By Inti Landauro
MADRID (Reuters) -Spain’s Telefonica swung to a net loss of 51 million euros ($59 million) in the second quarter due to adverse currency moves and impairments on assets sold in Latin America.
The telecoms giant’s net loss compared with a 417-million-euro net profit in the same period a year ago.
Overall revenue fell 3.7% to 8.95 billion euros, mainly due to the depreciation of the Brazilian real against the euro.
Analysts had expected a net profit of 104 million euros and overall revenue of 8.92 billion euros, according to a company-provided consensus.
“The results of the quarter are in line with internal expectations,” CEO Marc Murtra said in a statement, reiterating the company’s targets and dividend payouts for the year.
“We keep showing a solid behaviour, which demonstrates resilience and consistency despite different dynamics in the markets we operate in amid an uncertain economic context.”
Telefonica’s profit from operations fell sharply despite its efforts to increase efficiency through technology and raise prices in markets such as Spain and Brazil.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 4.8% year-on-year to 2.92 billion euros, in line with analyst expectations. EBITDA rose in Spain and Brazil, but fell in Germany and Spanish-speaking America.
The company booked a 206-million-euro impairment on the value of the Peruvian unit it sold earlier this year.
Telefonica sold units in Argentina and Peru for $1.25 billion and 900,000 euros, respectively. It had already booked accounting losses on these sales worth 1.7 billion euros in the first quarter and it had written 314 million euros off the value of the Peruvian unit in the third quarter of 2024.
The company has also exited Colombia.
Murtra has said he wants to reduce the company’s exposure to Spanish-speaking Latin America and focus on its four main markets: Spain, UK, Germany and Brazil. He declined to give details about possible asset sales in Mexico and Chile or whether further write-offs might be necessary.
($1 = 0.8654 euros)
(Reporting by Inti Landauro. Editing by David Latona and Mark Potter)
