Telefonica Posts Lower Profit In Q1; Backs Full-year View

(RTTNews) - Spanish telecom group Telefónica S.A. (TEF, TDE.L) Friday reported about 23 percent decline in the first-quarter profit, hurt by exchange rate fluctuations and disposal of certain assets. The company also backed its financial and operating targets for 2014.

According to the firm, its contract mobile accesses grew almost double-digit year-on-year benefited by acquisition of almost 6 million smartphone customers.

Movistar Fusión continued to be the company´s key growth lever and reached 3.2 million customers and 1.2 million additional mobile lines, representing 64 percent of consumer fixed broadband customers and 50 percent of mobile contract customers.

Fusión ARPU amounted to 70.2 euros in the first quarter, virtually stable year-on-year, and churn stood at 1.3 percent.

For the first quarter, the company's net income fell 23.2 percent to 692 million euros from 902 million euros in the previous year.

Revenues for the quarter fell 13.5 percent to 12.23 billion euros from 14.14 billion euros in the same quarter last year. Revenues were up 1.5 percent in organic terms. Excluding the negative impact of regulation, organic revenue growth was 3.4 percent.

Telefónica UK revenues improved 2.4 percent from last year. The company noted that Telefónica España revenues showed significant improvement in the year-on-year downward trend, and revenues were down 8.2 percent, 3.7 percentage points lower than in the prior year.

Telefónica Brasil revenues fell 18.3 percent, and Telefónica Hispanoamérica showed 12.9 percent decline in revenues. Telefónica Deutschland revenues were down 8.8 percent from the preceding year.

At the end of March, Telefónica Group reached 313.1 million accesses, down 1 percent from a year ago, due to sale of T. Czech Republic and the disposal of assets relating to the fixed consumer business in the U.K. Excluding these impacts, total accesses grew 2 percent.

Mobile accesses increased by 3 percent in organic terms, and Smartphone posted net additions of 5.6 million in the quarter. Retail fixed broadband accesses totaled 17.6 million, up 2 percent from the year 2013.

Pay TV accesses totaled 3.6 million, and was up 8 percent year-on-year.

For 2014, the company backed its financial and operating targets, including dividend distribution of 0.75 euros per share. For the year, it still sees positive revenue growth, on an organic basis, and excluding Venezuela.

In Madrid, Telefónica shares are currently trading at 11.83 euros, down 1.74 percent, on a volume of 3.22 million shares.