By Inti Landauro
MADRID (Reuters) -Spanish telecom company Telefonica reported a first-quarter net loss of 1.3 billion euros ($1.45 billion) on Wednesday, in line with estimates, after writing down the value of assets it has sold in Peru and Argentina.
Analysts had forecast a loss of 1.32 billion euros, according to a consensus provided by the company. Shares were trading 0.6% higher at 1130 GMT.
The Spanish giant retained its annual outlook and dividend plans, and CEO Emilio Gayo said the company will disclose a new business strategy in the second half of this year.
“The group’s results should improve during the year, on the path to meet the 2025 targets,” Gayo said in a statement.
He expected to see growth of the business in its four main markets of Spain, Brazil, Britain, and Germany, as well as increased use of artificial intelligence technologies to boost efficiency and profit margins.
Excluding capital losses of 1.7 billion euros from its Latin American disposals – 1.2 billion euros in Argentina and 500 million euros in Peru – Telefonica reported a profit of 427 million euros.
That was down from 576 million euros a year ago. The company suffered from adverse exchange rates, mainly a weaker Brazilian real.
First-quarter revenue fell 2.9% from the prior-year period to 9.22 billion euros, slightly surpassing analysts’ expectations of 9.1 billion euros.
The company plans to retrain some workers to adapt to a new business environment, to avoid outsourcng and job losses. It cut about 3,400 jobs last year, a move that would reduce its costs by 285 million euros per year from 2025.
SCALING BACK
Telefonica has scaled back operations in several Spanish-speaking Latin American markets with lower returns than capital costs.
CFO Laura Abasolo declined to say whether future assets sales in Latin America would lead to more impairments, but she said the valuation of the different assets has been regularly updated to reflect their respective outlooks.
Last month, Telefonica agreed to sell its Peruvian operations at a fraction of the price it paid 30 years ago and sold its Argentina unit for $1.25 billion.
It had already written off 314 million euros on the value of its Peruvian unit in the third quarter of 2024.
($1 = 0.8941 euros)
(Reporting by Inti Landauro; Editing by Jesús Aguado, Sherry Jacob-Phillips and Rachna Uppal)
