AFP, MADRID: Spanish telecoms giant Telefonica said yesterday its net profit more than halved in the first quarter from same time last year when its results were inflated by the sale of its British operator 02. The company reported a net profit of 776 million euros ($879.7 million) during the first three months of the year, a 56.9 per cent drop from the first quarter of 2015. However Telefonica, one of the world's top five telecoms groups, still missed by a wide margin the median profit forecast of 841 million euros of analysts polled by Factset. Telefonica's results in the first quarter of 2015 were boosted by tax breaks related to the proposed $14 billion sale of its British mobile phone operator O2 to Hong Kong conglomerate Hutchison Whampoa.
That deal is still dependent on Brussels giving the green light to the transaction following a competition enquiry.
Core operating income before depreciation and amortisation (OIBDA) dropped 6.7 per cent to 3.38 billion euros due in part to the lower value of currencies in Latin America, a key region for the firm while sales rose 6.6 per cent to 10.78 billion euros.
"The results are in line with our expectations for the year-end and enable us to reiterate our guidance and the dividend of 0.75 euros per share for 2016," Telefonica's new head Jose Maria Alvarez-Pallete said in a statement.
Alvarez, 52, took over from Cesar Alierta, 70, who headed Telefonica for nearly 16 years.
Telefonica said its debt stood at 50.2 billion euros
at the end of March, up from 49.9 billion euros at the end of December.