Telefonica’s first quarter results showed a partial recovery from the effects of the Covid-19 (coronavirus) pandemic, with the company claiming its performance put it on track to meet its 2021 financial targets.
Net income of €886 million was up 118.3 per cent on Q1 2020, which the operator stated showed the resilience of its business model, focused on cost reduction and stable operating cash flow.
Telefonica added the increase reflected “the lower impact of the effects of the pandemic” and the evolution of exchange rates.
Revenue fell 9 per cent to €10.3 billion, with its main drivers from its four core markets of Spain (29 per cent), Germany (18 per cent), Brazil (16 per cent) and the UK (15 per cent).
The company also highlighted strides in cash generation, which was up 200 per cent to €727 million, although these funds are earmarked for payments made following spectrum auctions in the UK, Chile and Spain.
Net debt was down by 6.4 per cent to €35.8 billion: Telefonica noted once pending deals complete, the figure would be reduced by a further €9 billion, taking it to around €26 billion, half the level it was in mid-2016.
The company ended Q1 with 374.4 million customers, a 1.5 per cent increase, mainly driven by its fibre business.
Looking ahead, Telefonica said the results set it up to achieve its goals for 2021, “consisting of a stabilisation of revenues and operating income,” as well as a return to a normal level of capex over revenues of up to 15 per cent.
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