Telecom Italia returns to profit

CEO Bernabe' confirms 2012 targets

Telecom Italia returns to profit

(ANSA) - Milan, August 2 - Italian telecommunications giant Telecom Italia on Thursday said it had a net profit in the first semester, confirmed it would pay a dividend and said it had liquidity to cover its debt payments through 2014. In a statement, Franco Bernabe', the company's CEO, said the company ended the first six months of the year with a net profit of 1.245 billion euros, compared with a 2.042 billion euros loss in the year-earlier period when the bottom line was hit by asset write downs. Revenues increased by 1.7% in the semester, reaching 14.793 billion euros, while the company's huge debt pile - a hangover from the days of a leveraged buyout which saw the then state-owned company sold to private investors - dropped by €800 million on the year-ago period, to 30.36 billion euros. Investors reacted positively to the results Wednesday, pushing Telecom Italia's shares up 4% in Milan. In the statement, Bernabe' confirmed the group would achieve its 2012 targets and said "the company has returned to solid profits, despite the worsening economic situation in Italy and the slow-down also in Latin American countries". The chief executive also noted that the consumer segment, a key driver, "confirms a progressive trend towards recovery," while small-and medium-sized businesses are still suffering Telecom, which was once a player on international markets, has had to sell assets in Germany and elsewhere as part of efforts to cut down its debts pile. It has become increasingly dependent on the Italian market - which has been battered by price wars and declining consumer spending - and its assets in South America. Bernabe' pointed out that the company successfully placed 1.5 billion euros in new debt, despite a situation of "hardship in accessing credit for the majority of Italian companies". Telecom - controlled by a core group of investors called Telco, which includes Telefonica of Spain, Assicurazioni Generali, Mediobanca and Intesa Sanpaolo - also appointed current Chief Financial Officer Andrea Mangoni as managing director of its South American operations.

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