Telefonica reported second-quarter revenues down 11.8 percent year-on-year to EUR 12.73 billion, hurt by continued weakness in its home market, divestments, exchange rates and regulatory effects. OIBDA fell 15.0 percent to EUR 4.13 billion, due to a rise in costs for higher customer additions, giving a margin of 32.4 percent. Excluding the sale of its Czech and Irish operations and currency effects, Telefonica's organic revenues rose 1.3 percent, and OIBDA was down 0.7 percent. While revenues in Spain still fell 9.1 percent, the UK grew by 0.1 percent on an organic basis, Brazil was up 1.0 percent and the rest of Latin America increased revenue 11.3 percent. Net profit increased 4.9 percent year-on-year to EUR 1.21 billion.
Telefonica said it was starting to see the benefits of increased network investment, with accelerated growth in mobile data and steady expansion of the TV and fibre customer bases. Capex was up 27.2 percent on an organic basis in the first half of the year to EUR 3.52 billion, while operating cash flow fell 13.5 percent to EUR 4.53 billion. Net debt was up by EUR 1.07 billion in Q2 due to the dividend payment, reaching a total EUR 43.79 billion at the end of June. Including the proceeds from selling O2 Ireland, which closed in July, net debt was at 2.43 times EBITDA. Telefonica said the first-half results support its full-year outlook for stable organic revenues, a drop in the OIBDA margin of 0.9 percentage points year-on-year and capex at 13.7 percent of revenue.
Telefonica ended the quarter with 249.43 million mobile customers, up by almost 2 million from March and stable year-on-year. The share of prepaid fell further to 64.7 percent, and smartphone penetration reached 32 percent at the end of June. Mobile broadband customers were up 8.4 percent year-on-year to 81.30 million, while fixed broadband users were down by 35 percent to 17.64 million. TV customers increased by 625,000 in the three months to 4.19 million.
