Consolidated net revenues for the first nine months of 2001 totalled 24,435 million euros (of which 23,550 million for the Telecom Italia Group), an increase of 9.4% from the first nine months of 2000.
Operating costs and other net recurring charges totalled 20,111 million euros (of which 18,133 million for the Telecom Italia Group) and included 974 million for amortisation of consolidated goodwill relating to the acquisition of Telecom Italia.
Earnings before non-recurring items, interest and taxes amounted to 4,324 million euros, a return of 17.7% on revenues, and were slightly higher than the figure for the first nine months of 2000, despite the significant increase (of 644 million euros) in current amortisation charges relating to goodwill. Before these amortisation charges, the return on revenues was 24.7%, an increase of 0.9 percentage points from the corresponding year-earlier period.
Non-recurring income amounted to 553 million euros and related in the main (465 million) to the Telecom Italia Group, chiefly from the sale of equity investments, from the share premium collected by Lottomatica following its IPO and from the reduction of the fine imposed on Tim by the Antitrust Authority, which had previously been provided in full.
Non-recurring charges, which totalled 2,090 million euros, related to the Telecom Italia Group for 2,047 million and arose chiefly (1,607 million) from extraordinary appropriations on prior-year goodwill and on international equity investments, effected in accordance with the new strategic guidelines.
Earnings before interest and taxes (EBIT) totalled 2,787 million euros, a return of 11.4% on revenues.
Net income from equity investments (74 million euros) consisted of dividends from subsidiary and associated companies and capital gains from the sale of equity investments.
Interest expense and other net financial charges amounted to 1,938 million euros (of which 1,246 million for the Telecom Italia Group), an increase of 675 million against the first nine months of 2000 arising largely from the higher average financial exposure of the Telecom Italia Group.
Value adjustments to financial assets generated an overall writedown of 1,424 million euros, of which 1,051 million for Telecom Italia, mainly arising from the Group’s share of the results of subsidiary and associated companies valued with the equity method, amortisation of consolidated goodwill and the restatement of securities held as current assets to reflect market values.
Income taxes amounted to an estimated 1,245 million euros, of which 1,223 million for the Telecom Italia Group.
The Olivetti Group, after minority interests, had a net consolidated loss of 2,180 million euros; before amortisation of goodwill relating to the acquisition of Telecom Italia, the consolidated loss decreased to 1,206 million.
At 30 September 2001, Olivetti Group total shareholders equity stood at 26,840 million euros (12,014 million after minority interests), compared to 28,912 million euros at 30 June 2001 (13,242 million after minority interests).
Also at 30 September 2001, Olivetti Group net financial indebtedness amounted to 42,282 million euros, an increase of 371 million from 30 June 2001 and 4,758 million from 31 December 2000. The increase in respect of December 2000 reflects the requirement of the Telecom Italia Group (5,478 million euros, including the change in the consolidation area), offset in part by the reduction of debt at the other companies in the Olivetti Group (720 million). The rise in net debt was chiefly the result of Telecom Italia’s international investments (Turkey, Brazil, Chile and Greece) and dividends of approximately 2.5 billion euros paid to minority shareholders by Group companies.
The Olivetti Group in the July-September 2001 quarter
Consolidated revenues totalled 8,246 million euros (of which 7,961 million for the Telecom Italia Group).
Operating costs and other net recurring charges totalled 6,734 million euros (of which 6,076 million for the Telecom Italia Group) and included 325 million for amortisation of goodwill relating to the acquisition of Telecom Italia.
Earnings before non-recurring items, interest and taxes amounted to 1,512 million euros, a return of 18.3% on revenues.
Non-recurring income totalled 70 million euros, while non-recurring charges were 1,757 million euros and mainly consisted of extraordinary appropriations effected by the Telecom Italia Group in accordance with the Groups new strategic guidelines.
Earnings before interest and taxes (EBIT) were negative at 175 million euros.
Income from equity investments amounted to 12 million euros.
Interest expense and other net financial charges reflected a negative balance of 702 million euros, of which 452 million for the Telecom Italia Group.
Value adjustments to financial assets generated an overall writedown of 467 million euros, including 278 million for the Telecom Italia Group.
Taxes amounted to an estimated 19 million euros, of which 13 million euros for the Telecom Italia Group, which benefited from the extraordinary writedowns of International equity investments.
The net consolidated result for the third quarter, after taxes and minority interests, reflected heavy non-recurring charges, giving a loss of 1,093 million euros (a loss of 768 million euros before amortisation of goodwill on the acquisition of Telecom Italia).
