Telefonica revenues accelerate in Q2, profits improve

Telefonica reported second-quarter revenues up 9.0 percent from a year earlier to EUR 15.12 billion, helped by a pick-up in organic growth, positive exchange rate effects and the takeover of Hansenet in Germany. The drop in revenues in its home market Spain slowed to 3.2 percent to EUR 4.69 billion, while Latin America accelerated to 16.0 percent growth to EUR 6.44 billion in revenues, and Telefonica O2 Europe grew 14.0 percent to EUR 3.79 billion. The operator added a net 4.7 million new customers in the quarter, for a total 277.8 million at the end of June, up 5.2 percent from a year earlier. Mobile net adds reached 3.5 million, of which 59 percent were postpaid, for a total base of 211.0 million, and the number of mobile broadband users was up 87 percent year-on-year to 17 million. OIBDA rose a slower 4.0 percent to EUR 5.79 1 billion, and the OIBDA margin dropped 1.8 percent points to 38.3 percent. Telefonica blamed the lower profitability on higher interconnection and network costs in Latin America, increased staff at Atento and increased commercial costs for smartphones across all operations. The company's net profit improved to EUR 2.12 billion or EUR 0.47 per share, from EUR 1.83 billion or EUR 0.40 per share a year ago. Capex for the first half of the year was up 54.7 percent to EUR 4.30 billion due to the spectrum acquisition in Germany, while operating cash flow fell 18.6 percent to EUR 6.61 billion. Telefonica reiterated its financial targets for this year through to 2012, including its dividends plans.