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TIM Group releases Q3 financials

Financial results NEW .jpg

TIM Group’s financial results have been released for the third quarter, confirming growth across cash generation and a reduction of net financial debt.

Adjusted net financial debt after lease stood at €20.7 billion, revised to €19.1 billion following the completion of the Ardian transaction in the fourth quarter. Equity free cash flow reached €1.7 billion in the first nine months; a leap of 11.7% on the second quarter.

Revenues for Q3 stood at €11.7 billion, down 5% year on year, but demonstrating a five-percentage point increase over Q2, “despite the persistence of the Covid-19 emergency”.

At €5.3 billion, organic EBITDA dropped 7.3% year on year but increased 3.2% year on year on Brazil.

When compared to 2019 figures it means TIM Group’s net profit for the first nine months increased 38% year on year, reaching €1.2 billion and net financial debt has reduced by €2.2 billion. Equity free cash flow in the first nine months reached €1.7 billion.

TIM said the launches of FiberCop and a data centre newco are still on track and that TIM Brasil has seen further growth after closing its acquisition of Oi. In fact, TIM Brasil returned to growth in the quarter with revenues from services at up 1.3% and EBITDA-Capex seeing an increase of 8.5% YoY.

Strategic initiatives

TIM has made a series of strategic announcements in recent months, which are due to generate additional income in 2021 and beyond.

On its data centre newco and cloud services, TIM said plans remained in place for a Q1 2021 launch, pending regulatory approvals. The newco is expected to generate €500 million euros in its first year, with expected annual growth exceeding 20%. Thanks to the partnership with Google Cloud in the first nine months of the year, the client base has seen strong initial growth. In March, Telecom Italia (TIM) said it is aiming for €1 billion annual revenues from cloud, edge and other services by 2024 after signing the agreement with Google Cloud. The two entered into a strategic partnership in 2019.

Work is continuing on the launch of FiberCop, which is scheduled to take place in the first quarter of 2021 once the required authorisations have been obtained. At the same time, the group said work continued on the creation of a Single Network (AccessCo), through constant dialogue with the Government and Cassa Depositi e Prestiti.

On the sale of mobile towers, TIM received payment in October for its deal with Ardian Infrastructure, which took a minority stake in the holding company for TIM’s joint controlling share in INWIT. The total value of the transaction will amount to €1.6 billion euros in the fourth quarter of 2020.

In Brazil, TIM S.A., together with Vivo and Claro, submitted a binding offer of €2.7 billion for the mobile business of the Oi Group. The consortium, comprising VIVO and Claro was admitted as a stalking horse at the auction, which is scheduled to take place by mid-December 2020.