By Mauro Orru

 

Telecom Italia SpA said late Tuesday that earnings fell in the second quarter and it would hold off on a decision over selling a stake in its secondary grid until later this month.

The Italian telecommunications company reported net profit for the quarter of 118 million euros ($139.3 million) compared with a EUR386 million profit in the second quarter of 2019.

Earnings before interest and taxes dropped to EUR509 million from EUR1.20 billion, while revenue fell to EUR3.8 billion from EUR4.52 billion.

Telecom Italia said service revenues were hurt by the effects of the coronavirus crisis, as well as the rationalization of its product portfolio.

"Financial results were affected by the effects of the closure of stores on product sales and the reduced roaming traffic to and from abroad," it said.

Despite the short-term decline, it said it expects a positive effect in the medium to long term due to the faster adoption of digital services.

Telecom Italia's board of directors will reconvene on Aug. 31 to decide on the sale of a stake in its secondary grid to investment firm KKR & Co. The terms of a deal may change following discussions with the Italian government.

KKR submitted a nonbinding offer earlier this year to be Telecom Italia's exclusive partner in fiber-network development, as the company continues to assess possible forms of integration between its own and wholesale operator Open Fiber's optical-fiber networks.

 

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

 

(END) Dow Jones Newswires

August 05, 2020 02:51 ET (06:51 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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