Spain's Telefonica profit hit by currencies and asset sales

Friday 09 May 2014 19.03
Telefonia's Q1 sales dropped 13.5% to €12.232 billion
Telefonia's Q1 sales dropped 13.5% to €12.232 billion

Spain's Telefonica said today that its first-quarter net profit fell 23.2% to €692m as it was hit by weaker currencies in Latin America and the sale of its Czech business last year. 

Europe's biggest telecoms company by revenue said its sales dropped 13.5% to €12.232 billion while operating income fell 14% to €3.929 billion. 

All three reported figures missed Reuters forecasts. 

Telefonica said its underlying business remained solid and its earnings would soon benefit from recent investments in building up better networks and offering better products. 

European Union competition regulators will decide by June 20 whether to clear Hutchison Whampoa's $1 billion offer for Telefonica's O2 Ireland mobile phone business after receiving further details about the Hong Kong-based group's concessions.

The firm is also trying to win approval from European competition authorities for the acquisition of E-Plus in Germany and in Brazil, the competition regulator has been seeking to loosen its grip on the country's telecoms market.

Earlier this week, it has also agreed to buy the pay-TV business of Spain's Prisa in a move that would enable the company to offer more attractive bundled packages combining fixed and mobile telephone, high-speed internet and television in its domestic market.

Telefonica, which has spent the last two years shedding assets and reorganising its business in a drive to cut debt and recover financial strength, said net debt was €42.72 billion, already meeting a year-end target of below €43 billion.