MILAN (Reuters) - Telecom Italia (TIM) (TLIT.MI) on Wednesday reported a bigger-than-expected drop in first-quarter earnings, hit by provisions made for fines Italy imposed on the phone group as part of the so-called golden power decree which the group is appealing.
In the first set of results after activist fund Elliott wrestled board control from top shareholder Vivendi (VIV.PA), TIM said comparable earnings before interest, tax, depreciation and amortisation (EBITDA) fell 4.9 percent to 1.89 billion euros (£1.65 billion).
This compares with a consensus of analysts’ forecasts provided by the company of 1.96 billion euros.
Italy’s biggest phone group said comparable sales fell 1.6 percent to 4.74 billion euros, compared with expectations of 4.69 billion euros, hit by falling revenue in its only foreign market Brazil. Domestic sales rose 1.7 percent.
Commenting on the outlook, TIM referred to targets set out in its 2018-2020 industrial plan unveiled in March.
Adjusted net debt stood at 25.54 billion euros by the end of March, in line with expectations.
In a separate statement, TIM said Vivendi was no longer a party exercising control and coordination over the company.
The French group’s control and coordination started after Vivendi appointed two-thirds of the phone group’s board last year and named its own CEO as TIM’s executive chairman. Vivendi lost control of the board after a shareholder vote on May 4.
Reporting by Agnieszka Flak