Cost cutting programs are bearing fruit at Telecom Italia, which saw 2Q profits rise 22% despite generating little extra revenue during the period.
Profit of €610 million was up from €499 million in 2Q09 on stable revenues of €6.81 billion, as the firm’s tight rein on costs helped offset lower fixed line income and fierce competition in the firm’s domestic mobile market.
EBITDA grew 3.5% to €2.9 billion, and boosted the firm’s confidence in its full-year forecast of a 2% to 3% fall in revenues compared with 2009.
The firm beat analyst’s forecasts it would generate a profit of €575 million in 2Q, WSJ.com reported.
Telecom Italia also paved the way for future growth by ending a dispute with the Werthein Group, its partner in Sofora – the firm that runs Telecom Argentina.
The deal “allows us to resolve all outstanding disputes with our local partners, and extend the range of our growth options in Latin America,” CEO Franco Bernabe said in a statement.
A deal with Italian union SCL CGIL to shed 3,900 jobs unveiled mid-week will contribute to Telecom Italia’s continuing cost-cutting program. The telco aims to cut almost 6,000 Italian staff by 2012.
Net income for 1H10 grew 26.3% to €1.2 billion, with revenues of €13.2 billion in-line with the same period in 2009.