Telecom Italia 1Q Net Profit EUR606 Million, To Begin Sale Of Media Operations

By Giada Zampano

Of DOW JONES NEWSWIRES

ROME -(Dow Jones)- Telecom Italia SpA (TI) said Wednesday its first-quarter net profit rose by 10% as its Latin American operations boosted revenue and its struggling domestic business started to show improving signs.

Telecom Italia also said it decided to start the process for the sale of its media operations in an attempt to focus on its core activities and slash its debt.

Such disposal will help to cut back the company's net debt to its 2012 target of EUR27.5 billion ($35.6 billion). Telecom Italia closely watched net debt dropped to EUR30.3 billion in the first quarter, compared with EUR30.4 billion at the end of December.

Telecom Italia said earlier this week it would examine Wednesday the different strategic options related to its majority stake in broadcasting unit loss-making broadcasting unit Telecom Italia Media SpA (TME.MI).

Telecom Italia Media posted a net loss of EUR15.7 million in the first quarter, compared with a EUR9.2 million loss reported in the same period a year ago.

Over the weekend, press reports said Telecom Italia would decide on the sale of its 77% stake in TI Media, which broadcasts the La7 and Mtv channels, and owns three multiplex.

La7 showed solid margins of growth in 2012, carving a niche in Italy's free-to-air TV market and attracting popular TV hosts and journalists from state broadcaster RAI and Mediaset SpA (MS.MI).

Italy's largest telecommunication operator posted a EUR606 million first-quarter net profit, compared with EUR549 million a year earlier, as revenue grew 4.5% to EUR7.39 billion. The results were slightly above analysts' forecasts, which predicted a EUR557.7 million net profit and EUR7.3 billion in revenue.

Telecom Italia said its consolidated earnings before interest, taxes, depreciation and amortization, or Ebitda, rose 1.2% to EUR2.96 billion on the year.

The Italian operator said its core domestic businesses posted a 3.3% decline in revenue to EUR4.25 billion.

Its Brazilian operations performed strongly, posting a 29.5% jump in profits as net revenue rose by 19% due to growth in voice and data services.