Telefónica enters losses in 2023 because of the restructuring within the United Kingdom and the price of the ERE | Companies | EUROtoday

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Telefonica Pallete
The president of Telefónica, José María Álvarez-Pallete.Marta Fernandez Jara (Europa Press)

In 2023, Telefónica recorded its first annual losses since 2002 because of a number of extraordinary results. The operator confirmed a damaging steadiness of 892 million euros in 2023, because of the affect of the write-down of three,107 million kilos (about 3,600 million euros) within the British subsidiary Virgin Media O2 (VMO2), and the availability of 1,300 million of euros derived from the employment regulation file (ERE) in Spain, for 3,400 individuals who, for probably the most half, will depart the corporate within the coming days. The affect for Telefónica because of the deterioration within the United Kingdom is 1,786 million euros, given its 50% stake within the capital (the opposite 50% is owned by Liberty Global) of its subsidiary within the Islands.

In any case, if the extraordinary ones will not be taken into consideration, Telefónica's odd web revenue reached 2,369 million euros in the entire of 2023, 17.1% greater than in 2022. Telefónica shares have began the session with an increase of 0.73%, recovering the extent of three.70 euros. At mid-morning, the titles superior simply over 1.5%.

Goodwill is the power of an organization to generate income because of intangible property that may produce future income, akin to model worth, buyer base, positioning, know the way or the worth of patents. In the case of VMO2, this accounting adjustment has been established as a consequence of the deterioration of the macroeconomic state of affairs within the United Kingdom, and its affect on future money era.

These are the primary losses that Telefónica has suffered in a complete 12 months since 2002, when, firstly of César Alierta's presidency, it recorded crimson numbers of 5,576 million euros, after accounting for extraordinary impacts of 16,217 million, asset-related write-downs and restructuring bills for UMTS cell phone licenses acquired in Europe at excessive price (particularly in Germany), Terra Lycos, Pearson and Telefónica Deutschland.

The operator additionally suffered losses within the fourth quarter of 2015, 2019 and 2021, because of the provisions made to face the successive voluntary retirement plans (PSI), however all through every of those years, it recorded income.

The accounts come at a time of sturdy shock in Telefónica, with the entry into the capital of Saudi Telecom Company (STC) and its buy of 9.9% of the capital, though it has but to obtain permission from the Government to exceed the extent 5%, given the strategic nature of telecom in nationwide safety and protection; and the return of the State to the capital, as soon as the State Industrial Participations Company (SEPI) executes the mandate to amass as much as 10% of the shares, which is able to make the State the primary shareholder.

In any case, aside from extraordinary occasions, Telefónica maintains the expansion development in enterprise. The operator, which is able to have a good time its centenary this April, obtained revenues of 40,652 million euros, 1.6% greater than in 2022 and the very best quantity since 2020. In the fourth quarter, gross sales stood at 10,153 million. The telecom signifies that the enterprise enterprise (B2B) was consolidated as an essential development lever, with an natural enhance in earnings of 6.3% for the 12 months as a complete.

In flip, working revenue earlier than depreciation and amortization (oibda) rose 1.4% in 2023, to 13,121 million euros, a rise that rose 1.6% within the final quarter, to 1,795 million. “Confirming the forecasts advanced by the company, Telefónica Spain once again registered organic growth in its oibda, 0.1%, in the last quarter of 2023, something that had not happened since 2019,” the operator highlighted.

In its monetary report, Telefónica highlights that it met all of the aims on this sector established for 2023, which had been revised upwards within the second quarter. Revenue and OIBDA grew organically by 3.7% and three.1%, respectively, and investments (capex) had been restricted to 14% of gross sales. It additionally exceeded free money movement forecasts, which, with a complete of 4,227 million euros, was above the estimated 4,000 million. In the fourth quarter, it exceeded 1,562 million.

Telefónica has communicated new aims for the entire of 2024, the primary full 12 months of the GPS strategic plan, offered final November on the Capital Markets Day, consisting of income development of round 1%; between 1% and a couple of% of the working revenue earlier than depreciation, amortization, curiosity and taxes (ebitda), a magnitude that returns to the corporate's accounts; and working money (ebitdaal-capex) additionally between 1% and a couple of%.

The operator additionally contemplates an funding determine over earnings of as much as 13%, as soon as the height of funding has been surpassed after abandoning massive fiber optic deployments, and a rise in free money movement of greater than 10%. Telefónica specifies that the money development goal for this 12 months may have as a reference the two,308 million euros achieved with the brand new definition that the corporate itself will apply from this 12 months.


In relation to shareholder remuneration for 2024, the corporate has confirmed the distribution of a money dividend of 0.30 euros per share, which is able to imply a disbursement of near 1.7 billion euros, payable in two tranches, in December 2024. (0.15 euros) and in June 2025 (0.15 euros), according to what can be established within the aforementioned GPS plan. Additionally, it would amortize 1.4% of the corporate's share capital, the equal of the treasury inventory current as of June 30, 2023.

The firm has recalled that, with respect to the dividend akin to 2023, additionally of 0.30 euros per share in money, it already paid the primary tranche of 0.15 euros per share final December, and plans to pay the second, for a similar quantity, subsequent June. Telefónica has highlighted that, in 2023, money movement per share reached 0.70 euros, which comfortably covers the aforementioned dividend of 0.30 euros per share fully in money.

With all this evolution, Telefónica closed the 12 months with a web monetary debt of 27,349 million euros, 2.5% greater than on the finish of 2022, with a debt ratio of two.60 occasions. The firm has confronted vital actions this 12 months, such because the takeover of the stake that it didn’t management in its German subsidiary, with an affect of 881 million euros and after the sharp inventory market fall suffered firstly of August, as a consequence of the loss as wholesale shopper of the digital cell operator 1&1.

The teleco has defended its skill to anticipate and the prudence utilized to debt administration, which have strengthened the group's monetary place. In 2023, the corporate undertook financing efforts amounting to five,296 million euros, which permits it to take care of a “solid” liquidity place of 19,531 million. Along these traces, Telefónica has the maturities of the following three years lined, greater than 80% is at a set charge and maintains a median lifetime of the debt near 11.6 years. The common price of debt stood at 3.80% on the finish of 2023, in comparison with 3.96% on the finish of 2022.

“Telefónica continues to execute its roadmap, without stopping in the face of global macroeconomic uncertainty, with the ambition and determination necessary to complete the operational transformation process launched in 2016. In 2023, Telefónica has met all its financial objectives and faces with determination the commitments set out in our GPS strategic plan to continue building a new Telefónica and lead the new digital era,” says the president of Telefónica, José María Álvarez-Pallete.


In phrases of operations, Telefónica closed 2023 with a base of 387.8 million accesses, with fiber and cell contract accesses rising by 13% and three%, respectively.

The firm continued to actively advance the transformation of its next-generation good networks. “With the application of technologies such as artificial intelligence or machine learning“Telefónica continues to explore and implement solutions that allow it to make decisions more quickly and efficiently, which ultimately improves its competitive position, investment management and cost savings,” says the company, which adds that this process facilitated the acceleration of fiber and 5G deployments, as well as the shutdown of the copper network, scheduled for next April, coinciding with the centenary.

The telecom assures that it maintains its position as a global leader in fiber with a coverage of 173.1 million real estate units passed with ultra-fast broadband networks (+3%), of which a total of 74.3 million are fiber ( +14%). In this case, Telefónica Infra made progress in its infrastructure portfolio. Thus, around 30% of the telecom's future deployments will be executed through its multiple fiber vehicles, which at the end of December totaled 21 million real estate units passed.

Regarding 5G, coverage continued to grow to reach 87% of the population in Spain, 94% in Germany, 48% in Brazil and 51% in the United Kingdom. In addition, the company has already launched 5G+ in Spain, Germany and Brazil, and is expected to do so in the United Kingdom in the coming months.

Recovery of Spain

Telefónica has highlighted the recovery of its Spanish subsidiary during 2023 on a commercial and financial level. Oibda has stabilized in the fourth quarter, income has maintained sustained growth throughout the year and the improvement in commercial activity has been consolidated. This evolution has been supported, according to the teleco, by a “differential quality offer” that has allowed the value overview to proceed in January 2024. In the entire of 2023, enterprise quantity elevated by 1.3%, to 12,654 million euros, the very best quantity since 2019, with a 1.6% enhance in service earnings.

The enchancment has accelerated within the latter a part of the 12 months. Revenues within the fourth quarter accelerated their year-on-year development to three.3% because of the 6.5% enhance in handset gross sales (1.3% within the third quarter), and better service revenues, which grew 3.2%, 2.2 proportion factors above the third quarter. The operator has highlighted the solidity of retail revenues, with a rise of two.7%, pushed by the report sale of IT providers to corporations, and the higher industrial exercise within the residential sector.

Accesses elevated by 1%, pushed within the fourth quarter by the acceleration of pay TV, with a acquire of 8,000 traces, after the launch of the brand new Movistar Plus+ platform, open to customers of different telecoms; and because of the year-on-year development of greater than 1% in each fastened broadband and cell contracts. Fiber continued to develop between October and December, including 81,000 accesses, of which 75,000 are retail, and now represents 92% of the fastened broadband buyer base. Telefónica, which in April will proceed to show off its conventional copper community, reaches a complete of 29.3 million actual property models with its fiber infrastructure.

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