Telecom Italia misses 2020 core profit target, reinstates dividend
MILAN, March 10 (Reuters) - Italy's biggest phone group Telecom Italia (TIM) said on Tuesday it was postponing its target to return to core profit growth this year after anticipating lower service revenues dogged by underperforming domestic business.
Setting out its plan for 2020-2022, the group said it would press ahead with a strategy aimed at cutting its cost base while upgrading its fixed and mobile network.
The group, which has not paid a dividend on its ordinary shares since 2013 -- on 2012 results -- said it would pay a dividend of 0.01 euros on 2019 results.
In a statement Telecom Italia said total revenues last year fell 2.6% to 18 billion euros, in line with a company-provided consensus of 17.998 billion euros. It said domestic sales fell 6.3% to 14.081 billion euros.
TIM, whose investors count French media company Vivendi and investment firm Elliott, said organic earnings before interest, tax, depreciation and amortisation (EBITDA) after leases fell 2.2% to 7.2 billion euros in the 12 months ending December.
That was in line with an analyst consensus provided by the company.
The former phone monopoly carrier, which had previously aimed for a return to low single digit growth in core profits excluding leases starting this year, now sees it falling by 'low single digit in 2020' before going back to growth next year.
It also set a more ambitious target for reducing its addressable cost base by 10% compared with a 8% decrease included in its previous plan.
The group, which sees significant growth in cash generation over the three year plan, said it saw net debt after lease falling to below 20 billion euros in 2021 compared to a previous target of 20.5 billion euros.
The debt target does not include proceeds from a planned sale of 12.4% of tower group INWIT, which is worth around 1 billion euros.
TIM also said it has granted KKR Infrastructure a period of exclusivity as financial partner to develop its fiber business in Italy.
The U.S. infrastructure fund has presented a non binding offer to take 40% of the group's last mile network ahead of a possible tie-up with the all-fiber network of smaller rival Open Fiber, TIM said. (Reporting by Elvira Pollina; Editing by Stephen Jewkes, William Maclean)
