Telecom Italia Scraps Dividend As Losses Continue
Published on: 7th Mar 2014
Note -- this news article is more than a year old.
Debt laden Telecom Italia is cancelling its shareholder dividend in an effort to converse cash as the company posted a another financial loss for the year.
The compost posted a net loss for last year of EUR674 million (US$934 million), taking the losses over the past three years to more than EUR7 billion. The company was particularly hurt by a EUR 2.2 billion impairment charge earlier in the year.
Scrapping the dividend will however save the company just EUR270 million, which is on its own not enough to turn the company's finances around.
Revenues for the ground fell by 5.2% to EUR23.4 billion, with most of the decline occurring at its domestic business, which fell by 9.4 percent to EUR 16.2 billion.
"The results of the 2013 financial year, especially the signs from the last quarter, regarding both the net financial debt reduction and the performance of the domestic market, leave us hopeful for 2014," emphasized the CEO Marco Patuano.
He added that the company has stepped back from domestic price cutting and now sees its revenue per customer as the highest in the country.
Although normal shareholders wont get any payout this year, the non-voting savings shareholders will see a payout of EUR 166 million.
The company ended the year with net debt of EUR27 billion, down by EUR 1.5 billion over the year.
Telecom Italia is currently looking at options to shake-up its shareholder structure so that the dominance of a small stake held by a Telefonica controlled consortium, Telco, loses its outsized influence over the company.
A decision on that is expected to be taken by April.