After TIM Brazil reported growth in both profit and revenue, its owner Telecom Italia saw its full-year profit before some items climb 7.3%, helped by growth in Latin America. Consolidated revenue for 2011 totaled US $40.32 billion (29,958 million euros), which is up 8.7% compared with 2010. In terms of organic variation, consolidated revenues grew by 2.7%.
According to the Telecom Italia board of directors, chaired by Franco Bernabè, “2011 was marked by the slowing of the faster growing economies and fears of recession in the more mature ones. Notwithstanding the macroeconomic difficulties, the company managed to reach all its consolidated 2011 goals in terms of stabilising revenues, profits and operating free cash flow generation. EBITDA and consolidated revenues both grew, above all thanks to stronger results from Argentina and Brazil.”
Bernabè has also pointed out that in “Italy, the company’s continued efforts towards efficiency allowed for an improvement in the results quarter over quarter, generating the free cash flow necessary to reduce the indebtedness by US $1.41 billion (1.054 billion euros) notwithstanding the US $1.61 billion (1.2 billion euros) investment for the acquisition of the LTE frequencies.”
The EBITDA was US $16.47 billion (12.24 billion euros), up 7.3% year-over-year, with an EBITDA margin of 40.9% of revenues (41.4% in FY 2010). However, the consolidated organic EBITDA margin fell 1.1 percentage points in FY 2011 to 41.2% (42.3% in FY 2010).
Telecom Italia’s board has also proposed to cut its dividend to US $1.2 billion (900 million euros) for 2011 down 25% from the year before. According to Bernabè this will “set the floor” for future years.
