Telefónica’s net profit up by 26.4%

Iñaki Ferreras | 07-11-2012

Telefónica has consolidated the improvement of its quarterly returns in all regions and, between January and September, recorded year-on-year growth rates of 10.7% and 19.6% in OIBDA and operating income, respectively.

The operator’s net profit went up 26.4% to last September to €3,455 million. The company’s earnings per share marked a turning point and rose to €0.98 per share (€0.36 in the third quarter), picking up significantly from the previous quarters.

The greater cash generated in the third quarter (€2,541 million, €4,268 million since January) and the execution of the divestment programme and asset portfolio management, including events following the close of the quarter, have enabled almost €5,500 million to be trimmed from its net financial debt to €52,823 million. This is in line with the company’s objective to cut the leverage ratio (net debt over OIBDA) to 2.35 times by the end of the year.

Thanks to an active financing policy (€13,000 million so far this year), Telefónica has already covered its debt maturities until after 2014, with a net liquidity position of €18,000 million.

For the first time ever, the revenue generated by Telefónica Latin America exceeded the revenue from operations in Europe and now represent 49% of the company’s total turnover, which has remained stable at €46,519 million. Both Latin America (+5.9%) and mobile data (+14.2%) continue to be growth drivers for the Group. Both aspects underline the value of diversification as Telefónica’s strength.

In the first nine months of the year, the greatest efficiencies stemming from the transformation initiatives and from the benefit of Telefónica’s scale have driven OIBDA to €15,782 million. The operating result has reached €8,009 million.

In operational terms, 78% of the group’s clients are mobile accesses, amounting to 246 million (+6%), supported by the sustained growth in contract users (+7%; especially in Latin America, +12%). Mobile broadband access has grown at solid rates of +40% year-on-year and already accounts for 47.7 million accesses. In Telefónica’s European operations, one-third of mobile clients are already using mobile broadband thanks to the increasing adoption of smartphones.

The company is advancing in its transformation process to become a ‘Digital Telco’ with major milestones such as the launch of the best convergent offer in Spain, the new IPTV platform in Brazil and the development of new M2M services.