Telecom Italia extends losses on goodwill writedowns
Italy`s largest phone company Telecom Italia reported first-half net loss of 1.41 billion euros from net income of 1.24 billion euros a year earlier, dragged by goodwill writedowns of 2.2 billion euros.
Shares of Milan-based Company slumped 4 percent setting for a straight nine-year losing streak, after the carrier cut its forecast on 2013 core profit. Since 2011, the goodwill writedowns exceeded $18 billion. Telecom Italia now has a market value of about 9 billion euros.
The economic hardships in Italy and tough wireless competition has forced to company to considering spinning off its fixed-line network. Telecom Italia is one step shy of junk after failing to sell a state to Hutchison Whampoa Ltd.
The debt-troubled carrier said organic group revenue dropped 2.7 percent and organic core profit fell 6.8 percent.
Chief Executive Officer Franco Bernabe is counting on foreign demand such in Brazil and Argentina, despite of slowing growth in Latin America, which accounts for nearly 40 percent of the company`s revenue.
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