Telefonica posts first net loss since 2002

11 Nov 2011

Telefonica has posted a net loss for the third quarter of EUR429 million (USD584 million) after incurring charges of EUR2.6 billion in expenses related to cutting jobs along with declining sales in the company’s home market. The result is the Spanish giant’s first net loss since the fourth quarter of 2002. Domestically, third-quarter sales in Spain slumped 8.8% year-on-year amid difficult economic conditions in the country – unemployment is currently running at 22.6% and GDP growth at just 0.2% – coupled with customers switching to lower-cost offerings of rival operators. Overall revenues for the period were up 3.4% as sales from the region grew strongly by 18% year-on-year. For the full year of 2011, Telefonica forecasts that group revenues will grow by ‘up to 2%’, while EBITDA margin is expected to be in the ‘upper 30s’, down from 42.4% recorded in 2010.

At the end of September, Telefonica claimed 294.5 million retail subscribers, of which 231.9 million were mobile subscribers, 40.4 million were fixed line accesses, 19 million were internet and data accesses, and 3.2 million were pay-TV subscribers.

Spain, Telefonica