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Telefonica organic growth accelerates to 2.8% in Q3

Telefonica organic growth accelerates to 2.8% in Q3

Telefonica reported a return to organic growth in the third quarter, helped by stabilising results in its home market Spain and solid growth in key Latin America markets such as Brazil and Mexico. Revenue rose 2.8 percent on an organic basis to EUR 13.02 billion, and adjusted OIBDA was up 0.8 percent to EUR 4.27 billion. The company attributed the organic growth to a 14.1 percent rise in sales at Telefonica Hispanoamerica and 25.3 percent increase in mobile data revenues. 

On a reported basis, the sales and OIBDA figures were still 7.4 and 8.7 percent lower respectively, due to negative currency effects and the sale of activities in Ireland and Czech Republic. The company’s net profit declined 13.0 percent to EUR 947 million. 

Telefonica increased capital expenditure 26.2 percent in the first nine months of the year to EUR 5.74 billion, as part of efforts to improve customer experience and network quality. This left operating cash flow at EUR 6.56 billion. Net debt was reduced by EUR 2.6 billion in the last quarter to EUR 41.20 billion. Since then the acquisition of E-Plus in Germany and the sale of the stake in China Unicom and the rest of O2 Czech republic resulted in net debt increasing to EUR 44.88 billion, or 2.52 times annual OIBDA. 

Executive chairman Cesar Alierta said the company was preparing the ground for future growth, with the completion of the E-Plus deal and the pending acquisition of GVT in Brazil. The operator reiterated its forecast for full-year organic revenue growth of around 0.4 percent and the dividend. 

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