Telecom Italia (TIM) posted a 2.5 percent year-on-year fall in organic revenues to EUR 4.8 billion in the fourth quarter, with continuing recovery at its TIM Brasil unit offset by a drop of EUR 168 million (-4.2% year on year) at its domestic unit. TIM’s EBITDA for the quarter amounted to EUR 2.0 billion, down 3.4 percent compared to Q4 2017 on an organic basis, with a domestic fall of 13.2 percent offset by a strong performance in Brazil.
Full-year group revenues were up 0.5 percent year on year to EUR 19.3 billion on an organic basis, with 12-month EBITDA falling 3.4 percent to EUR 8.1 billion, while group capex was down 14.9 percent to EUR 4.2 billion. The company’s net consolidated loss for 2018 amounted to EUR 1.4 billion, compared to a EUR 1.2 billion profit in 2017, in view of a EUR 2.6 billion writedown on the goodwill of its core domestic business and international units.
In its domestic market, Telecom Italia released quarterly figures showing revenues down EUR 168 million, or 4.2 percent, compared to the fourth quarter of the 2017. On an annual basis, revenues were down 1.1 percent year-on-year to EUR 15.0 billion. The company said a 3.1 percent annual decline in its mobile segment to EUR 4.5 billion – attributed to a changed regulatory and competitive scenario, with a downturn in calling and broadband ARPU – was partly offset by a resilient fixed-line segment, where revenues remained stable at around EUR 9.9 billion due to higher retail ARPU.
TIM said it added over 1 million fibre customers over the year to reach 3.2 million at the end of 2018 (5.4 million including wholesale lines), helping to offset a decline in traditional voice services (-EUR 334 million). Fibre coverage increased to 80 percent of the Italian population, with the company committing to expand the coverage further in synergy with 5G deployment.
TIM took advantage of the publication of its annual results to release its first three-year business plan under new CEO Luigi Gubitosi, pledging to accelerate cost cutting, increase shareholder returns and grow core profits from next year. The plan, dubbed “TIMe to deliver and delever”, includes a number of initiatives designed to grow EBITDA at a “low single digit rate” in 2020 and 2021, although earnings are expected to decrease by a low single digit this year.
Initiatives to unlock value at TIM include a network sharing partnership with Vodafone and the relaunch of international services arm Sparkle under a new leadership. The company also confirmed that it has begun negotiations with wholesale-only operator Open Fiber and that it’s exploring “all possible options including a full business combination on fixed network”. TIM added that it has received a new non-binding offer for media unit Persidera and started exclusive negotiations.
