Telefónica posts 49-million-euro loss on Latin America write-offs

Spanish telecoms giant Telefónica reported Thursday an annual loss for the second straight year, weighed down by write-offs from the sale of several subsidiaries in Latin America.

The company booked a net loss of 49 million euros (US$51 million) last year, narrowing from a net loss of 892 million euros in 2023, when it took a hit from writing down the value of its British unit Virgin Media O2 (VMO2).

Without these extraordinary items, the group would then have made a profit of 2.37 billion euros.

Telefónica said the 2024 results reflected the depreciation of its assets in Latin America, where it is reducing its exposure to market volatility in the region.

It booked write-offs of 1.27 billion euros in Argentina, 397 million in Chile and 108 million in Peru.

But it said full-year revenue had risen 1.6 percent to 41.3 billion euros, above its target of revenue growth of around one percent.

Analysts polled by Factset had predicted full-year revenues of 40.96 billion euros.

These are “very favourable results,” Laura Abasolo, the group's chief financial officer, said at a press conference. She said she expected the operator's turnover to rise again in 2025, despite a “complex” economic environment. 

"We maintained momentum in our key markets, Spain, Brazil, Germany and Britain, with solid cash generation," argued Telefónica's chief president Marc Murtra, who was appointed to the post just last month.

The company has launched a strategic shift toward these four markets in a bid to reduce its debt and bolster profitability.

On Tuesday, Telefónica agreed to sell its subsidiary in Argentina for US$1.2 billion to Telecom Argentina SA, prompting the government of President Javier Milei to announce an investigation over competition concerns.

It has also recently sold its subsidiaries in Guatemala and Costa Rica and concluded a deal to cede its Colombian branch.

Telefónica has been through a turbulent period since Saudi group STC took a 9.9-percent stake in September 2023.

That led the Spanish state to re-enter the group's capital to defend its "strategic" role of providing services to the country's armed forces.

– TIMES/AFP