The company increased its turnover by 2.4% in the first nine months, with a 30% increase in Tech income
Telefónica recorded a net profit of 502 million euros in the third quarter of the year, 9.3% more year-on-year. In the accumulated until September it earned 1,262 million euros, 15% less compared to the 1,486 million euros it obtained in the first nine months of 2022, according to the results presented to the National Securities Market Commission (CNMV).
Between July and September the operator earned 10,321 million euros, 0.21% below the 10,343 million euros it billed in the third quarter of the previous year, while in the accumulated annual figure the business figure stood at 30,499 million euros, 2.4% more than the 29,793 million euros of the same period last year.
The company has blamed the decline in revenue in the third quarter in relation to the second – when it grew by 0.9% – “to the effect of Argentina”, where billing was reduced by 293 million euros until September, if has well indicated that this effect has been “partially” offset by a lower negative impact of the exchange rate.
However, the operator has highlighted the performance of the subsidiary Telefónica Tech, which reported revenues of 442 million euros in the third quarter (14.4% year-on-year) and 1,327 million euros in the accumulated year-on-year (30%).
“Telefónica Infra, for its part, continued to consolidate its attractive portfolio of assets. At the end of the third quarter, the company had a total of 20 million real estate units passed with fiber to the home (FTTH), thus strengthening Telefónica’s infrastructure” , the company has stressed.
Meanwhile, the operating result before amortizations (Oibda) between July and September stood at 3,330 million euros, 2.5% more in year-on-year terms, while in the accumulated figure for the first nine months of the year it stood at 9,595 (0.02%).
On the other hand, Telefónica’s net debt was reduced by 942 million euros in the third quarter of the year and stood at 26,537 million as of September 30.
The company has indicated that the reduction in debt is mainly due to the “positive free cash flow generation” of 1,130 million euros, the temporary effect of the issuance of repurchase of hybrid bonds (362 million euros) and “other factors”, whose impact the company estimates at 15 million euros.
“The factors that increase the net debt are shareholder remuneration (258 million euros, including the payment of coupons of capital instruments), commitments of labor origin (220 million euros) and net financial investments (87 million euros)”, he detailed.
“After the solid performance recorded in the third quarter, the company confirms both its forecasts for the year as a whole, revised upwards last July, and its commitment to shareholder remuneration for 2023,” the company highlighted.
MARKETS
By markets, the revenues of the Brazilian subsidiary were the ones that grew the most in the accumulated until September, with 7,112 million euros (9.3%), while those of Telefónica Deutschland increased by 4.8% in the period, until 6,323 million euros.
Meanwhile, Telefónica Spain had a turnover of 9,334 million (0.5% year-on-year), which accounted for 30.6% of the company’s total income in the first nine months of the year, while Telefónica Hispam’s turnover reduced by 4.4% compared to the same period in 2022, up to 6,727 million euros.
On the other hand, if the 50% that corresponds to Telefónica in Virgin Media O2 is included, the operator’s income until September increases to 35,048 million euros and those for the third quarter to 11,885 million euros.
In terms of Oibda, in the accumulated of the year it increased by 11% in Brazil (up to 3,000 million euros), while in Germany the increase was 2.9% (1,949 million euros).
In Spain, the accumulated Oibda stood at 3,367 million euros (-1.1% year-on-year), while that of Telefónica Hispam was 1,198 million euros, 24.9% less compared to the same period of the previous year.
Likewise, if 50% of Virgin Media O2 is added, Telefónica’s Oibda increases to 11,198 million euros until September and to 3,875 million euros in the third quarter.
FREE CASH GENERATION
On the other hand, Telefónica’s operating cash increased by 9.3% in the third quarter, while the investment to income ratio, part of the company’s ‘guidance’, stood at 13.4%, “in line with what is expected for the whole year,” the company highlighted.
“Free cash generation continued its sequential improvement throughout the year and reached 1,130 million euros in the quarter and a total of 2,426 million in the accumulated year,” he added.
NETWORK DEPLOYMENT
In terms of ultra-fast broadband, Telefónica closed the third quarter of the year with a total of 171.2 million real estate units passed, of which a total of 70.3 million correspond to FTTH, 13% more in year-on-year terms.
As of September 30, 5G coverage reached 87% of the population in Spain, 92% in Germany, 42% in Brazil and 49% in the United Kingdom.
Likewise, Telefónica’s customer base grew by 0.3%, to 384.8 million accesses, with increases in high added value segments of 14%, in the case of FTTH accesses, and 3% in contract mobile.
