(Add detail, CEO quote from analyst call)
MILAN, November 5 (Reuters) – Italy’s top cell tower operator INWIT Thursday raised its 2020 financial targets slightly as its business is supported by a deal with phone operators to launch next-generation 5G networks across the country.
Jointly controlled by Italy’s largest telephone group Telecom Italia (TIM) and Vodafone, INWIT said it expects an average annual growth of 8% in both core revenue and profit in its updated business plan through 2023.
INWIT said it expects 2020 revenues to be in the upper end of the 660-665 million euros range targeted for July.
Core earnings excluding lease and recurring free cash flow are expected to slightly exceed 415 million euros and 265 million euros.
Increasing demand for services from mobile phone operators and other radio network players is supporting INWIT’s business, which is currently largely unaffected by the COVID-19 epidemic, the company said.
“Going forward, we think 5G will drive the adoption of complementary technologies, and will drive the creation of an ecosystem as a whole”, Chief Executive Giovanni Ferigo told a call-up analyst.
INWIT said it would pay a dividend of 0.30 euros per share on the 2020 results and would increase its payout by 7.5% annually in the following years.
The telecommunications tower company, which operates more than 22,000 masts across Italy, said it reported a 0.9% increase in quarterly revenue to 186.1 million euros, slightly above the 185 million euro analyst consensus provided by Refinitiv.
Organic income before interest, taxes, depreciation and amortization (EBITDA) rose 0.7%, to 172.8 million euros for July-September, slightly above expectations of 170 million euros.
INWIT shares have risen about 20% since the start of the year, compared to a 16% drop in Milan’s blue-chip FTSE MIB index. (Reporting by Elvira Pollina; editing by David Evans, Kirsten Donovan)