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Due to lower-than-expected fixed line revenue from its agreement with DAZN to screen Italian soccer, Telecom Italia (TIM), which is facing a buyout bid from US investor KKR, has lowered its 2021 earnings prediction for its domestic division.
TIM said late Wednesday it expects a “low teens reduction” in organic earnings before interest, tax, depreciation and amortization after leasing (EBITDA-AL) for the domestic business in 2021, its third profit warning in a year. It predicted a “high single-digit drop” for the business in October.
In early Thursday trading, TIM shares were down 1.5 percent. After the agreement to distribute Italy’s top flight soccer league matches generated less money than planned, TIM is now aiming to cut the cost of the partnership with DAZN.
Any non-recurring provision will be evaluated in light of the ongoing DAZN deal negotiations and booked in 2021, according to TIM.Due to growth in its Brazil business unit, which was reaffirmed at a “mid single-digit” pace, TIM, Europe’s sixth largest telecoms group, said it projected group EBITDA-AL to be greater than 5.4 billion euros in 2021.
According to TIM’s annual report, EBITDA-AL was 6.3 billion euros in 2020, and the company had earlier predicted a “mid-single digit” reduction this year.
The company’s adjusted consolidated net financial debt is expected to be around 17.6 billion euros after a 435 million euro payment for licenses.
Story by : Norvisi Mawunyegah