Home Telefonica beats H1 profit forecasts, net debt on target Tags Español Telefónica refuerza la seguridad de las cadenas de bloques Author Related Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight…More Read more FinancialTelefonica Luz verde a la fusión entre Telefónica y Liberty Global en el Reino Unido Telefonica bolsters blockchain security AddThis Sharing ButtonsShare to LinkedInLinkedInLinkedInShare to TwitterTwitterTwitterShare to FacebookFacebookFacebookShare to MoreAddThisMore 25 JUL 2013 Ken Wieland Previous ArticleGoogle unveils Android, Nexus 7 updatesNext ArticleOrange reports lukewarm H1 figures as tax dispute weighs Telefonica posted a better-than-expected H1 as lower financing costs helped earnings beat analyst forecasts. And even after committing to buy KPN’s E-Plus business in Germany in a deal worth around €8 billion, the Spanish giant maintained it was on target to push net debt below €47 billion by the end of 2013.Although H1 group sales fell 7.8 per cent, to €28.56 billion – largely due to falls in Europe and asset off-loading – lower taxes and financing costs meant net profit slipped just 0.9 per cent to €2.06 billion. A Reuters poll estimated a slightly lower net profit of €1.94 billion.More encouragingly, there were signs of improvement in the second quarter. Although sales dropped 6.8 per cent, to €14.4 billion, an average of estimates compiled by Bloomberg projected revenue of €14.1 billion.Second-quarter net income fell 13 per cent, to €1.15 billion, compared with analysts’ €1.1 billion average estimate.Including the disposals of 40 per cent of its business in Central America, 100 per cent in Ireland and Inversis, Telefonica’s net debt fell to €49.8 billion at the close of Q2, down €8.5 billion compared with June 2012 (and down €1.5 billion since December 2012).“Net debt level is heading in the right direction,” Paul Marsch, an analyst at Berenberg Bank in London, told Bloomberg. “Unless they have other ambitious plans they need to fund, I don’t see why they need to do any other significant disposals. Selling more assets would increase their exposure to Spain in the mix, and that would be inconsistent with what they have been doing lately.”Cesar Alierta, executive chairman, stressed in a statement the “significant progress” made in Telefónica’s on-going process of transformation during the second quarter of 2013. A programme, he said, which places the company in “a strong position both in terms of business and financial performance”.Alierta added that the results of the first six months are in line with internal estimates, allowing the operator to reaffirm annual operating and financial targets.Group-wide, mobile broadband is giving Telefonica a boost. Mobile broadband accesses stood at 63.3 million at the end of June, up 41 per cent since Q2 2012.There was a record 8.2 million net additions of smartphone users during Q2 2013 (threefold the figure in the first quarter and more than double the figure in the same period of the previous year). Smartphone penetration rate stood at 24 per cent of all Telefonica’s mobile accesses in June 2013.Mobile data revenues accounted for 36.4 per cent of mobile service revenues in the year (up 3 percentage points compared with the first half of 2012).There are still difficulties, not least in Spain where H1 sales plummeted 15.1 per cent, to €6.6 billion. However, Telefonica’s quad-play Movistar Fusion service continues to grow strongly in the country, reaching 2.2 million customers at the end of June (up from 1.5 million three months earlier).Telefónica’s revenues from Latin America amounted to €14.7 billion in the first six months of 2013, down 1.9 per cent from H1 2012.
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