Telefonica highlighted progress in attempts to restructure the business and cut its debt pile, though Covid-19 (coronavirus) and negative currency movements cost it more than €1.5 billion in Q4 revenue.
CEO Jose Maria Alvarez-Pallete (pictured) said the company had “lived up to the challenge” of the pandemic, aided by moves already made as part of a sweeping restructure plan unveiled in 2019.
The executive pointed to a jump in earnings from its recently formed Telefonica Tech division, which houses business areas deemed high growth including cybersecurity services, cloud, big data and IoT. Improvements were partly attributed to higher demand from companies upping digital transformation efforts inspired by the pandemic.
Telefonica also noted during Q4 its infrastructure division had worked on a number of large deals including a fibre JV in Germany and the multi-billion dollar sale of its Telxius unit to American Tower, subsequently announced in January.
Group revenue for Q4 fell 12 per cent year-on-year to €10.9 billion on the impact of the pandemic and unfavourable currency movements. Net profit was €911 million, compared with a loss of €202 million in the same period of 2019, though that figure had been heavily impacted by one-off impairment costs.
Telefonica estimated the revenue impact of the pandemic at €1.9 billion across the year, with €508 million of this in Q4. Foreign exchange movements were estimated at hitting its revenue to the tune of €3.1 billion across the year with €1 billion in Q4.
The company noted there had been increased commercial activity in its “main markets” of Spain, the UK, Germany and Brazil towards the close of the period.
Despite falls in revenue, in Q4 the company managed to cut almost €1.5 billion from its debt, leaving it owing €35.2 billion by the end of 2020.Subscribe to our daily newsletter Back