The Telecom Italia Group saw its net consolidated profit sink by 50.7 percent to 483 million euros (US$434 million) in the first half of 2001, Telecom Italia SpA announced Wednesday.

Group revenue amounted to 15.589 billion euros, a 9.7 percent increase on the figure recorded in the first half of the previous year, the company said in a prepared statement.

The group's net financial debt rose from 19 billion euros as of Dec. 31, 2000 to 24.459 billion euros at the end of June 2001, it said.

The increase in debt was largely due to international investments in Turkey, Brazil and Chile of around 5 billion euros and a dividend distribution of 3 billion euros, the company said.

The group's profitable mobile phone subsidiary, Telecom Italia Mobile SpA (TIM), reported a 10 percent increase in consolidated operating profit to 1.6 billion euros for the same period, the statement said.

TIM's revenue stood at 4.9 billion euros in the first half of 2001, a 9.2 percent increase on the previous year.

The results were in line with expectations announced at the beginning of the year, Telecom Italia said.

Traffic volumes and the number of clients increased significantly in Italy during the period, with fixed telephony showing an increase of 28 percent in volume and 2 percent in client numbers, and mobile telephony growing by 17 percent and 13 percent respectively, it said.

The Italian incumbent, which was bought at the end of July by the Pirelli SpA cables group and the Benetton Group, saw the price of shares in group companies plummet a week ago following the authorization of a possible capital increase for Olivetti SpA by the new owners.

Investors reacted negatively to the Telecom Italia results Thursday. Telecom Italia was down 2.5 percent, TIM down 1.74 percent and Olivetti down 1.60 percent in early trading, Italian news agencies reported.