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Telecom Italia’s quarterly core profit rises as domestic revenues edge up

Telecom Italia on Wednesday reported a 5.5% rise in its second-quarter core profit, helped by strong performance from its Brazilian unit as sales at the company’s ailing domestic business also edged higher.

Italy’s biggest telecoms company said core earnings before interest, tax, depreciation and amortisation after lease costs (EBITDA-AL) on a like-for-like basis stood at 1.4 billion euros ($1.53 billion) in the three months ending June. which was above a company-provided analyst consensus of 1.3 billion euros.

Domestic revenue, which contributes the bulk of the group’s total sales, rose for the first time after five years by 0.6% to 2.9 billion euros, the company said.

TIM’s net financial debt rose to 26.1 billion euros ($28.57 billion) as of June 30 from 24.6 billion euros in the same period last year.

The company confirmed its financial targets for 2023, including a stabilisation of service revenue and core earnings at the domestic level.

Championed by TIM CEO Pietro Labriola, the plan has won support from some leading officials within Prime Minister Giorgia Meloni’s administration, sources familiar with the matter have said.

The government has special vetting powers on any deal involving TIM’s grid and wants to join KKR’s bid to keep a strategic oversight on Italy’s main telecommunications infrastructure.

The grid sale has faced heavy reservations from TIM’s top investor, Vivendi (VIV.PA), which is demanding a higher valuation to back a deal. With its 24% voting stake, the French media giant may throw a spanner in the works at any TIM shareholder meeting to vote on a deal. Reuters

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