Telefonica’s third-quarter net profit surges after Vivo deal

11 Nov 2010

Spanish telecoms giant Telefonica’s net profit in the three months ended 30 September 2010 more than doubled against the same period a year earlier on the back of gains related to its purchase of Portugal Telecom’s 50% stake in Vivo Participacoes, Brazil’s largest mobile operator by subscribers. In its third fiscal quarter of 2010 Telefonica posted a net income of EUR5.06 billion (USD6.96 billion), up from EUR1.88 billion in the same period in 2009; despite the dramatic increase the company fell short of analyst expectations, having been forecast to report profits of around EUR5.45 billion. Group turnover meanwhile increased 7.3% year-on-year to EUR15.23 billion, with revenues from Telefonica’s European operations excluding its domestic unit rising by 13.7% to EUR3.96 billion, and its Latin American subsidiaries reporting sales of EUR6.37 billion, up 11.7% against 3Q09. In Spain, however, the group’s revenues fell by 3.6% to EUR4.73 billion, with Telefonica claiming that domestic results had been ‘mainly impacted by the trading environment’. Group operating income before depreciation and amortisation (OIBDA) surged by 65.3% to EUR9.46 billion.

In operational terms, at the end of September 2010 Telefonica reported it had 281.81 million total client accesses, including wholesale connections. Of those, mobile subscribers continued to account for the bulk of customers, 214.85 million at that date, up 4.4% y-o-y. Broadband customer numbers climbed 26.5% against end-September 2009, with Telefonica reporting 16.71 million such subscribers a year later, while fixed telephony accesses (which the company said includes VoIP and naked ADSL connections) rose to 41.47 million, up from 41.45 million.

Spain, Telefonica