Wednesday May 14, 08:40 PM
Telefónica Q1 profits up 22%
By Andrew Parker in London
Telefónica claimed it was seeing "the green shoots" of recovery at its German mobile phone business, as the Madrid based telecoms group also expressed hope it could ride out Spain's economic slowdown. Matthew Key, head of Telefónica's
European operations outside of Spain, highlighted how its German mobile business was reporting revenue growth for the first time in a year.That business, called O2 Germany, fared badly last year after mobile operators, led by T-Mobile and Vodafone (LSE: VOD.L - news) , unleashed a fierce price war in 2006. But Telefónica's first-quarter results for 2008 showed that O2 Germany generated €855m of revenue in the three months to March 31, up 1.5 per cent on the same period last year. "Germany is starting to show the first signs of recovery," Mr Key said. He also said Telefónica was planning a joint statement with Apple (NASDAQ: AAPL - news) in the coming weeks on the US computer company's long awaited iPhone using third generation mobile technology that will allow faster downloading from the wireless internet. Speculation is growing that Apple will launch a 3G iPhone on June 9. Telefónica reported group revenue of €14bn for the first quarter of 2008, up 1.1 per cent, and operating income before depreciation and amortisation of €5.4bn, up 5.3 per cent. Net income was €1.5bn, up 22.4 per cent. Much of the growth was generated by Telefónica's fixed line phone and mobile operations in Latin America. But Mark James, analyst at Collins Stewart (LSE: CLST.L - news) , who has a "buy" rating on Telefónica, predicted a "collective sigh of relief" that the Spanish economic slowdown was not having a more negative impact on the group's domestic revenue. The Spanish economy expanded by only 0.3 per cent between January and March, its slowest quarterly pace in nearly 13 years, as a tumbling housing market and the global credit crunch brought a sharp deceleration in activity. Telefónica's Spanish operations reported revenue of €5.1bn in the first quarter, up 1.9 per cent. "We believe we can outperform the economy and are doing our best to do so," said Guillermo Ansaldo, head of Telefónica's Spanish operations. Sterling's weakness against the euro hurt results at Telefónica's European operations outside Spain. At constant exchange rates, these operations reported organic revenue growth of 6.4 per cent. But sterling's weakness, and the disposal last year of Telefónica's mobile network for the UK emergency services, meant that the group's European operations outside Spain saw revenue fall by 1.7 per cent in the first quarter. Telefónica announced it was accelerating its share buy-back programme, under which it was due to purchase 100m shares by the middle of 2009. It said the programme would now be completed by the end of 2008.
Click here for more from FT.com
|
Send Article by Email
