Telefonica Reports 7.7% Rise in Q1 Profits

Telefonica has reported a 7.7% rise in its first quarter results, with net income rising to €1.26 ($1.7) billion. Sales rose 15 percent to €13.7 (US$18.6) billion. Telefonica's cellular customer base stood at 148.9 million by 31st March 2007, 13.4% higher than in March 2006 due to the increased growth of Telefonica Latinoamerica where they totalled 85.6 million (+15.6% year-on-year). In Spain, the total number of customers increased 7.6% year-on-year to stand at 21.8 million in a market that now has eight operators. In Europe, customers rose to 35.9 million, 9.4% up on cellular connections in March 2006.

With a contribution of 47.8% to the Telefonica Group?s total consolidated OIBDA, Telefonica Spain recorded consolidated operating income before depreciation and amortization (OIBDA) of €2.44 (US$3.3) billion euros in the first quarter of the year, a year-on-year growth of 10.7%. The Wireless business OIBDA in January-March 2007 amounted to €1.03 (US$1.4) billion euros (+7.9% year-on-year) and the margin as a percentage of revenues stood at 44%, the same level than the previous year.

OIBDA for Telefonica Latinoamerica - €1.7 (US$2.3) billion - represented 33.6% of total OIBDA for the Telefonica Group, registering a year-on-year growth of 12.1% (+20.2% in constant euros). Organic variation would reach 14.6%.

Telefonica O2 Europe, contributing 18.3% to the Telefonica Group?s total OIBDA, obtained cumulative OIBDA of €933 million (US$1.27 billion) in January-March, which included the February-March period of the 02 Group and the January-March period of Telefonica O2 Czech Republic and Telefonica Deutschland.

Telefonica Group CapEx during the first quarter of the year amounted to €1.39 (US$1.88) billion, a 6.5% increase year-on-year (+8.6% in constant euros), due to greater investments in Telefonica Latinoamerica (broadband, TV and GSM) and Telefonica O2 Europe (2G and 3G networks). 74% of total investment was devoted to growth activities, 5 percentage points up on the previous year mainly due to optimisation towards broadband and the mobile business. Nevertheless, it should be noted that there is a strong cyclical component of the investments, so that this performance cannot be extrapolated to the full year."

Posted to the site on 16th May 2007