Reality check

8 March 2006

Still, the miss in the Italian group’s profit target is bad news, especially since it denied rumours of a profit warning two months ago. What’s more, loss of earnings power at TI may put pressure on the highly leveraged holding companies through which Pirelli controls it.

This content is for Subscribers only

Context News

Telecom Italia reported organic revenue growth of 3.8% in 2005. The Italian telecoms group's organic ebitda had increased by 2.7% and organic operating profit was only marginally higher in 2005. TI announced a forecastbeating 28% increase in its dividend.

TI's 20052007 plan had targeted compound annual growth of 46% in organic revenues, 68% in ebitda and 79% in operating profits. The group in January denied rumours of a profit warning. TI has trimmed revenue growth targets for 20062008 to 34%.

Olimpia, the holding company through which Marco Tronchetti Provera controls Telecom Italia, has written down the value of its TI stake by E1bn. It now values each share at E4.23. The market value of TI shares is E2.38.

Email a friend

Please complete the form below.

Required fields *