Fastweb 2Q Net Profit Tumbles On Higher Taxes, Costs

Italian broadband operator Fastweb SpA (FWB.MI) said Thursday its net profit in the second quarter tumbled on higher provisions for costs, with consolidated revenue and earnings before interest, taxes, depreciation and amortization, or Ebitda, unchanged.

The Milan-based broadband operator, which was acquired by Swisscom AG (SCMN.VX) in 2007, said it posted a second-quarter net profit of EUR2.9 million, down over 81% from EUR15.6 million recorded a year earlier.

Italy's second-largest telecoms operator by market value after Telecom Italia SpA (TI) said second-quarter Ebitda was unchanged at EUR144 million and that EBIT fell over 24% to EUR33 million on higher taxes.

In April, Fastweb avoided being put under court administration due to a probe for alleged tax fraud. Prosecutors allege the tax-fraud scheme was carried out between 2003 and 2006, with the knowledge of top executives at Fastweb and rival Telecom Italia SpA's (TI) unit Sparkle. Both Fastweb and Sparkle have denied any wrongdoing. As part of the same case Chief Executive Stefano Parisi suspended himself from the post and Swisscom Chief Executive Carsten Schloter is acting as head of Fastweb.

-By Sabrina Cohen, Dow Jones Newswires, [phone]; [e-mail]