Telefonica highlights organic revenue growth in 3Q14

12 Nov 2014

Driven by a solid performance from its Latin American units, Spain’s Telefonica recorded a 2.8% year-on-year increase in turnover on an organic basis in the three months ended 30 September 2014. While group revenue was down 7.4% on a reported basis at EUR13.021 billion (USD17.4 billion), the company was keen to highlight the fact that organic growth had been bolstered by its Telefonica Hispanoamerica division, which reported 13.4% y-o-y organic revenue growth in the period under review, while it also pointed to mobile data and digital services as growth areas. Further, Telefonica noted that, excluding the negative impact of regulation, total turnover was up 3.6% against 3Q 2013. Operating income before depreciation and amortisation (OIBDA), meanwhile, totalled EUR4.269 billion, representing a 0.8% increase against the corresponding period of 2013 on an organic basis, with this accelerating in 3Q14 ‘driven by better sales momentum and despite the higher commercial efforts’. Again, Telefonica Hispanoamerica was cited as a particularly strong performer, with that unit recording organic OIBDA growth of 15.1% in the quarter under review. Consolidated net income in 3Q 2014 totalled EUR947 million, down 13% year-on-year.

In operational terms at the end of September 2014 Telefonica had 316.1 million total accesses on its books, up 2% year-on-year in organic terms (excluding the accesses of Telefonica Czech Republic and Telefonica Ireland from the basis of 2013, following their respective disposals in January 2014 and July 2014). With the overall increase said to have been ‘driven by the sustained growth of higher value and quality segments such as mobile contract (smartphones and LTE), fibre and pay TV’, mobile accesses accounted for the lion’s share of the total, standing at 249.417 million, and though this was down from 252.188 million at end-September 2013, Telefonica said it represented 2% annual growth on an organic basis. With post-paid subscribers said to be growing at a faster pace, such subscribers now account for 36% of the group’s total mobile accesses, up from 35% at the end of 3Q13. Meanwhile, retail fixed broadband accesses totalled 17.7 million at end-September 2014 (up 1% year-on-year in organic terms), with fibre accesses accounting for 1.4 million of those, more than double those reported a year earlier, after the group saw record net additions in the third quarter of 2014 of 265,000.

Commenting on the group’s performance, executive chairman Cesar Alierta said: ‘In the third quarter of 2014, Telefonica’s transformation process made significant progress with the closing of the consolidation deal in Germany and the acquisition of GVT in Brazil (still subject to regulatory approvals). These transactions imply structural changes in the company’s competitive position in two key markets and strengthen, in both cases, our future growth potential. In parallel, our quarterly results showed an overall improvement in both operating and financial growth rates.’

Spain, Telefonica