Telefonica confirms 2026 guidance as first-quarter results meet expectations
Telefonica’s First-Quarter 2024 Financial Performance Overview
MADRID, May 14 (Reuters) - Spain's Telefonica said it was on track to meet its 2026 targets after first-quarter results came in broadly in line with expectations on Thursday despite a net loss due to the impact of the sale of Latin American units.
Revenue and Earnings Guidance
The group is targeting full-year constant revenue growth of 1.5% to 2.5%, with the same increase expected for adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA).
Revenue Growth Details
Revenue rose 0.8% in constant-currency terms to 8.13 billion euros ($9.52 billion) in the January-March period, as service revenue growth of 1.1% offset a 2.4% decline in handset sales.
Adjusted EBITDA Performance
Adjusted EBITDA increased by 1.8% in constant terms to 2.84 billion euros, while the adjusted EBITDA margin widened by 0.3 percentage points to 34.9%.
Net Loss and Impact of Latin American Divestments
The company reported a quarterly net loss of 411 million euros, compared with a 1.3 billion euro loss a year earlier, as the sale of its Chilean, Colombian and Mexican units weighed on earnings. Last year's loss reflected writedowns on assets sold in Peru and Argentina.
Adjusted Net Profit from Continuing Operations
Excluding the impact of Latin American disposals, adjusted net profit from continuing operations reached 482 million euros, down 21.5% from 614 million euros a year earlier on a like-for-like basis.
Financial Position and Dividends
Net financial debt fell by 1.5 billion euros from end-December to 25.34 billion euros, helped by divestments including the sales of the Colombia and Chile businesses. Telefonica said leverage declined to 2.72 times and confirmed its 0.15 euro-per-share cash dividend for 2026.
Regional Performance
Brazil as Growth Engine
By market, Brazil remained the main growth engine, with revenue up 7.4% and adjusted EBITDA up 8.7%.
Germany’s Performance
Revenue and EBITDA Decline
Germany, on the other hand, suffered with revenue down 8.6% and adjusted EBITDA falling 8.4%, reflecting handset weakness and the migration of 1&1 customers.
($1 = 0.8537 euros)
(Reporting by David Latona; Editing by Joe Bavier)
