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Spanish telecoms group Telefónica swung to a profit in the fourth quarter, but saw revenues trimmed slightly by exchange rate fluctuations.

Quarterly net earnings at the country’s largest phone company rose to €145m from a loss of €2.24bn in 2015. Revenue in the fourth quarter was €13.7bn, down 1 per cent compared to the same quarter last year. Revenues grew in Brazil, but sales fell in the rest of Latin America, Spain, Germany and the UK. The company said it lost 3.2 percentage points in revenue growth to exchange rate effects.

Earnings per share were €0.01, compared to a loss of €0.45 a year ago. The results were affected several one-off factors, including €1.29 billion in restructuring costs.

Telefónica chief executive José María Álvarez-Pallete said in a statement:

The 2016 results strengthen our sustainable growth, following the acceleration of growth rates in our main operating variables during the fourth quarter. At the same time, the strong acceleration in cash generation during the year and securing long-term financing accelerate deleveraging and strengthen our financial structure.

Voice and access revenues dropped 9.7 per cent while broadband revenues rose 9.6 per cent and other service over connectivity revenues rose 7.0 per cent.

Telefonica’s debt fell to €48.6bn at the end of December from €49.1bn a year before. In a bid to cut debt further, earlier this week, the company said it had agreed to sell up to a 40 per cent stake in its tower subsidiary Telxius to private equity firm KKR for €1.275 billion.

Copyright The Financial Times Limited 2017. All rights reserved.
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