Spanish telecom group Telefónica saw its 2012 net profits fall by 27.3% to $5.14 billion, while its debt dropped by almost $6.5 billion on a quarterly basis to $67.1 billion after a variety of asset sales.
Today the company released its quarterly and year-end financial results. It noted that its Latin American operations consolidated its position as the region contributing the most to the group’s revenue (more than 50% in the fourth quarter), which, according to Telefónica, demonstrates the value of the company’s high degree of diversification. “This is key to guarantee sustainable levels of differential growth in the future,” the company said in a statement.
Ovum telecom analyst Emeka Obiodu noted the performance of Latin America finally vindicates the group’s push into the region. “It has not always looked wise as Telefonica’s higher debt burden (compared to its peers), amassed partly in trying to build the Latin American footprint, began to threaten the viability of the group. Its profits, this time, have also been impacted by a [$3.2 billion] write-down in Venezuela, confirming the continued existence of political and financial risks from the region. The write-down and other issues in Ireland and Italy were largely responsible for the massive 82% decline in profits in the year,” Obiodu said in a note.
With regard to operations, Telefónica ended the year with a customer base that grew by 3% to 316 million accesses and noted the recovery of commercial momentum in Europe. Mobile customers totaled 247 million accesses at the end of 2012, which was a 4% increase, with growth rates of 7% in the contract segment.
At the end of December, Telefónica had 52.8 million mobile broadband customers, 38% more than during the previous period, and had 18.6 million retail fixed broadband accesses, a rise of 3%.
