Telecom Italia SpA has posted better than expected third quarter results, mainly due to the strong performance of its mobile unit, Telecom Italia Mobile SpA. It also tried to reassure investors by promising an early dividend, as revenues fell 6.4%.
For the third quarter to September 30, the Italian telecoms giant reported a net profit of 476m euros ($481m), up from a net loss of 811m euros ($819m) in the same period last year, on revenues of 7.45bn euros ($7.53bn), slightly down from the previous figures of 7.51bn ($7.59bn). For the nine month period, it reported net profits of 1.25bn euros ($1.26bn) on revenues of 22.44bn euros ($22.68bn).
There is a clear contrast between Telecom Italia and European rivals such as France Telecom and Deutsche Telekom. The French and German incumbents are struggling with debts in excess of 60bn euros ($60.5bn), whereas Telecom Italia has a relatively modest debt level of 17.6bn euros ($17.7bn). This figure is already below its year-end target of 18bn euros ($18.1bn), achieved mainly via tight cash control and asset sales in Spain, France, Austria and Italy.
Europe’s third largest telecom operator by market value, Telecom Italia confirmed it would distribute 1bn euros ($1.01bn) in dividends payable by December 19, as an advance on its full year dividend to be distributed in May 2003. Its mobile unit also promised to pay a 1.6bn euro ($1.61bn) dividend from its own profit by the same date.