Telefónica’s sales exceed 10,000 million euros and exceed all expectations

Telefónica invoiced €10,045 million in the first quarter of this year, up 6.7% over the same period a year earlier, the company reported today to the National Commission on the Stock Market (CNMV).

In this way, the company headed by José María Álvarez-Palet has placed its quarterly turnover above market expectations, which estimated revenue for the period between 9,700 and 9,800 million euros.

On the other hand, Telefónica’s net profit was €298 million (-57.9% YoY). In this sense, there are three factors (not related to business and commercial activity) that explain the decline in net profit, as indicated by the company.

On the other hand, in the first quarter of 2022, a capital gain of 200 million was recorded from the sale of 60% of its fiber subsidiary in Colombia to KKR, while “financial factors” also had an impact, such as a commissioning update equivalent to Virgin Media O2 , which this time subtracts 188 million euros, when it added 72 million euros in the first quarter of 2022.

Added to this is a higher tax contribution, given that Telefónica paid more taxes in the first quarter of the year, specifically, 162 million euros, than in the same period of the previous year.

Similarly, Oibda’s operating result before amortization was €3,121 million at the end of the first quarter (-2.4% yoy), “achieving a stable and consistent level thanks to income growth and focus on revenue growth,” the company said.


We started the year strong, despite the hugely challenging global economic environment. We continue to implement our strategic plan and add another quarter of accelerated revenue growth in all regions in which Telefónica has a presence,” Alvarez Pallet highlighted.

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In addition, he made it clear that the company is on track to achieve its full-year financial targets. “We can also confirm the planned dividend for 2023. Telefónica continues to fulfill its debt reduction commitments and continues to strengthen its balance sheet thanks to its predictability,” added the company’s first sword.

Thus, the operator emphasized that these results reinforce the positive performance in the first three months of the year for the main subsidiaries. In Spain, revenue increased by 0.3% to €3,088 million, in Germany it grew by 8% (€2,101 million) and in Brazil, turnover through March was €2,282 million (+17.5% YoY).

Similarly, in the UK, it improved its organic growth levels, reaching €2,947 million. Hispam continued to evolve in its goal of achieving a structured and sustainable exposure to the region.

In this context, the company also displayed general revenue increases across all segments and business units in the first quarter of the year “despite inflationary tensions.”

Debt reduction

In the first quarter of the cycle, Telefónica’s net debt amounted to €26,443 million, 3.5% less than that of the previous year, as a result of the company’s “financial strength” and the “cash generated by the business”. In fact, as of March 31, the free cash generation was €454 million.

Telefónica faces the current scenario of inflationary pressures and rising interest rates with a strong financial position and liquidity. The company stated that more than 80% of the debt is based on fixed rates, and it has maturities covered in the next three years, and the average debt life is 13.2 years, and the liquidity position is close to 21.400 million euros.

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The operator finished the quarter with a customer base of 383.6 million, up 4.15% from the previous year and with growth of 16% in fiber customers and 7% in mobile contract customers.

Likewise, the acceleration of fiber and 5G deployment is compounded by the closure of copper plants in Spain, scheduled for April 2024.

The company had a total of 168.9 million units passed through at the end of March, up 4% from last year, of which a total of 66.6 million (+15%) operated over Telefónica’s fiber networks.

Fifth generation network

Regarding 5G technology, which is already available in the four major markets, the company launched the ‘standalone’ version in Brazil during the quarter and plans to implement it in the UK, Germany and Spain throughout 2023.

At the end of March, 5G had already covered more than 2,100 locations in the UK, more than 82% of the population in Germany, 85% of the population in Spain and 58 cities in Brazil.

As for Telefónica Tech, this business unit grew by 43.5% in the first quarter, reaching 429 million euros, a rate “well above the market” and which, according to the company, contributed to the growth in global revenues of the B2B segment.

Specifically, within the overall increase in revenue recorded in the first three months of 2023, the B2B segment remained one of the key drivers of the company’s growth, with an increase in sales of 9% organically compared to the first quarter of 2022.

Meanwhile, Telefónica Infra continued to strengthen Telefónica’s position “thanks to its value creation and its leading position in the implementation of new fiber infrastructure models”.

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Telxius, Telefónica’s undersea cable company, reported an increase in reported revenue of 8.4% and an increase in Oibda of 10.4%, thus growth for the fifth consecutive quarter.

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