Telefónica will increase revenue by 78% because of the higher valuation of Virgin O2 and confirms forecasts | Companies | EUROtoday

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José María Álvarez-Pallete, president of Telefónica.
José María Álvarez-Pallete, president of Telefónica.Pablo Monge

This Thursday, Telefónica offered the outcomes equivalent to the primary quarter of 2024, a interval wherein it achieved a internet revenue of 532 million euros, 78.9% increased than that registered in the identical interval of 2023, and above forecasts. From the market. The enhance is essentially motivated by extraordinary occasions, amongst which the quarterly replace of subsidiaries utilizing the fairness methodology stands out, which this quarter has been optimistic, amongst which Virgin Media O2 stands out. In 2023, revenue was penalized by restructuring prices of 15 million and different impacts of 250 million. In adjusted phrases, with out these extraordinary occasions, income between January and March of this yr would have risen 7.5%, as much as 632 million.

These are the primary outcomes reported by Telefónica after the entry into the capital of the State Society of Industrial Participations (SEPI), which has 7% and a consultant on the board of administrators, turned efficient.

In the knowledge despatched to the National Securities Market Commission (CNMV), Telefónica signifies that it has offered “solid growth rates” within the first quarter of the yr, with a rise in earnings of 0.9%, as much as 10,140 million euros, above market forecasts, pushed by service revenues, which grew by 2.3%. Of the full, 61% comes from the residential market (B2C), which grew by 0.8%; 22% comes from the enterprise section (B2B), which grew by 2.8%; and the remaining 17% corresponds to the wholesale enterprise, companions and different earnings.

The working outcome earlier than depreciation and amortization (ebitda) has strengthened the group's profitability by rising greater than double that of income within the first quarter. Specifically, it has elevated by 1.9%, as much as 3,205 million euros. With the return of ebitda, Telefónica leaves behind a few years wherein the magnitude chosen to calculate this profitability was obitda.

Revenues in Spain, its foremost market, elevated by 1%, to three,118 million euros, whereas EBITDA rose 0.2%, consolidating the return to development in profitability, which started on the finish of 2023.

The group has defined that that is the primary quarter of utility of the GPS (Growth, Profitability and Sustainability) strategic plan, introduced in November. The firm factors out that it has continued the favorable evolution of its business exercise and has registered stable development and profitability charges, in addition to progress in its sustainability technique. All of this permits the group to substantiate the monetary goals established for the yr.

In relation to the goals deliberate for 2024, the operator expects income development of round 1%, ebitda between 1% and a pair of% and working money (ebitda after leases or ebitdaaL-Capex) as nicely. between 1% and a pair of%. In addition, it contemplates an funding determine on earnings of as much as 13% and a rise in free money stream of greater than 10%.

Regarding shareholder remuneration for the yr 2024, the corporate will distribute a money dividend of 0.30 euros per share payable in two tranches, in December 2024 (0.15 euros) and in June 2025 (0. 15 euros). In June, as well as, the corporate pays the second tranche of the 2023 dividend, of 0.15 euros per share. Additionally, the remuneration to buyers is complemented by the discount of share capital, carried out in April 2024, by means of the amortization of 80.3 million treasury shares.

“We have started the year showing a solid strengthening of our business supported by the deployment of our new roadmap, the GPS strategic plan, which will guide Telefónica until 2026. Revenues improve, commercial activity improves and the quality of the service we provide improves. we provide to our clients and their satisfaction. The company is moving forward firmly in its centenary year with our principles of integrity, commitment and transparency, generating value for the shareholder,” says the president of Telefónica, José María Álvarez-Pallete.

The funding determine reached 1,056 million euros within the quarter, 2.7% extra, in order that the funding to earnings ratio stood at 10.4%, totally aligned with the target of closing 2024 as much as 13%.

Throughout the primary quarter, Telefónica has obtained long-term financing amounting to 4,008 million euros. The two inexperienced hybrid bonds launched in January and March have stood out. Financing exercise has allowed the group to keep up a stable liquidity place of 19,337 million. At the tip of March, the corporate had maturities coated for the following three years and the common lifetime of the debt was near 11.7 years.

Telefónica closed March with a complete debt of 28,482 million euros, 1,133 million greater than on the finish of 2023, and seven.7% extra in year-on-year phrases, on account of the impression of the delisting takeover bid on the German subsidiary. The efficient price of curiosity funds associated to the debt is 3.51% as of March 2024, in comparison with 3.87% in the identical month final yr.

By enterprise areas, Telefónica Tech has began the yr with “solid growth” in earnings. Telefónica's digital and technological enterprise unit has obtained revenues of 476 million euros, 11% greater than within the first quarter of 2023.

In flip, Telefónica Infra, as a worldwide connectivity platform, has closed the quarter with 22 million actual property items handed with the totally different fiber automobiles and with greater than 100,000 kilometers of worldwide connectivity through submarine cable. Telxius, the cable supervisor, has maintained its excessive profitability charges within the quarter, with an EBITDA margin of fifty.8%.

The operator has highlighted the business dynamism and buyer loyalty. In this manner, Telefónica has closed the primary quarter of the yr with a base of 388.3 million accesses, 1% extra. Fiber entry and cellular contract entry stood out for one more quarter, rising 12% and three%, respectively.

The January-March interval has stood out for excellent business exercise within the totally different markets and for reaching a really favorable diploma of buyer satisfaction, with an NPS ('Net Promoter Score') of 31 factors. This dedication to clients can also be mirrored in the truth that Spain and Brazil have recorded the perfect ranges of buyer turnover or churn charges of their historical past, since they’ve fallen to 0.9% and 0.97%, respectively.

In phrases of networks and programs, Telefónica is implementing an Artificial Intelligence program in an effort to speed up the applying of AI by growing the variety of options, from a complete of 650 use instances that presently exist. This will scale back complexity and drive automation, effectivity and buyer expertise. Precisely throughout the first quarter, the corporate launched the AI ​​Center of Excellence, current in every enterprise unit in an effort to assure privateness by design and to advertise the method of extending AI-based functions to your complete firm.

On the opposite hand, the transformation of networks, primarily based on an growing diploma of virtualization, is accelerating the deployments of fiber to the house (FTTH) and 5G, in addition to progress within the shutdown of the copper community in Spain. Telefónica, which maintains its place as a worldwide fiber chief, had 175 million actual property items related with ultra-fast networks on the finish of March, of which a complete of 76.6 million are FTTH, together with these from the totally different fiber automobiles .

Regarding 5G, Telefónica's networks cowl 63% of the inhabitants of its foremost markets: 89% of the Spanish inhabitants, 95% of the German inhabitants, 48% of the Brazilian inhabitants and 53% of the British inhabitants.

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