Telecom Italia's Q1 Profit Up 5.4% Despite Rising Debt
MILAN (Reuters) -Telecom Italia posted on Wednesday a 5.4% rise in first-quarter core earnings, slightly below expectations, as debt edged higher and cash flow was negative.
Earnings before interest, taxes, depreciation and amortisation after lease costs at Italy's biggest telecoms group rose to 815 million euros ($926 million), against analysts' consensus forecast of 821 million euros in a company poll.
Debt after lease costs was 7.5 billion euros at the end of March, up from 7.3 billion euros at Dec. 31, while equity free cash flow was a negative 198 million euros, weighed down by some deferred payments from the previous quarter and in line with analyst expectations.
The company posted a 124-million-euro net loss in the period, down from a 400-million-euro loss in the same period last year, and confirmed financial targets provided in February, including the return to cash generation this year.
Group revenue rose 2.7% year-on-year to 3.3 billion euros, in line with expectations, boosted by sales in TIM's domestic enterprise arm and its Brazilian-listed business
TIM, the heir to Italy's phone monopoly, is set to return to state-backed hands with financial conglomerate Poste Italiane replacing France's Vivendi as its single largest investor with a 24.8% stake.
Having sold its prized landline network last year, in a move aimed at slashing debt, TIM is expected to play a role in the long-awaited consolidation of Italy's telecoms sector, which has been under pressure for years amid stiff price competition.
($1 = 0.8799 euros)
(Reporting by Elvira Pollina, Editing by Gianluca Semeraro and Mark Potter)
