Telecom Italia profit plummets as sales decline

Italy’s telecommunications operator Telecom Italia Friday reported a steep decline in its first-half net profit, hit by extraordinary provisions, as revenue in its key Italian and Brazilian markets continued a gradual decline.

Net profit fell to 29 million euros ($31.6 million) from EUR543 million in the same period a year earlier, after the company set aside EUR399 million in extraordinary provisions, mainly due to regulatory litigation. The provisions weighed on both profit and margins for the period, Telecom Italia said.

Revenue fell 4.3% to EUR10.1 billion, while earnings before interest, taxes, depreciation and amortization, or Ebitda, was EUR3.6 billion, down 16.4% from the same period a year earlier.

The company said the sales decline in its Italian market is becoming less steep as the customer base has been stabilizing, after the company boosted investments to upgrade its ultra-broadband network. Investments reached EUR2.1 billion in the first half of the year.

Revenue in Brazil fell 10.7% compared with the same period a year ago.

The firm’s closely-watched net debt stood at about EUR27 billion at the end of June, up EUR341 million from the end of 2014.

source:Market watch