Telecom Italia (TIM) has reduced its forecast for 2021 organic earnings before interest, tax, depreciation and amortisation after leases (EBITDA-AL) due to lower than expected wireline revenue. Following two profit warnings that forced TIM’s CEO Luigi Gubitosi to step down last month, the operator said it now expected a “low teens decrease” in EBITDA-AL for the full year due in part to the underperformance of its partnership with sport streaming platform DAZN following their EUR 1 billion agreement to air Italy’s top-tier Serie A football matches over the next three seasons.
TIM revealed that it’s looking to renegotiate the deal with DAZN and that any non-recurring provision will be determined in light of the talks and will be recorded in 2021 FY financial statements. However, it added that the company still expects total group EBITDA-AL for 2021 to be higher than EUR 5.4 billion thanks to the "mid single-digit" growth of its Brazil business unit.
Group organic services revenues are confirmed to decrease by a "low single-digit", as previously communicated. Adjusted consolidated net financial debt AL is expected to be around EUR 17.6 billion after the payment of EUR 435 million in licences, including EUR 140 million following the award of 5G frequencies in Brazil.
Board meeting 17 December
Separately, Reuters reported that TIM’s leading investor Vivendi is considering pushing for a board reshuffle at the Italian operator in an attempt to oust Gubitosi, who remains a director. The board is due to meet on 17 December to discuss its response to KKR’s EUR 33 billion takeover offer and if Gubitosi does not resign, Vivendi may try to force a board revamp, according to two unnamed sources.
The current chief executive of the group's TIM Brasil unit, Pietro Labriola, was named TIM general manager at the end of last month following Gubitosi’s resignation but he cannot take over as CEO until Gubitosi or another director vacates a board seat.
