Spain's Telefonica sees Q1 profit up 21 per cent but revenue in key Latin America market slumps

MADRID – Spanish telecoms company Telefonica said Wednesday its first-quarter net profit rose 21 per cent to 902 million euros ($1.18 billion) despite a fall in revenues in its key Latin American market.

The company, which has mobile and fixed-line operations across Europe and Latin America, said that revenue from its business in Brazil had overtaken its domestic market for the first time. Sales in the Latin American country reached 3.263 billion euros, while a 16.4 per cent drop in recession-strapped Spain left income at 3.260 billion euros.

The Brazilian figure was down 10 per cent in euros — because of exchange rate fluctuations — but up 3 per cent in the local currency, Telefonica said.

Income in Latin America dropped by 4 per cent to 7.23 billion euros — again due to exchange rate fluctuations. In Europe, where many countries are in recession, income fell 11 per cent to 6.67 billion euros.

Telefonica said overall revenue dropped 9 per cent to 14.14 billion euros from 15.51 billion euros in the same period last year.

The company said net debt edged up to 51.8 billion euros from 51.3 billion at the end of 2012. The fall in the Venezuelan bolivar added to borrowings.

Telefonica SA’s shares were down 1.2 per cent at 11.15 euros in trading in Madrid.