VIV Vivendi SE

   By Manuela Mesco 
 

MILAN--Telecom Italia (TI) said Tuesday its first-half net profit reached 1 billion euros ($1.1 billion) as the company benefited from the effects of a convertible bond issued in 2013.

The largest Italian telecom operator said that without such accounting effects, net profit would be almost flat on the year.

A change in the company's shareholding structure, now dominated by French media group Vivendi SA (VIVEF), saw the introduction of new executives. Chief Executive Marco Patuano left over clashes with the French firm's executives on Telecom Italia's board and was replaced by Flavio Cattaneo in March.

Vivendi, in the meantime, pushed for stronger cost-cutting measures and a resolution to issues at Telecom Italia's underperforming Brazilian unit.

On Tuesday, Telecom Italia said that it's simplifying processes and controlling costs in Italy. It aims at reaching a total of EUR1.6 billion in cost savings by 2018. The company is also looking at cutting costs at its Brazilian unit.

Telecom Italia said first-half revenue was down 9.9% on the year, at EUR9.1 billion, as its Brazilian business weighed on overall performance.

The Italian market, which accounts for nearly 80% of overall revenue, saw revenue fall 1.7% on the year, but Telecom Italia stressed the decline is slowing.

It revised its outlook upward for the year, saying it now expects low-single digit growth in domestic Ebitda for the year. The company previously said its domestic Ebitda would stabilize this year.

Earnings before interest, tax, depreciation and amortization was up 2.4%, at EUR3.7 billion.

Write to Manuela Mesco at Manuela.Mesco@wsj.co

(END) Dow Jones Newswires

July 26, 2016 15:39 ET (19:39 GMT)

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