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Telefónica’s Revenue Growth Gathered Pace In The First Quarter To 15,511 Million Euros

Stocks in this article: TEF

The customer base totalled 309 million accesses while mobile net adds grew by 4.3 million accesses in the first quarter, 1.5 times those of the same period a year earlier,

“Our earnings for the first three months of 2012 reflect the strategic priorities set for the full year and the success of the company's shift in commercial strategy, which began in the second half of 2011," said Telefónica Chairman César Alierta. “These results are in line with internal estimates and thus allow us to reiterate our financial and operational guidance announced for 2012."

  • Thanks to the company’s revamped commercial strategy, year-on-year growth in the customer base kept gathering pace for the fourth straight quarter, rising by +6.5% through March. At the same time, year-on-year growth in consolidated revenues improved significantly, an increase of +0.5% in the first quarter (vs. -1.8% in the fourth quarter of 2011).
  • The Group’s heavily diversified business cemented its role as the Company's No. 1 strength. Latin America accounted for 48% of consolidated revenues and more than 50% of Group OIBDA, driving growth with a revenue increase of +8.3% in the first quarter.
  • Telefónica lead the adoption of mobile broadband services resulting in a steady increase in wireless data revenues, which rose by +15.4% year-on-year.
  • During a quarter notable for the Group’s major commercial drive, OIBDA totalled 5,081 million euros, while operating income was 2,511 million euros. Meanwhile, consolidated net profit for the quarter stood at 748 million euros and was impacted primarily by Telco’s writedown. In underlying terms, net profit amounted to 1,284 million euros.
  • Telefónica devoted 11% of its revenues to investment, particularly in the areas of business growth and transformation, including selective deployment of high speed broadband in key markets. Between January and March the Company invested 1,712 million euros, an increase of +10.3%, bolstering its investor commitment in both Latin America and Europe. Despite this, the Group’s operating cash flow stood at 3,374 million euros in the first quarter of 2012.
  • From a financial standpoint, and despite market volatility, by the end of the first quarter the Company had already refinanced all of its 2012 maturities and over 40% of those for 2013.

Telefónica’s (NYSE:TEF)(LSE:TDE) first quarter 2012 earnings underscore the benefits of the Group's highly diversified business and the reinvigorated commercial drive initiated in the second half of 2011. Telefónica's revenues –whose growth is one of the Company's key priorities for 2012– significantly improved the pace of their quarter-on-quarter growth (up +0.5% year-on-year vs. a drop of -1.8% in the fourth quarter of 2011) to 15,511 million euros. This performance is the result of a hefty increase in accesses, which likewise stepped up their pace of growth (up +6.5% year-on-year), boosting their customer base to 309 million accesses by the end of March.

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