Telefonica reported another double-digit decline in revenues in the third quarter, hurt by the Covid-19 pandemic and negative forex effects. Sales were down 12.1 percent to EUR 10.46 billion, compared to a 14.8 percent fall in Q2, while the drop in OIBDA slowed to 2.8 percent to EUR 2.67 billion, after a 25.3 percent drop in the previous quarter. On an organic basis, revenues fell 4.3 percent and OIBDA was down 8.3 percent.
The net loss narrowed to EUR 160 million from a loss of EUR 443 million a year ago. This includes an impairment charge of EUR 785 million on the business in Argentina.
Telefonica estimates the pandemic took EUR 591 million off revenues and EUR 315 million from OIBDA. This was mitigated by cost and capex controls, helping improve free cash flow 13.2 percent year-on-year to EUR 1.58 billion. The company also cut debt by another EUR 525 million in the three months, taking total net debt to EUR 38.29 billion at the end of September. Liquidity totaled EUR 22.43 billion, enough to cover debt maturities for the next two years, the company said.
The company said it also made progress on strategic goals in the period, with the launch of 5G in Spain, fibre expansion in Germany and Brazil and a review of its portfolio underway to reduce exposure in Latin America. In the UK, it's awaiting regulatory approval for the planned merger of O2 with Virgin Media. The total customer base was still down 1.2 percent year-on-year to 341.5 million accesses, amid losses in mobile prepay, pay-TV and fixed telephony.
For the full year, the company still expects flat to slightly lower operating cash flow, measured as OIBDA minus capex, excluding spectrum costs. In the first nine months the figure was down 1.8 percent on an organic basis to EUR 5.68 billion. This should support keeping the dividend at EUR 0.40 per share, while Telefonica said it would also propose to the next shareholders meeting cancelling its treasury stock, which is equal to 1.5 percent of outstanding shares.
