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Over the first nine months of the year, Telefonica booked a record 9.34 billion euro net profit, mainly because of capital gains made on the sale of its Telxius tower unit and the tie-up of its O2 unit and Virgin Media in Britain.
Overall revenue fell 11% in the third quarter from the same period a year ago as the company has become significantly smaller as a result of assets sales, but core earnings rose 40%.
“Telefonica performed strongly in Q3. We maintained the momentum of year-on-year organic revenue and (core profit) growth for the second consecutive quarter,” its Chief Executive Jose Maria Alvarez-Pallete said in a statement.
Analysts polled by Refinitiv had expected net profit of 568 million euros in the third quarter.
The company had reported a 160 million euro net loss in the same period of 2020 following a 785 million euro write-down of assets in Argentina.
Telefonica reiterated that it expects revenue and core profit to be “stable” or see “slight growth” in 2021, in line with an announcement three months ago.
Like European rivals, the largest Spanish telecom firm has been facing growth issues aside from the impact of the pandemic, and has been selling assets to cut debt and fund an upgrade to next-generation 5G networks.
As a result of its asset disposal strategy, Telefonica has managed to reduce its debt to 25 billion euros in September, 32% less than in September 2020.
($1 = 0.8635 euro)
