Multinational operator Telefonica warned earnings at one of its biggest Latin American businesses in the nine months to end-September will take a hit due to changes in accounting practices and higher prices.
In a regulatory filing, the operator predicted operating income before depreciation and amortisation (OIBDA) at its Argentine division will be around €215 million less than in the comparable period of 2017, Reuters reported. Revenue is tipped to be down by €625 million.
Telefonica Argentina generated OIBDA €218 million in Q2, down 20.9 per cent on the comparable 2017 quarter. Revenue fell 23.4 per cent year-on-year to €703 million, however both figures were up on an organic basis, by 27.7 per cent and 22.3 per cent respectively.
Reuters noted Telefonica does not expect the declines in the January to September period to impact its overall net debt, which stood at €43.6 billion at end-June.
Earlier this year, the operator approached shareholders regarding a potential listing of the Argentina unit as part of efforts to reduce debt, though a representative at the time said Telefonica was exploring “different options” for Argentina and other divisions.
Argentina sits within Telefonica’s Hispam Sur division, alongside Chile, Peru and Uruguay. In September, El Economista reported the operator was considering a full or partial exit from its businesses in Mexico and Central America, which form part of its Hispam Norte unit, with speculation the remaining markets (Colombia, Ecuador and Venezuela) could be folded into the southern business unit.
The operator is due to release earnings figures covering Q3 and the nine months to end-September on 31 October.Subscribe to our daily newsletter Back