Tech

Telecom Italia issues third profit warning of the year

FILE PHOTO: The Tim logo is seen at its headquarters
FILE PHOTO: The Tim logo is seen at its headquarters in Rome, Italy on November 22, 2021. REUTERS/Yara Nardi/File Photo

December 16, 2021

MILAN (Reuters) -Telecom Italia (TIM), facing a takeover approach from US fund KKR, has cut its 2021 earnings forecast for its domestic business due to revenue from the line fixed lower than expected from the partnership with DAZN to show Italian football.

In its third profit warning of the year, TIM said late Wednesday that it expects a “low youth drop” in 2021 organic earnings before interest, taxes, depreciation and amortization. after leasing (EBITDA-AL) for domestic enterprises.

In October, it forecast a high single-digit drop in business activity.

TIM stock fell 1.5% in early Thursday trading.

Earlier this year, TIM signed a €1 billion deal with sports streaming service DAZN to try to boost its pay TV and broadband services.

TIM is now looking to cut the cost of its deal with DAZN after the deal to distribute Italy’s top football league matches generated less revenue than expected.

Any non-repeating terms will be determined based on ongoing DAZN deal negotiations and will be booked in 2021, TIM said in a statement.

TIM, Europe’s sixth-largest telecommunications group, said it expected the group’s EBITDA-AL for 2021 to be 5.4 billion euros higher thanks to growth in its Brazil business unit, which is confirmed. at the “middle number” level.

EBITDA-AL is 6.3 billion euros in 2020, according to TIM’s annual report, and the group previously marked a “single-digit average” decline this year.

After paying €435 million for the license, the company’s adjusted consolidated net financial debt is expected to be around €17.6 billion.

TIM’s board of directors will meet on Friday to discuss how to respond to a proposed 33 billion euro takeover from the US fund KKR.

Four sources have told Reuters that top TIM investor Vivendi is considering pushing for a board reshuffle to oust former CEO Luigi Gubitosi, whom it says is responsible. on the underperformance of the TIM.

Gubitosi stepped down as chief executive officer of TIM last month, however he did not step down as director of the board, preventing his designated successor Pietro Labriola from becoming chief executive because he must join the board first.

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Telecom Italia (TIM) https://tmsnrt.rs/3m5VDEE

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(Reporting by Francesca Landini in Milan and Shivani Tanna, Vishal Vivek in Bengaluru, edited by Subhranshu Sahu and Mark Potter)

https://www.oann.com/telecom-italia-cuts-ebitda-forecast-on-lower-revenue-from-dazn-partnership/?utm_source=rss&utm_medium=rss&utm_campaign=telecom-italia-cuts-ebitda-forecast-on-lower-revenue-from-dazn-partnership Telecom Italia issues third profit warning of the year

Caroline Bleakley

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