Telefonica has presented on Thursday its first half results. These have highlighted the new contribution from its O2 UK subsidiary, which returns to the multinational’s permiter after five quarters on the outside. Revenues in the UK during H1’16 reached 3,464 million euros against 25,235 in the consolidated group. Meanwhile, Telefonica’s frustrated attempt to sell its UK unit O2 to Hutchison is beginning to have consequences.
Telefonica’s leadership changes have favoured the company’s stock price. On Wednesday, for the second day in a row, the share price outperformed the Ibex, closing just over the 10 euros level.
If Telefonica approves the choice of current CEO José María Álvarez-Pallete to replace Cesar Alierta as Chairman, he will be the first Executive Chairman not to be appointed by the Spanish government. Alvarez-Pallete will face two main challenges: securing European Commission approval for the sale of O2 and dealing with the weakness of the LatAm economies, particularly Brazil.
Telefónica’s Board of Directors will consider the appointment of José María Álvarez-Pallete as the company’s new Executive Chairman at its next meeting on April 8th. The proposal has been made by current Chief Executive César Alierta, who believes Álvarez-Pallete is the best prepared executive to face the challenges of the digital revolution.
The sale of Telefonica’s O2 to Hong Kong telecoms giant Hutchison remains up in the air. And the European Commission (EC), which has the final responsibility for the outcome of the transaction, is still being a dog in a manger, under pressure from the UK authorities.
French telecoms operator Orange got the green light from the regulatory authorities to sell its 50% stake in Everything Everywhere (EE) to British Telecom (BT). But it seems UK regulator Ofcom is now prepared to use all the means at its disposal to block the merger between Three and O2 UK (Hutchison-Telefonica).
It has been 1 year since Telefonica closed a deal to merge O2 (Movistar) with Three, the UK subsidiary of Hong Kong-based Hutchison Whampoa. And the two protagonists are still waiting for the UK and EU regulatory authorities to give the operation the green light.
MADRID | May 19, 2015 | By Fernando G. Urbaneja | Telefonica’s first quarter results show a company which has reorganised over the last year, consolidating positions in its core markets of Europe and Latin America, where three benchmark countries Spain, Brazil and Germany account for two thirds of group income. It has a somewhat uneven presence in another 8 American countries, ranging from Mexico (4% of the business, without being market leader) to Argentina (9% of the business and market leadership).
The Corner | May 14, 2015 | Europe’s second-largest phone company reported a Q1 net profit of €1.8 billion ($2.04 billion), versus a year-ago profit of €688 million. EPS climbed to 0.38 euro from 0.14 euro, while EPS from continuing operations slipped to 0.09 euro from 0.12 euro.