FiberCop (Underweight) Higher capex puts leverage under pressure
FiberCop has recently provided a new financial outlook out to 2029 and higher than expected capex levels will put further pressure on near-term cashflow and leverage levels. We now expect FiberCop to generate 2024-2028 OpFCFaL of -€2.4bn, compared to our previous estimate -€1.5bn – and this compares to Telecom Italia’s 2022 guidance before the sale process started that it would generate +€2.4bn of OpFCF over that time, ie a €4.8bn difference on a debt stack of €9bn. In this note, we run through the new outlook in detail, implications for our value of the asset and the M&A outlook in Italian fibre.
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