Telecom Italia issues third profit warning in a year -Breaking
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MILAN (Reuters). Telecom Italia (TIM) is facing a takeover offer from U.S. funds KKR. This was due to lower than expected fixed line revenues from DAZN’s partnership to show Italian soccer.
TIM released its third profit warning of the year on Wednesday.
It forecasted a decrease of “highly single-digit” in October.
TIM shares fell 1.5% during early Thursday trading
TIM signed a 1 Billion Euro deal earlier in the year with DAZN, a streaming sports service that aims to improve its broadband and pay TV services.
TIM now wants to reduce the costs of its deal with DAZN, after Italy’s highest-flight soccer league matches produced less than anticipated.
Any other non-recurring provisions will be decided in the light of ongoing negotiations of DAZN and booked in 2021.
TIM is Europe’s 6th largest telecoms company. It said that group EBITDA-AL will be greater than 5.4 billion Euros in 2021 due to the growth of its Brazil business unit. This was confirmed at a rate “mid-single-digit”.
EBITDA-AL was 6.3 Billion Euros in 2020 according to TIM’s annual report. The group had previously noted a “mid-single digit” drop this year.
Following a payment of 435m euros for licenses, the adjusted consolidated net debt of the company will be approximately 17.6 billion Euros.
Friday’s meeting of TIM’s Board will discuss the response to U.S. Fund KKR’s proposal to take over TIM for 33 billion euros.
Four sources told Reuters that TIM’s biggest investor Vivendi(OTC:), is contemplating a board reshuffle to get rid of Luigi Gubitosi the former CEO, whom it believes was responsible for TIM’s failures.
Gubitosi resigned as chief executive of TIM last month. However, he didn’t resign as a director on the board, which prevented his successor Pietro Labriola, who is required to be on the board, from being named CEO.
Telecom Italia (MI:) (TIM) https://tmsnrt.rs/3m5VDEE
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