2023-08-02 19:16:43
The losses of Telecom Italia (TIM) widen. The Italian operator, of which Vivendi is the main shareholder, published a somewhat reassuring half-yearly health report on Wednesday evening. The net loss over six months amounted to 813 million euros, against 483 million a year earlier. This loss is higher than that expected by the consensus of analysts compiled by Factset, which expected a negative result of 389 million euros for the semester, according to AFP.
The former state monopoly has been trying for a long time to redress the bar of its finances in the face of a very competitive Italian market. In 2021, the first half had already ended with a loss of 149 million. However, a slight improvement is emerging in the figures for the second quarter of 2023. Gross operating surplus increased by 5.6% to 1.6 billion euros over one year, seeming to reflect the first effects of the new group strategy. CEO Pietro Labriola has prioritized price increases and value-added services in its key markets.
The operator is indeed doing rather better commercially. Sales increased by 2.8% to almost 4 billion euros and even in the domestic market, turnover increased to 2.9 billion. Over the half-year, the good performance of its Brazilian subsidiary also boosted turnover by 3.8% to 7.85 billion euros.
Negotiation with KKR
Pietro Labriola continues in parallel the sale of assets to deflate an abyssal debt, which has become an even heavier ball to drag with the rise in borrowing rates. In June, the board of directors of TIM examined two offers to buy its fixed network, that of the Italian Caisse des dépôts and the American investment fund KKR. These offers offered more than 18 billion euros, far from the 31 billion expected by Vivendi. The discussions ended up leading to exclusive negotiations with KKR, which would now be ready to pay out more than 23 billion euros.
Behind Vivendi, which holds a 23.75% share, the Italian State is Telecom Italia’s second largest shareholder, through the 9.81% stake held by CDP. The right-wing and far-right government coalition led by Giorgia Meloni has repeatedly raised the idea of taking over public ownership of the company, but this has not materialized.
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