Telefonica posted a 7.4% rise in net profit in the first quarter of 2018 to 837 million euros from a year earlier. The figure beat FactSet’s analysts consensus for net profit of 800 million euros.
But revenues fell 7.2% to 12.19 billion euros, the third consecutive quarter of declines on a year-on-year comparison, as currency pressures offset improvements in the group’s home market, It has been hiking tariffs in Spain after hefty investments in high-speed networks.
In its results statement, Telefónica flagged that the trend in exchange rates in January-March had “a negative impact on our accounts, particularly the depreciation of the Brazilian real and the Argentine peso against the euro.”
Year-on-year revenue growth in the first quarter of 2018 was shaved 8.6% due to this currency effect, the group said.
OIBDA (operating profit before depreciations and amortisations) fell 3.9% in the first quarter to 3.864 billion euros from a year earlier, also hit by the negative currency impact.
On the upside, Telefónica highlighted a 1.1% increase in its margin and “a positive contribution from all segments, excluding regulation.”
Net debt fell 0.5% to 43.975 billion euros in the first quarter from 44.23 billion at end-2017, and dropping 9.8% year-on-year.
“This is the first time in four years that debt has fallen in the first quarter,” the Spanish telecos giant said.
Telefónica chairman, José María Álvarez-Pallete, flagged that during the first quarter “we have progressed with our strategic priorities for 2018.”
“Revenues, OIBDA and operating cash flow are growing organically and debt will continue to fall. The first quarter results are in line with our expectations and allow us to reiterate our full-year targets,” Álvarez-Pallete said.