January 20, 2020 / 12:11 PM / a month ago

Italy's Tiscali targets 25% EBITDA margin in medium term -CEO

MILAN, Jan 20 (Reuters) - Italian telecoms provider Tiscali aims to increase its core profit to 25% of revenues in the coming years, CEO Renato Soru told Reuters, as the company seeks to relaunch after securing new investors last year.

An internet pioneer in the 1990s, Sardinia-based Tiscali later ran into trouble due to its large debt and it is now a penny stock.

In the first half of last year the company reported an EBITDA of 15 million euros, with 13 million euros of that due to one-off items, on revenue of 70 million euros. Excluding one-off items, its EBITDA margin was around just 2.8%.

Last May Claudio Costamagna, an ex-Goldman Sachs banker and former head of state lender CDP, bought a 22% stake in the group together with Alberto Trondoli, the former CEO of fibre-optic group Metroweb, and Manilo Marocco, another telecoms executive.

The three managers currently own 19.6% of Tiscali through their Amsicora holding company. Founder and CEO Renato Soru owns 7%.

Soru said Tiscali had already cut costs by revising contracts with its main network providers including Telecom Italia and now wants to increase its customer base by offering new services, including for home users and additional security services.

“After a couple of years and a first half of 2019 in which we saw customers decrease, in the second half we started growing again and we closed the year with a slightly higher number of users,” Soru said in a phone interview last week, with comments authorised for publication on Monday.

The number of Tiscali subscribers fell by 108,000 in 2018 to 640,000. They dropped by a further 43,000 in the first half of last year.

Soru said Tiscali targeted earnings before interest, tax, depreciation and amortisation (EBITDA) equivalent to 25% of sales in the medium term. The company will update investors after releasing its full-year earnings at the end of February, he said. (Reporting by Stefano Rebaudo; Editing by Susan Fenton) ;))

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