Telecom Italia SpA posted a smaller full-year net loss estimated of 674 million euros (927.9 million dollars) for 2013. The company made an official statement, announcing that its sales declined by 9.1% and reached 23.4 billion euros.
The company was also reported to have suspended its ordinary dividend for common shares, while the Italian market seems to be recovering. Telecom Italia takes such a step for the first time in its history after becoming a public company. Such an omission is considered to be able to help the company save about 270 million euros, according to data compiled by Bloomberg. A dividend that amounts to 2.75 cents will be received by Telecom Italias holders of saving shares.
One of the professors specializing in media and telecommunications at Milan Bicocca university – Andrea Giuricin said in a telephone interview, which was cited by Bloomberg: “Scrapping the dividend is a wise choice for a company like Telecom Italia. Rewarding shareholders would have risked angering bondholders, after Telecom Italia recently raised more money through a convertible bond.”
Mr. Marco Patuano, who is the current Chief Executive Officer of the company, said in a news release, which was cited by the Wall Street Journal: “The gradual recovery of the domestic market will allow us to remunerate all our shareholders again in the next financial year.” He also explained that Telecom Italia intends to continue investing funds in improving its fixed-line and mobile networks on its home market.
According to Mr. Patuano, over the last few months Telecom Italia has started to revive its business, which is exactly the reason why it projects to return to paying a dividend on common shares out of its full-year 2014 earnings. According to analysts and investors such an improvement will be able to help the company avoid selling its Brazilian unit – TIM Participacoes SA.
Paul Marsch, who is an analyst working for Berenberg, said for the Wall Street Journal: “Theres no need to sell the Brazilian unit right now if the domestic business is expected to improve.”
Telecom Italia SpA rose by 0.24% by 12:32 GMT in Milan to 0.8395 euro, marking a one-year change of +45.16%. The company is valued at 15.16 billion euros. According to the Financial Times, the 23 analysts offering 12-month price targets for Telecom Italia SpA have a median target of 0.90 euro, with a high estimate of 1.25 euro and a low estimate of 0.34 euro. The median estimate represents a 7.46% increase from the previous close of 0.8375.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
