Moody's: Telecom Italia's weak Q1 results reflect challenges to deliver performance targets
Global Credit Research - 21 May 2013
Madrid, May 21, 2013 -- Telecom Italia S.p.A.'s weak Q1 results reflect challenges it is facing to deliver operating performance targets and thereby maintain its current rating, says Moody's Investors Service in a Credit Focus report on the company published today.
The new report, entitled "Telecom Italia: Answers to Frequently Asked Questions", is now available on
Moody's - credit ratings, research, tools and analysis for the global capital markets. Moody's subscribers can access this report via the link provided at the end of this press release
"We expect Telecom Italia S.p.A. to miss some of its operating performance targets in 2013, evidencing that strong headwinds will test management's ability to deliver financial metrics needed to maintain the current rating," says Carlos Winzer, a Senior Vice President in Moody's Corporate Finance Group and author of the report. "These challenges will be further exacerbated by Italy's declining GDP."
On 11 February 2013, Moody's downgraded Telecom Italia's ratings to Baa3 from Baa2 and maintained the negative outlook. This rating action was in anticipation of the company's performance and cash flows declining in 2013 and of a potentially slow recovery thereafter.
Further downward pressure on the rating could potentially result if Telecom Italia deviates from management's announced debt reduction target and the company's overall financial metrics do not gradually improve in line with the plan. The plan includes a reported net financial position of less than €27 billion by year-end 2013 (from €28.3 billion as of 31 December 2012), as well as a positive low single-digit compound annual growth rate (CAGR) in revenues and EBITDA through 2015.
Moody's expects the company's recent €750 million hybrid bond issuance, together with an additional €2.2 billion to be issued over the next 18-24 months from February 2013 and a dividend cut, to mitigate negative pressure on adjusted leverage. The rating agency took these measures into account in its recent downgrade of Telecom Italia's rating. However, the current rating hinges on management's ability to stabilise the declining domestic business and thereby sustain operating cash flow and improve credit metrics.
... Telecom è un'azienda cotta..vediamo se scorporando la rete, creando delle newco (cosa già in essere, vi ha "trasferito" 12000 dipendenti) ...e magari vendendo qualcosina...ai cinesi...egiziani....magari sopravvive....mamma mia, pensandoci bene, quella che doveva essere il fiore all'occhiello delle telecomunicazioni italiane, ridotta a chiedere l'elemosina al terzo mondo.... Ancora grazie a D'Alema.....
a chi lavora per voi
, mi sto tirando una bottiglia di ottimo prosecco.... tiè
