Telefonica has announced the effects of Venezuela’s currency devaluation on the Telefonica Group. On 8 February, the government of Venezuela devaluated the country’s currency from 4.3 bolivars per dollar to 6.3 bolivars per dollar.
Telefonica says that the decision adopted by the Venezuelan government only affects the estimations made by the Telefonica group on the liquidation value of the net foreign currency position related to the investments in Venezuela, whose impact on the 2012 financial year amounts to an approximate pre-tax loss of EUR 438 million, with no impact on debt.
Telefonica estimates the bolivar devaluation will result in a EUR 1 billion reduction in the value of the company's net assets in Venezuela. As part of the decrease, there will be a reduction on the euro value of the net financial assets denominated in bolivars, for approximately EUR 873 million, considering the existing balance as of 31 December 2012.
