Italian telecom company Telecom Italia Group (TI: Quote, TIAOF.PK) on Thursday reported a loss for fiscal 2011, reflecting a goodwill writedown of 7.3 billion euros, or $9.75 billion, at its struggling domestic operations.
The company attributed the writedown to the deterioration of the macro economic outlook and the condition of the financial markets.
Franco Bernabè, Telecom Italia Chief Executive, said in a statement, "The goodwill write-down caused by the Olivetti/Telecom Italia deals and the purchase of the TIM minorities was made necessary by the deterioration of the macro economic outlook and of the financial markets condition."
However, Bernabe added that the writedown had no financial consequences and have no impact on the group's debt reduction plans.
Telecom Italia said it has continued deleveraging, enabling it to reduce consolidated debt by a billion euros year over year and by 5.5 billion euros since the end of 2007.
The company's net loss for fiscal 2011 was 4.73 billion euros after the writedown, compared to net profit of 3.12 billion euros in the prior year.
Excluding the write-down and other one-off charges, net profit for the year was 2.6 billion euros, substantially in line with the previous year, the company noted.
Revenues for the year rose 8.7 percent from last year to 29.96 billion euros from 27.57 billion euros in the previous year. In terms of organic variation, revenues grew by 2.7 percent.
EBITDA, a key earnings measure, increased 7.3 percent from the prior year to 12.25 billion euros.
Looking ahead to fiscal 2012, Telecom Italia reiterated a February forecast of revenues and EBITDA that are "essentially unchanged" from 2011.
The company's board has proposed a dividend of 0.043 euro per ordinary share and of 0.054 euro per savings share, for a total of about 900 million euros.
Telecom Italia said it has convened a shareholders' meeting for May 15.
TI closed Thursday's trading on the NYSE at $12.01, down $0.19 or 1.56 percent on a volume of 308,283 shares.
by RTT Staff Writer
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