Telecom Italia Uncertain On Covid-19 Impact
Telecom Italia reported a mixed set of results in Q4 2019, as it swung back to profitability but experienced a sharp revenue decline, while adding it was difficult to determine the impact of Covid-19 (coronavirus) which has had a major impact on its home market.
In a statement, Telecom Italia said total revenue amounted to €4.6 billion(US$5.18billion), a 6.6 per cent year-on-year decline, with its mobile operations in Italy struggling in a “highly competitive” market.
The company did, however, return to profitability, at €64 million compared with a net loss of €543 million in Q4 2018 when it was impacted by an impairment bill relating to its wholesale business.
Brazil was a bright spot in terms of service revenue in the recent quarter, up 3.2 per cent due to commercial policies in its mobile divisions, which offset adverse macro-economic and market dynamics.
Telecom Italia added it made investments amounting to €1.5 billion in Q4 2019, €1.2 billion of which was in Italy.
In its statement, the company made a veiled reference to the Covid-19 epidemic, which has seen the entire country quarantined.
“The world is living an unprecedented period of extraordinary sanitary emergency. The impact on GDP worldwide and in Italy, hence on TIM’s plan, is difficult to quantify at the moment and will be a function of the duration, intensity and effectiveness of containment action.”
As well as its Q4 numbers, the company also laid out its plan up to 2022.
Telecom Italia forecast generating cash of €4.5 billion to €5 billion, well above the €3.5 billion in its previous plan. It is aiming to reduce its costs, while upgrading both its mobile and fixed networks, as well as reduce net debt to below €20 billion in 2021.