Finance
Spain's Telefonica expects higher growth, lower leverage in 2026
Published by Global Banking & Finance Review®
Posted on February 24, 2026
2 min readLast updated: February 24, 2026
Tags:telecommunications
Quick Summary
Telefonica said Q4 adjusted EBITDA rose 2.8% to €3.2bn, driven by Spain and Brazil, helping meet annual targets. Full-year net loss reached €4.15bn due to disposals, a Spain redundancy plan and a UK impairment.
By David Latona
MADRID, Feb 24 (Reuters) - Spanish telecoms giant Telefonica said on Tuesday it expects its adjusted core profit to grow between 1.5% and 2.5% in 2026, with a similar increase in revenues, as it works to further reduce leverage under its new strategy.
Shares in Telefonica were up 2.6% at the market open after it reported that its core profit growth picked up pace in the fourth quarter, helping the company meet its annual targets thanks to strong performances in its core markets of Brazil and Spain.
Telefonica confirmed it would pay out a cash dividend of 0.15 euros per share for this year in June 2027. Last November, the company announced it would halve this year's dividends to reduce its net debt to annual core earnings ratio, which it targets at around 2.5 times by 2028.
It added that the capital spending to revenue ratio this year would fall to around 12% from 12.4% in 2025.
Adjusted earnings before interest, taxes, depreciation and amortisation in constant terms rose 2.8% in the fourth quarter to 3.2 billion euros ($3.8 billion) from the same period a year earlier.
Its Spanish unit saw all key metrics for the full year improve simultaneously for the first time since 2008. Meanwhile, in Brazil it posted revenue growth of 7.1% and adjusted core profit gains of 8.2% in local currency.
However, the company reported a full-year net loss of 4.3 billion euros due to one-off items, including the disposal of units in Latin America and a voluntary redundancy programme in Spain.
Those impairments led the company to its worst balance sheet since 2002, when it recorded a 5.6 billion euro loss following provisions on European 3G licence investments.
CEO Marc Murtra said the company made "difficult but necessary decisions" to strengthen its position while expressing optimism about future consolidation opportunities in Europe.
Revenues reached 35.1 billion euros, up 1.5% on a constant currency basis though down 15% in reported terms from 2024 due to its Latin American divestitures.
($1 = 0.8492 euros)
(Reporting by David Latona; Editing by Himani Sarkar, Louise Heavens and Hugh Lawson)
Key Takeaways
- •Adjusted EBITDA from continuing operations rose 2.8% to €3.2bn in Q4.
- •Strong performance in Spain and Brazil helped the company meet annual targets.
- •Despite operating gains, Telefonica reported a €4.15bn full-year net loss.
- •Losses were driven by one-offs: Latin America disposals, Spain redundancies, and a UK impairment.
- •Article dateline: Madrid; reporting by David Latona, editing by Himani Sarkar.
Frequently Asked Questions about Spain's Telefonica expects higher growth, lower leverage in 2026
1What is the main topic?
Telefonica’s fourth-quarter performance, highlighting a 2.8% rise in adjusted EBITDA to €3.2bn, strong results in Spain and Brazil, and the company meeting its annual targets.
2Why did Telefonica post a net loss for the year?
The €4.15bn full-year net loss stemmed from one-off items including the disposal of Latin American units, a voluntary redundancy program in Spain, and an impairment in the UK.
3What metrics indicate Q4 improvement?
Adjusted EBITDA from continuing operations increased 2.8% year over year to €3.2bn, reflecting stronger operating performance in the company’s core markets of Spain and Brazil.
