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TIM board approves Q1 results

Infrastructure News - Published on Tue, 21 May 2019

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TIM Board of Directors met under the chairmanship of Fulvio Conti and approved the interim management report of TIM Group at March 31st. Results are showing first evidence of the strong drive of the new management on cost reduction and on redesign of internal processes that have an impact on cash generation. Net debt was reduced by EUR 190 million, operating free cash flow reached EUR 541 million (558 miillion higher compared to Q1 2018), equity free cash flow grew to EUR 216 million (550 million better than Q1 2018). Group revenues in the first quarter are EUR 4.5 billion (-2.9% YoY). Service revenues reached EUR 4.1 billion with a 3.0% reduction YoY impacted by Sparkle’s decision to close contracts related to low-zero margin International Wholesale services. Net of such impact (-EUR 53 million YoY) the service revenues variation is -2% YoY at Group level (-1.8% in Q4 2018) and -2.7% for the Domestic business unit (-3.0% in Q4 2018).
 
With regards to Italy, in the first quarter 2019, fixed consumer ARPU grew +9.4% YoY and fiber customers reached almost 6 million lines, retail and wholesale, with a remarkable growth of 58% YoY and 10% QoQ. ICT business continues to grow double-digit (+16% YoY). As a result, retail fixed service revenues were +1.5% YoY and overall fixed service revenues were flat YoY despite the impact of the above-mentioned discontinuity at Sparkle.
 
In mobile TIM’s strategy of focusing on quality rather than prices is paying-off. The entire market became more rational notably on pricing and the so called “washing-machine” effect of clients stepping from one operator to the other (Mobile Number Portability) cooled down.
 
TIM mobile lines were 31.7 million at the end March, up 2.3% YoY. Churn rate was lower: -1.4pp YoY and -1pp QoQ.

Looking at market segments, both the domestic Business segment and the domestic Wholesale segment were substantially flat YoY as the impact of lower wholesale prices was almost entirely offset by the strong growth of wholesale fiber. Consumer service revenues were down YoY as the benefit of the improved competitive scenario will take some time to turn into better revenue performance.

In Brazil TIM increased revenues 1.7% YoY thanks to the contribution of high-value postpaid customers and a stable overall market share, allowing TIM Brazil to reiterate guidance.

Group organic EBITDA was 1.8 billion euros, -2.1% YoY, strongly improved vs. -9.9% in Q4 2018. EBITDA margin grew to 40.7% from 40.4% thanks to cost cutting actions. The Domestic Business unit EBITDA was 1.5 billion euros (-4.0% YoY), with a strong improvement versus Q4 2018 (-13.2% YoY). TIM Brazil EBITDA grew 5.5% YoY in line with Q4 (+5.4% YoY).
 
TIM has already reached around 99% of the population with 4G and 80% with Fiber, and is committed to cover the entire Country with fiber deployment, 5G and Fixed Wireless Access. In the first quarter 2019 TIM CAPEX were 0,6 billion euros with a 6.5% reduction YoY (0.5 billion euros Domestic, -10.3% YoY) thanks to increased efficiency. During the first quarter TIM was confirmed as the best mobile network in Italy.

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Posted By : TelecomGuru on Tue, 21 May 2019
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