- Telecommunications investor Zegona Communications booked a fall in first-half profit, largely owing to a decline in its finance income related to a change in the way it reported its investments

Zegona Communications's main asset is a 21.4% stake in Spanish telecommunications provider Euskaltel.

The company's pre-tax profit for the six months through June decreased to €7.1m, down from €33.7m on-year.

The fair value of the company's investment in Euskaltel fell to €302.6m at 30 June, down from €341.6m at the end of December. It had since fallen further to €295.3m at 3 September.

Zegona said the fall in profit was principally due to the change in the reporting of its investment in Euskaltel.

Last year, the company concluded that it did not have significant influence over Euskaltel and therefore accounted for its investment in Euskaltel as a financial asset carried at fair value through profit and loss.

At the underlying level, Zegona said operational developments were continuing to deliver positive results, with Euskaltel returning to growth in the fourth quarter of 2019 and the momentum continuing in both the first and second quarters of 2020.

On 23 July, Euskaltel published its results for the second quarter of 2020, announcing that it had exceeded its key strategic targets, with a revcord €91.8m in second-quarter operating earings within the traditional business.

'The impact of Covid-19 on the business has been limited, with growth achieved in key financial metrics,' Zegona said.

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