Spanish telephone company Telefonica said today that its net profit last year plunged 27.3% to €3.9 billion.

The company's profits were driven lower by a series of write-offs.

This was despite the fact that its Latin American business flourished and overtook recession-hit Europe for the first time in terms of revenue.

Telefonica, which owns O2 Ireland, said that "extraordinary impacts" wiped €2.5 billion off its profit margin.

Those impacts included the adjustment of the value of stakes in its Irish and Italian operations and the consequences of Venezuela's currency devaluation.

Telefonica's total revenue last year fell by 0.8%, to €62.4 billion.

Overall, the company blamed the drop on difficult conditions in some markets, both economic and those resulting from tougher competition, as well as negative consequences from market regulation.

In Latin America, which provided more than half the company's revenue in the fourth quarter, revenue grew 6.7% over 2012.

Operations in Europe, where the region's financial crisis has shrunk customer spending, accounted for 48% of total revenue.

However, the company said Telefonica Europe recovered some momentum towards the end of last year with the launch of new tariffs, especially in Spain.

The company reported healthy growth in mobile data revenue, which was up 12.8% on 2011, and said it reduced its financial debt by more than €5 billion to €51.3 billion.