Telefonica meets target for nearly stable FY cash flow, sees lower div in 2021 as capex resumes

News General Europe 25 FEB 2021
Telefonica meets target for nearly stable FY cash flow, sees lower div in 2021 as capex resumes

Telefonica has met its target for only a small drop in operating cash flow in 2020. Despite a sharp fall in revenues due to the Covid-19 pandemic, operating cash flow (OIBDA - capex) was down just 0.9 percent to EUR 7.76 billion, and the company still managed to reduce debt by EUR 2.5 billion during the year. Telefonica maintained its dividend at EUR 0.40 per share, but said the figure would drop to EUR 0.30 in 2021 as it returns to a more normal level of capital expenditure at 15 percent of revenue. 

Revenues in 2020 fell 11.0 percent to EUR 43.08 billion, and OIBDA was down 10.7 percent to EUR 13.50 billion. On an organic basis, the figures declined by respectively 3.3 and 5.7 percent. Telefonica said the trends improved somewhat in Q4, with revenues down just 2.0 percent on an organic basis and underlying EBITDA off 2.8 percent.

Overall, the pandemic took an estimated EUR 508 million off revenues in Q4 and EUR 1.91 billion in the full year, which led to respective drops in OIBDA of EUR 291 million and EUR 977 million. Telefonica said it aims to stabilise both reveneus and OIBDA in 2021, on an organic basis. 

The subscriber base increased by 0.3 percent to 345.43 million at year-end, led by a 1.8 percent rise in mobile lines to 266.2.9 million. Mobile growth was largely due to a 10 percent increase in IoT connections and 2.5 percent rise in contract customers to 108.59 million. Broadband connections fell 3.6 percent to 20.08 million, and pay-TV subscribers dropped 4.5 percent to 8.06 million.

Telefonica said it increased its footprint of 'ultra broadband' homes passed by 11.0 percent to 61.8 million, including 47.8 million with FTTH. The number of FTTH subscribers was up 21.2 percent over the year to 9.96 million, equal to 50 percent of the fixed broadband base (+10 percent points). 

Net profit improved 38.5 percent to EUR 1.58 billion over the full year, helped by one-time gains. Capex was reduced 33 percent in 2020 to EUR 5.86 billion, while free cash flow still dropped 18.9 percent to EUR 4.79 billion. Net debt was down 6.7 percent to EUR 35.32 billion. 

Categories:

General

Companies:

Telefonica

Regions:

Europe,  Latin America and the Caribbean

Countries:

Spain

Tags:

Financial figures, Wireline, Wireless

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