Telefonica reported a drop of 16.3 percent in first-half net profit to EUR 3.162 billion, as the company took a charge of EUR 353 million to write down the value of its stake in Telecom Italia. The Spanish operator's revenues still showed healthy growth of 18.4 percent year-on-year to EUR 30.886 billion, led by its activities in Latin America and growth in mobile data services. Growth was 18.4 percent in Latin America, helped by the full consolidation of Vivo in Brazil, while revenues in Europe at O2 grew by 2.2 percent and Spain was down 6.1 percent. Group OIBDA increased 3.7 percent to EUR 11.304 billion. Telefonica said growth was supported by the integration of its fixed and mobile activities in Brazil, which will soon become its biggest revenue source. It raised the target for synergies at the Brazil operation to EUR 3.7-4.6 billion. The group finished June with a total 227.3 million mobile customers, up 8 percent from a year earlier. This was supported by 13 percent organic growth in the postpaid base, which accounted for 32 percent of total customers at the end of the period. Mobile broadband users reached 29.8 million, or 13 percent of the customer base, led by a penetration of 28 percent of customers in the Europe operations and 23 percent in Spain. At the fixed-line business, retail broadband customers were up 8 percent from a year earlier to 17.6 million, and pay-TV subscribers rose by 16 percent to 3.1 million. Fixed telephony customers fell by 3 percent to 40.7 million. Telefonica's capex was down 10.6 percent in the first half to EUR 3.838 billion, due in part to spending on spectrum in Germany last year. Cash flow reached EUR 7.466 billion. The company said it's on track to meet its full-year guidance, despite the challenging conditions in some markets.
