Telefónica reports record net income
November 4, 2021
Telefónica, the Spanish telco, has reproted a record net income of €9.33 billion in the first nine months of the year, as a result of capital gains from the closing of the merger between O2 and Virgin Media in the UK and the sale of Telxius towers.
Net income from July to September amounted to €706 million. Additionally, the results for the quarter show organic growth in revenues and operating income before depreciation and amortisation (OIBDA) and a successful capital management, prioritizing investment in the most relevant markets and businesses for the company, with a focus on long-term growth and profitability.
Thanks to the results achieved in the first nine months of the year, the company confirms the financial targets set for the year, i.e. revenue and OIBDA to move between stable and slight organic growth, and CapEx to Sales back to a normalised level of up to 15 per cent.
Nearly two years after it was presented, Telefónica says it strategic plan continues to bear fruit. In addition to moving towards a more sustainable operating model the Group has also made progress in the development of fibre vehicles in several countries through Telefónica Infra; in the growth story of Telefónica Tech with acquisitions such as Cancom UK&I, in the UK, and with revenues increasing by 25.5 per cent in the first nine months of 2021, to €598 million; and in achieving a more favourable and efficient operational and financial exposure in Hispam, following the closing of the sale of Costa Rica and the agreement for the sale of the business in El Salvador.
José María Álvarez-Pallete, Chairman and CEO of Telefónica, commented: “Telefonica performed strongly in Q3. We maintained the momentum of y-o-y organic revenue and OIBDA growth for the second consecutive quarter, with accelerating service and B2B revenue growth”. He also explained: “These results reflect a further significant step towards the economic and social recovery of the markets in which we operate as the world continues to emerge from the worst effects of the pandemic. I am proud of Telefonica’s role in helping society to thrive and to build a greener future through digitisation.”
Between July and September, and for the second consecutive quarter, both revenues and OIBDA grew by 3.6 per cent and 1.6 per cent, respectively, in organic terms, while in the first nine months of the year both figures grew by 1.7 per cent. Both variables are on track to meet the targets set for 2021.
In reported terms, revenues amounted to €9,298 million in the quarter, down 11.1 per cent, and to €29.6 billion in the first nine months, down 8 per cent, mainly as a result of changes in the company’s perimeter. The weight of revenues associated with broadband connectivity, together with services over connectivity, increased by 3.8 percentage points in the last year, to 71 per cent of total service revenues.