Telecom Italia to discover choices for property after recent steering minimize By Reuters
© Reuters. FILE PHOTO: The Telecom Italia logo can be seen in its offices in the Rozzano district of Milan, Italy on May 25, 2016. REUTERS / Stefano Rellandini
By Elvira Pollina and Agnieszka Flak
MILAN (Reuters) -Telecom Italia (TIM) will advance plans to attract new investors and increase the value of its assets, the CEO said Thursday after the group further lowered its core earnings forecast for 2021 due to deteriorating conditions in its home market .
The renewed downward revision announced late Wednesday follows a cut in July and increases investor pressure on Luigi Gubitosi, CEO of Italy’s largest telecommunications company, who won a second term in February.
A source close to TIM’s top investor Vivendi (OTC :), who backed Gubitosi’s re-appointment in February, said late Wednesday that the French media company is sticking to TIM despite the group’s disappointing results.
TIM shares closed by 5.7% on Thursday at EUR 0.3175, after previously hitting a low of EUR 0.31, a level that was last reached in early November 2020. Chip index.
Indebted TIM is battling aggressive price competition in its main home market, with revenue and margins shrinking as the group faces the cost of upgrading its network and redesigning its business.
Analysts at Banca Akros said in a note that although not entirely unexpected, the cut forecast “signals a difficult scenario and will trigger further downgrades in estimates”.
TIM said its board of directors on Wednesday discussed a possible reorganization of the group’s operations to get more value from the group’s assets and asked CEO Gubitosi to continue exploring options.
“What I got yesterday was encouragement to continue exploration and then report on the opportunities we have,” Gubitosi told analysts on a conference call on Thursday.
TIM had previously planned to address some of the domestic challenges by developing rapidly growing neighboring business units such as cloud, cybersecurity and Internet of Things companies.
A sale of a minority stake in its Noovle cloud unit could be carried out in the second half of next year, Gubitosi said, adding that an upcoming business plan will be “stricter” on costs.
Other parts of TIM’s business could be spun off to allow new partners to join, following similar deals the group has secured for its mobile and landline assets.
“We are very keen to add value to our portfolio,” said Gubitosi.
($ 1 = 0.8624 euros)
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