Telecom Italia 2Q Earnings Fell, Delays Decision on Secondary Network
05 August 2020 - 9:06AM
Dow Jones News
By Mauro Orru
Telecom Italia SpA said late Tuesday that earnings fell in the
second quarter and it would hold off on a decision over selling a
stake in its secondary grid until later this month.
The Italian telecommunications company reported net profit for
the quarter of 118 million euros ($139.3 million) compared with a
EUR386 million profit in the second quarter of 2019.
Earnings before interest and taxes dropped to EUR509 million
from EUR1.20 billion, while revenue fell to EUR3.8 billion from
EUR4.52 billion.
Telecom Italia said service revenues were hurt by the effects of
the coronavirus crisis, as well as the rationalization of its
product portfolio.
"Financial results were affected by the effects of the closure
of stores on product sales and the reduced roaming traffic to and
from abroad," it said.
Despite the short-term decline, it said it expects a positive
effect in the medium to long term due to the faster adoption of
digital services.
Telecom Italia's board of directors will reconvene on Aug. 31 to
decide on the sale of a stake in its secondary grid to investment
firm KKR & Co. The terms of a deal may change following
discussions with the Italian government.
KKR submitted a nonbinding offer earlier this year to be Telecom
Italia's exclusive partner in fiber-network development, as the
company continues to assess possible forms of integration between
its own and wholesale operator Open Fiber's optical-fiber
networks.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
August 05, 2020 02:51 ET (06:51 GMT)
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