MADRID, Nov 4 (Reuters) – Spanish telecoms agency Telefonica SA (TEF.MC) mentioned on Thursday it swung right into a internet revenue within the third quarter from a loss a yr earlier than because of the efficiency of its overseas models, although rising power prices hit profitability in its home market.
The corporate made a internet revenue of 706 million euros ($817.6 million) within the third quarter in contrast with a 160 million loss in the identical interval a yr in the past, following a 785 million euro write-down of property in Argentina.
Whereas enterprise was brisk in Germany and in Latin America, core revenue in Spain throughout the quarter fell 8.9% from the earlier yr.
That was due primarily to rising power prices and better prices from sports activities content material after proper holders gave a rebate in 2020 due to the pandemic, the corporate mentioned. Shares initially fell 2.9%, however later partly recovered and had been down 1.4% in mid-day buying and selling.
The upper power prices in Spain will possible hold weighing on Telefonica’s profitability for a number of quarters forward, Chief Working Officer Angel Vila advised analysts in a convention name on Thursday.
The impact will “fade away sooner or later subsequent yr”, he added.
Over the primary 9 months of the yr, Telefonica booked a document 9.34 billion euro internet revenue, primarily due to capital positive factors made on the sale of its Telxius tower unit and the tie-up of its O2 unit and Virgin Media in Britain.
General income fell 11% within the third quarter from the identical interval a yr in the past as the corporate has turn into considerably smaller on account of property gross sales, however core earnings rose 40%.
“We maintained the momentum of year-on-year natural income and (core revenue) progress for the second consecutive quarter,” its Chief Govt Jose Maria Alvarez-Pallete mentioned in a press release.
Analysts polled by Refinitiv had anticipated internet revenue of 568 million euros within the third quarter.
Telefonica reiterated that it expects income and core revenue to be “secure” or see “slight progress” in 2021, in step with an announcement final quarter.
Like European rivals, the biggest Spanish telecom agency has been going through progress points apart from the affect of the pandemic, and has been promoting property to chop debt and fund an improve to next-generation 5G networks.
On account of its asset disposal technique, Telefonica managed to scale back its debt to 25 billion euros in September, 32% lower than in September 2020.
($1 = 0.8635 euro)
Reporting by Inti Landauro; Modifying by Shounak Dasgupta, Jan Harvey and Emelia Sithole-Matarise
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