Telefonica sales slow, profits improve

News General Latin America and the Caribbean 7 NOV 2012
Telefonica sales slow, profits improve
Telefonica reported a strong improvement in net profit over the first nine months of 2012, up 26.4 percent from a year earlier to EUR 3.46 billion. Revenues were down 0.3 percent to EUR 46.52 billion, as growth of 5.9 percent in Latin America was offset by a 6.4 percent drop in Europe. OIBDA improved 10.7 percent to EUR 15.78 billion, helped by the operator's policy of ending handset subsidies. 

The company highlighted sequential improvements in OIBDA in the third quarter across all regions thanks to its ongoing cost reductions, as well as a substantial reduction in its net debt versus end-June, of EUR 2.3 billion to EUR 56.01 billion. Another EUR 3.2 billion has been raised for debt reduction since the end of Q3. Net debt was still at 2.56 times OIBDA, higher than Telefonica's target of 2.35. However, Telefonica said it has refinanced and covered all debt due through 2014. 

Free cash flow over the first nine months was down 25 percent year-on-year to EUR 4.27 billion, but improved to EUR 2.54 billion in Q3, nearly flat versus a year ago. Capex was down 14 percent year-on-year to EUR 5.7 billion, due mainly to fewer spectrum acquisitions. 

Telefonica slightly lowered its outlook for revenues in the full year, now forecasting a flat result rather than at least 1 percent growth. It still expects a smaller fall in the OIBDA margin than in 2011 and capex at a similar level. It reiterated a forecast for a dividend of 75 cents a share in 2013. 

Telefonica finished September with total 314 million access lines, up 5 percent year-on-year. Mobile subscribers grew by 10.5 million since the start of the year to 246 million, and mobile broadband customers were up 40 percent year-on-year to 47.7 million. Retail fixed broadband users increased by 4 percent year-on-year to 18.5 million, with 458,000 net additions since the start of the year. 

Categories:

General

Companies:

Telefonica- Movistar

Regions:

Europe,  Latin America and the Caribbean

Countries:

Spain

Tags:

Voice services, Data services, Financial figures, Internet Access

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