Telefónica profits hit by Spanish restructuring

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Telefónica has posted a €5.4bn ($7.2bn) profit for the full 2011 financial year, almost 50 per cent less than the €10.2bn profit it recorded in 2010. The Spanish operator group has felt the impact of its workforce restructuring plans in Spain.

The group posted revenue of €62.8bn for the full year, up 3.5 per cent on 2010’s €60.7bn. The firm’s Latin American arm generated the majority of sales, hitting €29.2bn, while Spain generated €17.3bn in sales and the rest of Europe drummed up €15.5bn in revenue.

According to the group, the profit figure was lower than that in 2010 due to several one-off accounting events. In 2010, the firm’s bottom line saw a €3.5bn gain due to the revaluation of Telefónica’s pre-existing stake in Vivo. In 2011, the firm saw the negative impact in 2011 of the €1.9bn provision for expenses associated with the workforce restructuring plan in Spain.

“Telefónica has led the increase of penetration of mobile broadband services in its markets, with more than 38 million customers at the end of the year, 61 per cent above 2010 figure. As a result, mobile data revenue also grew significantly to almost 20 per cent in organic terms, and now represents 31 per cent of mobile service revenues,” said chairman César Alierta.

“We will continue pushing the mass-market adoption of broadband in our markets, both fixed and mobile, with Telefónica becoming the key lever for the development of the societies where we are present. Additionally, we have reinforced our position in the value chain with the launch of Telefónica Digital, in order to accelerate the capture of new revenues in the digital world. As a result, in 2012 we expect revenue growth of more than 1 per cent at current exchange rates.”

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