Telefónica loses $892 million due to ERE and decline in its UK business

Telefónica loses $892 million due to ERE and decline in its UK businessPeople’s Army

phone I recorded some Accounting losses of 892 million euros in 2023 After saving Telefónica Spain restructuring plan And the Impairment of goodwill in its UK subsidiaryin spite of Revenues increased by 1.6% to 40,652 million Euro, as reported by the operator, who It achieved all its financial targets for 2023 and confirmed a cash dividend of €0.3 For this year.

specially, Net profit Regular Telefónica has arrived, which excludes allowances and exceptional items €2,369 million in 2023, an increase of 17.1% than it was the previous year.

Including a provision of €1,320 million corresponding to the restructuring plan of Telefónica Spain and an impairment of goodwill of €1,786 million in Virgin Media O2 – Its 50% UK subsidiary with Liberty – derived from higher discount rates and macroeconomic conditions in the UK, among other unusual events, net loss recorded in 2023 was €892 million (compared to a profit of €2,011 million in 2022 ).

Based on the Invoicesin 2023 saw broad-based revenue growth In the main markets in which it operates, its turnover of €40,652 million (+1.6% y/y) is the highest since 2020.

Likewise, normal operating result before depreciation (OPDA) (excluding the impact of extraordinary items) was €13,121 million, representing a year-on-year increase of 1.4%.

However, Telefónica’s subsidiary Oibda was also reportedly affected by extraordinary events, and in 2023 its value amounted to €11,390 million, which was 11.4% lower than the previous year (€12,852 million).

As for Corporate tax represents income of 884 million euros in the last quarter of last year and 899 million euros in 2023.This compares to expenses of 326 million euros in the last quarter of the previous year and 641 million euros in the year.

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“Communications” explained that this is mainly due to Recording the financial impact of the allocation related to the Employment Organization (ERE) file for 3,420 employees Which the company recently implemented in its three main subsidiaries in Spain and on the recognition of deferred tax assets for “future use of tax credits” in Spain.

On the other hand, the company also exceeded its free cash flow forecast, which amounted to 4,227 million euros, higher than the 4,000 million estimated.

“Telefónica continues to implement its roadmap, without stopping in the face of global macroeconomic uncertainty, with the ambition and determination necessary to complete the operational transformation process started in 2016. In 2023, Telefónica has achieved all its financial targets and is doggedly facing the commitments” set out in Our strategic plan GPS (English abbreviation for Growth, Profitability and Sustainability) is to continue building a new Telefónica and lead the new digital era,” he stressed. President of Telefónica, José María Álvarez Ballete.

“The operator has returned to growth with greater profitability and, moreover, in a more sustainable way. Revenue growth and cash flow generation remain strong, allowing us to comfortably cover the dividend of €0.30 per action with cash,” he added. .

Maintains its profits

Regarding shareholders’ remuneration for the year 2024, The company confirmed the distribution of cash dividends of 0.3 euros per share, paid in two tranchesone in December 2024 (€0.15) and the other in June 2025 (€0.15), in line with what is specified in its “GPS” plan.

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“In addition, 1.4% of the company’s share capital will be amortized, equivalent to the treasury shares outstanding as of June 30, 2023,” Telefónica explained.

Regarding dividends for 2023, also €0.30 per share in cashThe company already paid the first tranche (0.15 euros) last December and plans to pay the second (0.15 euros) next June.

religion

On the other side, The operator ended 2023 with a net financial debt of 27,349 million Euros, which means a debt ratio of 2.6 times. It rose by €662 million despite generating positive free cash flow of €3,988 million.

AndActors that increased net debt in 2023, As Telefónica explained, they were: Shareholder remuneration (2,320 million euros), Net financial investments (EUR 688 million, mainly due to the acquisition of shares in Telefónica Germany), business source liabilities (EUR 854 million) and “other net factors” (EUR 788 million).

In this sense, in 2023 the company made financing efforts amounting to 5,296 million euros, allowing it to maintain a liquidity position of 19,531 million euros.

Telefónica therefore has maturities for the next three years, of which around 80% are at a fixed interest rate and maintains an average debt age of close to 11.6 years.

Improve forecasts

Regarding expectations for 2024, Telefónica expects revenue growth of around 1%, EBITDA between 1% and 2% and operating cash (Ebitdaal-CapEx) also between 1% and 2%..

Likewise, he expects an investment-to-income figure of up to 13% and an increase in free cash flow of more than 10%.

“With regard to the cash growth target for this year, as a reference it will be the amount of 2,308 million euros achieved through the new definition that Telefónica will apply starting from this year,” the operator explained.

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