Telecom Italia Media: the Board of Directors Approves the Group's Half–year Report at 30 June 2014

07/29/2014 - 07:00 PM

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This press release contains a number of alternative performance indicators not contemplated under IFRS (EBITDA, EBIT, Net Financial Position). Definitions of these terms are provided in the attachment.

NET RESULT: -5.2 million euro (-133.5 million euro in H1 2013, which included the amount of the Discontinued Operations relating to the disposal of La7 and MTV Italia for 137.9 million euro)

REVENUES: 30.6 million euro; -8.0 million euro compared to H1 2013 (38.6 million euro)

EBITDA: 11.3 million euro; -7.0 million euro compared to H1 2013 (18.3 million euro)

EBIT: -2.1 million euro; -6.2 million euro compared to H1 2013 (4.1 million euro)

NET FINANCIAL POSITION: 257.6 million euro; 259.9 million euro at the end of 2013

OPERATING FREE CASH FLOW: 7.3 million euro

Merger of TIMB and Rete A operations finalised; Persidera, the leading independent digital terrestrial operator in Italy, formed.

Market sounding for entities interested in acquiring Persidera started.

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The Telecom Italia Media Board of Directors, chaired by Severino Salvemini, examined and approved the Group’s half-year report at 30 June 2014.

Consolidated Group revenues reached 30.6 million euro in the first half of 2014, with a decrease of 8.0 million euro compared to the same period of 2013 (38.6 million euro). This result was entirely attributable to the Network Operator in relation with the expiry, at year-end 2013, of some contracts, only partially offset by higher revenues from other customers.

EBITDA amounted to 11.3 million euro, a 7.0 million euro decrease compared to the first half of 2013 (18.3 million euro), mainly reflecting the decline in revenues, which was only partially offset by a reduction in operating expenses of the Network Operator.

EBIT amounted to -2.1 million euro, thus decreasing by 6.2 million euro compared to the first half of 2013 (4.1 million euro), and included lower amortisation for 0.8 million euro entirely attributable to the Network Operator.

Net result amounted to -5.2 million euro compared to -133.5 million euro in the first half of 2013, which included an overall amount of Discontinued Operations of -137.9 million euro relating to the disposal of La7 and MTV.

Net financial position amounted to 257.6 million euro, down by 2.3 million euro compared to year-end 2013 (259.9 million euro). This reduction was mainly attributable to the industrial investment requirements for the period of 3.7 million euro (associated with the completion of the Transport and Backup Network and the implementation of the broadcasting infrastructure for Network Operator’s “Playout” television channels), the result of the operating activities for the period (EBITDA -11.3 million euro and  D  Working Capital 0.3 million euro), and the net effect of the consolidation of Rete A (21.1 million euro), as well as the collection of the tax consolidation revenue of 20.5 million euro, chiefly associated with the payment of interest on debt.

Results by Business Unit

The Network Operator Business Unit includes the operations of Telecom Italia Media Broadcasting (TIMB) relating to the management of the Digital Multiplexes, as well as the offering of accessory services and broadcasting platforms. On 30 June 2014, TIMB changed its company name into Persidera S.p.A.; for illustration purposes, any references to TIMB will have to be understood as referring to Persidera.

Network Operator (TIMB)

The Network Operator’s revenues and income amounted to 31.1 million euro, decreasing by 9.4 million euro compared to the same period of 2013 (40.5 million euro). As illustrated above, this result was attributable both to the expiry of certain agreements and the decrease of other revenues, which were only partially offset by higher revenues from other customers.

EBITDA amounted to 15.2 million euro, a 6.4 million euro decrease compared to H1 2013 (21.6 million euro). This performance was mainly impacted by the above-mentioned lower revenues, which were only partially offset by lower operating expenses arising on lower provisions for risks related to trade receivables and future charges.

EBIT amounted to 1.8 million euro, a 5.6 million euro decrease compared to the first half of 2013 (7.4 million euro), due both to the change in EBITDA and lower amortisation of 0.8 million euro. It should be noted that, starting from 2014, the useful life of frequencies was extended from 31 December 2028 to 31 December 2032.

Investments for the first half of 2014 totalled 3.7 million euro and were mainly aimed at completing the transport network and implementing the broadcasting infrastructure for television channels (Playout).

In the first half of 2014, TIMB’s operating free cash flow amounted to 12.1 million euros.

At 30 June 2014, the three digital multiplexes of TIMB covered 95.2% of the Italian population. The relevant signals are broadcast from 812 broadcasting sites throughout the Italian territory. The allocated broadcasting capacity amounted approximately to 62.3 Mbps, corresponding to about 94% of available capacity.

Extraordinary Transactions

The merger process between Persidera and Rete A continues with a plan to accelerate and maximise the synergies between the two companies. This plan also envisages the merger of Rete A into Persidera by the end of this year.

In parallel, TIME and Gruppo Editoriale l’Espresso (holding 70% and 30% of the capital of Persidera, respectively), for which Mediobanca and Banca IMI, respectively, continue to act as financial advisors, began to sound the market for entities interested in acquiring Persidera.

Outlook

The Telecom Italia Media Group, following the sale of its television business units La7, La7d and MTV Italia, has focused its development strategy on the implementation of initiatives aimed at restoring the Group’s efficiency and profitability. In light of the economic and regulatory environment in which Telecom Italia Media operates, and without taking account of the effects arising from the merger of TIMB and Rete A, for 2014 the Network Operator’s present level of bandwidth rental is expected to be maintained, also by acquiring new customers, and expanding the offering of additional services, in addition to allowing a positive operating cash generation, while maintaining a tight cost control.

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Pursuant to sub-section 2, clause 154-bis of the Unified Finance Act, the manager in charge of drafting the company’s accounting documents, Luigino Giannini, has declared that the accounting disclosures contained in this press release correspond to the data records, accounting books and accounts entries.

Rome – 29 July 2014