Telecom Italia’s 2012 earnings and revenue trailed analyst estimates, thanks to its domestic economic situation as well as slowing growth in Brazil. The company also missed its net debt target.
Ebitda fell by 4.2 per cent to EUR11.7 billion while revenues declined 1.5 per cent to EUR29.5 billion. Both figures were below analyst expectations.
The company managed to reduce its adjusted net debt to about EUR28.3 billion at end-2012, although this was short of its own target to hit EUR27.5 billion.
A decision on the sale of its Telecom Italia Media TV unit has been postponed said the company. Asset disposal is a means for the company to cut its debt.
The company said it had made progress on cutting debt through strong cashflow. “The group continues to pursue debt reduction through robust cash generation, which will help fund the development of network infrastructure in Italy and abroad, which we believe is crucial,” said chairman Franco Bernabe.
Operating results were in line with the company’s targets, said Bernabe.
Domestic revenues fell 5.8 per cent to EUR17.9 billion. Within this overall figure, mobile revenues in Italy fell by seven per cent.
Internationally, the important Brazilian market, which is responsible for more than 25 per cent of the company’s total revenues, grew by their lowest rate in nearly two years, on a quarterly basis.
These are Telecom Italia’s preliminary results. The final figures will be published on 7 March. Analysts are waiting for new guidance from the company for 2013.
A update on Telecom Italia’s strategic plan for 2013-2015 will be made later today. Analysts will hope to hear more about plans for a possible network spin-off, a means to raise cash for possible debt reduction.