Telefónica Reports €1.3 Billion Loss Amidst Strategic Business Changes
Company's First Results Under New Management Reflect Impact from Exiting Latin America.
Telefónica has recorded a loss of €1.304 billion in the first quarter of 2025, primarily due to the sale of its operations in Argentina and Peru.
These preliminary results have been released under the management of Marc Murtra, the company's new president, who confirmed a dividend of €0.30 per share.
Excluding the discontinued operations, Telefónica reported an adjusted profit of €427 million and a slight increase in revenues to €9.221 billion, reflecting a year-on-year rise of 1.3%.
However, compared to the same period in 2024, revenues are down by 2.9%.
The financial losses stem from an impact of €1.734 billion, comprising €1.200 billion from the exit of Telefónica Argentina and €500 million from the exit of Peru.
Telefónica fell into losses for the first time since 2002 in the previous year, raising concerns that the company's restructuring to exit Latin American markets could extend the period of negative financial performance.
In contrast, the Spanish market remains the largest and most profitable segment for Telefónica, generating €3.170 billion in revenue and nearly €1.130 billion in net profit, representing growth of 1.7% and 1%, respectively.
Spain is the only market within the group that has shown growth, while Hispanic markets contracted by 8.6%, Germany by 2%, and Brazil by 7.2%.
The depreciation of the Brazilian real has notably impacted revenues, contributing a loss of €388 million, while a stabilizing interest rate environment in 2024 could have facilitated a potential growth of over 6% in that market.
Emilio Gayo, the CEO, emphasized that the results are in line with the group's expectations.
Looking forward, Telefónica anticipates concluding the sale of its Colombian business soon while finalizing a strategic review aimed at focusing the company on its growth in Europe.
Alongside this, Telefónica has realized a capital gain of €96 million from selling its stake in the data centers company NABIAX.
The exit from the three mentioned Latin American markets has generated approximately €1.5 billion in cash for Telefónica.
Additionally, the company has shown signs of resilience in key markets, particularly in its enterprise business, which grew by 5.4%.
At the close of the quarter, Telefónica reported a debt of €27.049 billion and reiterated its guidance of revenue and EBITDA growth for the upcoming periods.
The company allocated €938 million towards infrastructure investments, reflecting a 6.7% decrease as it enters a phase described by its president as characterized by "iron financial discipline."
In the Spanish market, Telefónica continues to improve its performance, adding 66,000 new subscriptions in television, marking the best quarter in six years.
This achievement coincides with managerial changes at Movistar Plus+.
The company has also experienced a 5% increase in access due to its partnership in Fiberpass with Vodafone and a 40% increase in Internet of Things (IoT) connections.
Moreover, Telefónica maintains its pricing strategy, with an average revenue per user (ARPU) of €92.3, while over half of its customer base currently subscribes to its 1 Gbps fiber offerings, which carry an additional fee.
These preliminary results have been released under the management of Marc Murtra, the company's new president, who confirmed a dividend of €0.30 per share.
Excluding the discontinued operations, Telefónica reported an adjusted profit of €427 million and a slight increase in revenues to €9.221 billion, reflecting a year-on-year rise of 1.3%.
However, compared to the same period in 2024, revenues are down by 2.9%.
The financial losses stem from an impact of €1.734 billion, comprising €1.200 billion from the exit of Telefónica Argentina and €500 million from the exit of Peru.
Telefónica fell into losses for the first time since 2002 in the previous year, raising concerns that the company's restructuring to exit Latin American markets could extend the period of negative financial performance.
In contrast, the Spanish market remains the largest and most profitable segment for Telefónica, generating €3.170 billion in revenue and nearly €1.130 billion in net profit, representing growth of 1.7% and 1%, respectively.
Spain is the only market within the group that has shown growth, while Hispanic markets contracted by 8.6%, Germany by 2%, and Brazil by 7.2%.
The depreciation of the Brazilian real has notably impacted revenues, contributing a loss of €388 million, while a stabilizing interest rate environment in 2024 could have facilitated a potential growth of over 6% in that market.
Emilio Gayo, the CEO, emphasized that the results are in line with the group's expectations.
Looking forward, Telefónica anticipates concluding the sale of its Colombian business soon while finalizing a strategic review aimed at focusing the company on its growth in Europe.
Alongside this, Telefónica has realized a capital gain of €96 million from selling its stake in the data centers company NABIAX.
The exit from the three mentioned Latin American markets has generated approximately €1.5 billion in cash for Telefónica.
Additionally, the company has shown signs of resilience in key markets, particularly in its enterprise business, which grew by 5.4%.
At the close of the quarter, Telefónica reported a debt of €27.049 billion and reiterated its guidance of revenue and EBITDA growth for the upcoming periods.
The company allocated €938 million towards infrastructure investments, reflecting a 6.7% decrease as it enters a phase described by its president as characterized by "iron financial discipline."
In the Spanish market, Telefónica continues to improve its performance, adding 66,000 new subscriptions in television, marking the best quarter in six years.
This achievement coincides with managerial changes at Movistar Plus+.
The company has also experienced a 5% increase in access due to its partnership in Fiberpass with Vodafone and a 40% increase in Internet of Things (IoT) connections.
Moreover, Telefónica maintains its pricing strategy, with an average revenue per user (ARPU) of €92.3, while over half of its customer base currently subscribes to its 1 Gbps fiber offerings, which carry an additional fee.
Translation:
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