Telefónica’s Latin American earnings surpassed its earnings from Europe for the first time in the Spanish group’s history. The telecom operator announced first quarter 2012 earnings of 15,511 million euros, while operating income before depreciation and amortization (Oibda) dropped 8.8% to 5.08 billion euros ($6.6 billion).
The carrier highlighted that revenue growth is one of the company’s key priorities for this year. First quarter revenues were up 0.5% year-over-year versus a 1.8% decrease in the fourth quarter of 2011.
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Latin America as a region and wireless data as a business cemented their roles as the main drivers of the group’s growth, with year-over-year revenue growth of 8.3% and 15.4%, respectively. The region now accounts for more than 50% of consolidated OIBDA.
Net profit was negatively affected primarily by Telco’s writedown of its stake in Telecom Italia. In underlying terms, its net profit amounted to 1,284 million euros.
Bloomberg, an analyst at Banco de Sabadell, said that “results were very weak and the performance in Europe was very poor this quarter, especially in the U.K., while Spain continues its decline and Latin America provides positive growth overall”.
During this period, Telefónica achieved a customer base of 309 million accesses by the end of March – 205 million are for Latim operations.
Telefónica Chairman Cesar Alierta noted the repositioning of tariffs designed to make carrier more competitive and the penetration of mobile broadband services to minimize churn has led to strong commercial momentum since the beginning of the year. This will materialize in increased top line growth as the year goes on, he said.
Alierta said the first-quarter earnings were in line with internal estimates.
