The telecom large has met a number of key monetary steering targets for 2024, whereas additionally persevering with to solidify its place within the Spanish market by elevated investments in 5G infrastructure.
Telefónica’s income rose to €41.3bn in 2024, following stronger efficiency within the Spanish market, which was an increase of 1.6%, surpassing the corporate’s expectations of round 1%. Spain skilled its first yr of development in all key divisions on an annual foundation since 2018, in addition to the bottom churn since 2013.
Adjusted internet revenue, excluding extraordinary impacts, got here as much as €2.3bn final yr, whereas internet monetary debt dropped to €27.2bn.
The corporate met a number of key monetary targets put in place for 2024. Earnings earlier than curiosity, taxes, depreciation and amortisation (EBITDA) inched up by 1.2%, in comparison with expectations of development between 1% and a pair of% on an annual foundation.
Telefónica additionally introduced a 2025 money dividend of €0.30 per share, of which €0.15 is predicted to be paid out in December this yr and €0.15 in June subsequent yr.
Marc Murtra, the chairman and CEO of Telefónica, stated within the January-December 2024 earnings report on the corporate’s web site: “As I tackle the function of Chairman and CEO Telefónica, I see an organization constructed on distinctive foundations, giant buyer base, world-class infrastructure and administration abilities and know-how. “The Firm’s achievements in 2024 display the energy of those fundamentals and the execution of the technique. We now have delivered on our monetary commitments whereas persevering with to strengthen our aggressive place. We now have sustained momentum in our core markets of Spain, Brazil, Germany and UK, with a robust money technology of €2.6bn. “We now have a novel place to steer in an evolving panorama, a brand new time in Europe. As such, we’ve important alternatives to drive enterprise efficiency and speed up worth creation. We enter 2025 targeted on constructing on this momentum and delivering sustainable worth for all our stakeholders.”
Telefónica improves place in Spanish market
Telefónica has been strengthening its place within the Spanish market currently, primarily due to its large ranging 5G community protection. It additionally has strong fiber optic infrastructure, with the corporate additionally ramping up efforts to enhance buyer loyalty, primarily by bundling merchandise.
This has gone a good distance in boosting Spanish income, whereas additionally sustaining good buyer retention charges. The corporate’s Movistar model is very recognised and well-trusted in Spain.
Nonetheless, a number of challenges stay for the corporate in Spain, together with mounting competitors from smaller opponents who’re racing to supply low-cost plans. Telefónica additionally must proceed ramping up its infrastructure funding in 5G expertise, particularly within the present extremely aggressive surroundings.
Moreover, there might be interference from the Spanish authorities within the firm’s enterprise and strategic choices, given its giant dimension and significance to the Spanish economic system. The continuing weak international financial outlook in addition to excessive inflation throughout Spain and the remainder of the EU currently has additionally exacerbated the price of residing disaster for a number of Telefónica shoppers.
Because of this the corporate could have to higher plan and steadiness any upcoming worth hikes, or threat shedding shoppers who can not afford the potential will increase.