim's information obligations, Ed), unification of the unfavorable competitive environment, tensions related to the regulation of the domestic market, as well as the low exchange rate of real Brazil. "
In Italy, Tim also had to face the arrival of the French mobile phone company Iliad, which has broken prices since June, as it had done in France.
His accounts will also be sealed in the coming months with a check of 2.4 billion euros that will pay for 5G frequencies, much more than initially planned.
These frequencies were awarded to the peninsula in late September – early October at the end of the auctions that have gone madly.
– "Destructive Management" –
Among other financial figures released on Thursday night, Tim's quarterly revenue fell 4.9% to 4.66 billion euros (-4.1% on a comparable basis, to 4.7 billion euros).
The group also recorded a net debt of € 25.2 billion, or more than one billion euros for one year.
"Despite the complex and difficult macroeconomic framework and market context, the first nine months of the year show a steady development in business management," the Italian operator assured.
But these statements do not conceal the difficulties that affect Tim, both in terms of its results and its governance.
Vivendi is the main shareholder of the operator with 24% of its capital, but lost control of Telecom Italia's board of directors on May 4 for the benefit of the American fund of activists Elliott.
Elliott's "independent" list now has ten seats out of fifteen, and Vivendi five, and the tensions between the two shareholders and their dealers are recurring.
"The new governance fails," Vivendi said in early September, saying "deeply worried about the disastrous management of Telecom Italia" by Elliott.
"The spread of rumors (including the repeated dismissal of Tim's general manager, Amos Genish) causes malfunctions that are detrimental to Tim's smooth operation and results," added Vincent Bolloré's team, lamenting the sharp drop of Tim's stock on the stock market by in May.
Elliott surprised these remarks, noting that Vivendi had never realized that it was necessary to change the administration, while the current director was appointed by the previous board of directors in which the majority was.
Last May, the French team said they could call for a new general assembly to re-iterate Telecom Italia's turnover. An assumption that the Italian press has just reiterated.
CCO / FJB
(© AFP / 08 November 2018 23h03) <! –
(AFP / 09.11.2018 00:05)