Telefonica reports loss: Spanish teleco Telefonica reported a net loss of 2.15 billion euros ($2.32 billion) in the fourth quarter, primarily due to a write-off in Britain and the costs associated with a layoff plan in Spain. Despite this, the company stated that it had achieved its core profitability and revenue targets for 2023.

CEO Jose Maria Alvarez-Pallete highlighted positive momentum across the business units, noting growth in Spain and strong performance in Brazil and Germany. The company reaffirmed its core earnings and revenue growth targets for 2024 and announced its annual dividend would remain at 0.30 euros per share. Following the results announcement, the company's shares rose 1.5 per cent in early trading in Madrid.

Telefonica's operating income nearly halved in the fourth quarter to 1.8 billion euros, while revenues remained stable at 10.15 billion euros. Excluding one-off items, the company would have reported a net profit of 730 million euros.

Incomes fell 

For the full year, core income decreased by over 11 per cent to 11.39 billion euros, while revenues increased to 40.65 billion euros, meeting the company's targets. Company officials expect revenues to rise by around 1 per cent this year compared to 2023, with earnings before interest, taxes, depreciation, and amortisation (EBITDA) growing between 1 per cent and 2 per cent.

The significant fourth-quarter loss was attributed to a 1.15 billion euro cost for the layoff plan in Spain and a 1.73 billion euro write-off on Virgin Media O2, its joint venture in the UK. Telefonica cited the challenging economic conditions in Britain and higher interest rates impacting future cash flow estimates and the value of derivatives held by the unit.

Telefonica recently finalised a deal with unions in Spain to lay off up to 3,400 employees, a move expected to result in annual savings of 285 million euros from 2025 onwards.

(with Reuters inputs)