Telecom Italia SpA’s earnings rose in the second quarter, suggesting the company’s strategy of increasing prices and focusing on profitable services in its domestic market is paying off.
(Bloomberg) — Telecom Italia SpA’s earnings rose in the second quarter, suggesting the company’s strategy of increasing prices and focusing on profitable services in its domestic market is paying off.
Organic earnings before interest, taxes, depreciation and amortization increased 5.6% to €1.64 billion ($1.8 billion) in the second quarter compared with the same period a year earlier, Telecom Italia said in a statement on Wednesday. That compares with analysts’ average estimate of €1.6 billion, according to data compiled by Bloomberg.
The company posted a net loss of €124 million. Telecom Italia shares fell as much as 3.7% in Milan on Thursday, trimming the company’s market value to about €5.4 billion.
Sales rose 2.8% from a year earlier on an organic basis to €3.99 billion. Revenue in the company’s highly-competitive Italian market increased for the first time in five years, rising 0.6% to €2.92 billion.
Read More: Apple Acquisition Pitch Was High-Water Mark for Telecom Italia
Chief Executive Officer Pietro Labriola is working to accelerate the company’s core business and has committed to a wider turnaround plan to give up control of Telecom Italia’s most valuable asset, its landline network, in the first such divestiture for a European phone carrier.
The plan is aimed at slashing the company’s €30 billion gross debt pile, an effort that has become more urgent amid rising of interest rates last year. Telecom Italia began in June exclusive talks with US private equity firm KKR & Co. over the sale of its grid, in a deal valued as much as €23 billion, people familiar with the matter told Bloomberg.
The network sale project is on track and the company is working to secure a final binding offer from KKR by Sept. 30, it said.
(Updates with shares in third paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.