Telefonica looks to new buy Vivo after positive results
O2 OWNER Telefonica posted a robust 9.4 per cent rise in first-half profit as strength abroad offset a weak, but improving, performance in its native Spain.
The results were released just hours after the firm announced it had completed the long-mooted buyout of its joint venture partner in Brazilian telecoms firm Vivo for €7.5bn (£6.3bn). The firm hopes the deal will bolster revenue streams, which are slowing in its mature European markets.
Telefonica posted first-half net profit of €3.78bn, with revenue of €29.05bn, both slightly ahead of forecast.
The results showed modest signs of improvement at Telefonica’s recession-hit Spanish unit, which makes one-third of group revenue.
Revenue at the unit was down 3.2 per cent in the second quarter, having fallen 5.7 per cent in the first. The company managed to keep a lid on costs and retain more customers as it fought off cheaper competition.
In Latin America, Telefonica’s revenue was up 10.2 per cent and core earnings were up 6.1 per cent. The unit accounts for the bulk of group revenue.