The pan-European internet service provider (ISP) Tiscali has reported worse than expected first-half losses of 118.9m euros, almost seven times more than a year ago.

The Italian-based company has grown rapidly during the past year, buying up a string of struggling rivals across Europe.

As a result, sales at Tiscali have grown a massive 277% to 258.7m euros. A year ago the company's turnover stood at just 68.7m euros.

But despite a massive cost-cutting programme, which involved axing hundreds of jobs, the losses keep piling up.

"In two quarters we have reduced costs by 46% and will continue to do so for the rest of the year as part of our plan to cut expenses," said Tiscali's chief executive Renato Soru.

Mr Soru's reassurances could not stop the markets knocking 2.24% off the company's share price in Milan.

Growing the business

The ISP has been on an aggressive acquisition and investment spree, snapping up 11 other ISPs and portals since the start of the year.

Analysts have questioned whether the ISP will achieve its target of reaching profitability - at least before interest payments, taxes, depreciation and amortisation (EBITDA) - by the fourth quarter of this year. The costs of the on-going expansion may thwart these plans, they believe.

Earlier this month, Mr Soru said that Tiscali still had 900m euros in cash reserves.

Losses mount

On a pro-forma basis, first-half EBITDA losses were 166.3m euros, down 52% on a year earlier.

Of the EBITDA losses, Tiscali said it and Dutch ISP World Online accounted for 91.4m compared with losses of 202.3m a year earlier.

But French ISP Liberty Surf cut losses by only 7.5% while those at UK ISP Line One rose by 19%.