2Q sales down 6.5% at Telecom Italia

6 Aug 2014

Telecom Italia has reported a 6.5% fall in organic sales for the first six months of 2014 to EUR10.55 billion (USD14.14 billion), with the decline attributed to the weak economic situation in its domestic market and in Brazil, as well as a reduction in average revenue per user (ARPU) in the Italian mobile sector, due to increasing competition. Core domestic revenues dropped 8.8% to EUR7.01 billion, while sales at the Brazilian unit TIM Brasil were down 1.8% from a year earlier. EBITDA fell back 7.6% to EUR4.35 billion, though net profit stood at EUR543 million, reversing a year-ago loss of EUR1.41 billion which had been caused by a EUR2.19 billion impairment loss on goodwill in the first half of 2013; without the write down, net profit in H1 2013 would have reached EUR800 million. CAPEX in H1 2014 was EUR1.71 billion, down EUR255 million from a year earlier.

In operational terms, the total number of cellular subscriptions in Brazil rose 1% year-on-year to reach 74.17 million at 30 June 2014, though monthly ARPU continued to fall, dropping 4.5% y-o-y in the second quarter to BRL17.30 (USD7.63). In Italy, meanwhile, the number of mobile connections was down 3.3% at 30.66 million and broadband lines fell by 0.4% to 8.76 million. Mobile ARPU stood at EUR11.90 per month in the second quarter, down 10.6% on Q2 2013.

Brazil, Italy, Telecom Italia (TIM), TIM Participacoes (TIM Brasil)