Telecom Italia announced its results for 2011, which saw a goodwill write-down related to its domestic business pushing it to a net loss.
However, Franco Bernabe (pictured), chairman and CEO of the company, noted that this has “no financial consequences and no impact on the group’s debt reduction plans,” and the company also intends to follow its previously-announced dividend policy.
Telecom Italia recorded a charge of EUR7.3 billion during the year resulting from the earlier Olivetti/Telecom Italia deals and the purchase of TIM minorities, coupled with deterioration of the macroeconomic outlook and financial markets condition.
Bernabe noted: “2011 was a tough year for the global economy and even more so for Italy which was hit by the sovereign debt crisis. The increase cost of capital caused by higher interest rates led to a reduction of the domestic goodwill value.”
For 2011, on a group level the company reported a net loss of EUR4.73 billion, compared with a 2010 profit of EUR3.12 billion, on revenue of EUR29.96 billion, up 8.7 percent.
The company reported EBITDA – before its impairment charge and depreciation and amortisation – of EUR12.25 billion, up 7.3 percent year-on-year from EUR11.4 billion.
In its domestic unit, mobile revenue was EUR4.97 billion, down 5.7 percent year-on-year. The company did not break-out mobile revenue for its international operations.
The year also saw Telecom Italia investing EUR1.22 billion in LTE frequencies in Italy, which were formally awarded in October 2011.