Telefonica upgrades full year revenue guidance on back of solid first half performance

30 Jul 2015

Spanish telecoms giant Telefonica has revealed that its net profit in the first six months of 2015 was more than double the profit it reported for the corresponding period of the previous year, while increased revenues in the period have prompted to it upgrade its full-year forecasts.

Publishing its financial results for the three- and six-month periods ended 30 June 2015, Telefonica reported a consolidated turnover of EUR11.876 billion (USD13.1 billion) in Q2 2015, representing a 4.4% year-on-year increase in organic terms (or up 12.4% in reported terms). Revenues for the January to June period meanwhile totalled EUR23.419 billion, up 3.9% in organic terms (+12.5% reported). Notably, the group highlighted the fact that between them its domestic, Brazilian and German units accounted for 66% of turnover during the first half of 2015, while its Telefonica Hispanomerica unit represented 30% of the total.

Operating income before depreciation and amortization (OIBDA) meanwhile was said to have been boosted by the increased revenues, synergies, and a program for simplification and efficiencies. To that end, in the second quarter of 2015 Telefonica recorded OIBDA of EUR3.702 billion, up 6.8% y-o-y in reported terms (+3.3% organic), while in the first half of the year OIBDA totalled EUR7.320 billion (up 2.9% organic, 7.2% reported). Consolidated net income in 2Q15 was EUR1.891 billion, up from EUR1.110 billion a year earlier, while it was EUR3.693 billion in the first half of 2015, compared with EUR1.798 billion in H1 2014. Capital expenditures in the six months under review stood at EUR5.094 billion, up 12.6% year-on-year (organic), with this figure including the EUR1.589 million that the group spent on spectrum acquisitions.

In operational terms, at the end of June 2015 Telefonica boasted 324.9 million total accesses, of which the lion’s share – 253.598 million – were mobile, up 12% (reported) against the same date a year earlier. 4G accesses continued to climb, with the company confirming that the number of customers accessing an LTE-based service had risen to 18.571 million, a more than four-fold increase against end-June 2014. Such figures, it noted, meant that 4G subscribers now represent 7.6% of its total mobile base, up from just 1.8% at mid-2014. Retail broadband accesses, meanwhile, reached 20.755 million at June 2015, a 2% organic increase over the year, while of that total 5.444 million were fibre-based connections. Pay-TV subscribers numbered 8.030 million, almost double the 4.192 million reported for end-June 2014.

On the back of the company’s first half performance, Telefonica’s executive chairman Cesar Alierta was cited as saying: ‘The strength of the evolution of the business in the first half of the year, coupled with our positioning in order to capture growth opportunities in the coming quarters, have led us to revise our objectives upwards for 2015.’ As such, the Spanish outfit has upgraded revenue guidance for 2015, from more than 7% to more than 9.5%.

Spain, Telefonica