Spanish telecom giant
) reported fourth quarter 2013 adjusted earnings of 31 Euro cents
per share (42 cents per ADS) that improved from 11 Euro cents (15
cents per ADS) earned in the comparable quarter last year.
Adjusted earnings for the year were €1.01 ($1.39), up 16.1%
year over year.
The company recorded revenues of €14,436 million ($19,647
million) in the fourth quarter that dropped 8.8% year over year.
Revenues for the year declined 8.5% year over year to €57,061
million ($78,555 million). Weak performance by all the segments
has been blamed for the revenue decline.
In the fourth quarter, adjusted operating income before
depreciation and amortization (OIBDA) declined 8.7% to
€4,977million ($6,774million), resulting in adjusted OIBDA margin
of 34.5%, up 10 basis points year over year.
In 2013, adjusted OIBDA declined 10.1% year over year to
€19,077 million ($26,263 million), reflecting an adjusted OIBDA
margin of 33.4%, down 60 basis points.
Telefonica Latin America:
Latin American revenues decreased 6.7% year over year to €7,410
million ($10,085.0 million) in fourth quarter 2013, owing to
declines in Brazil (12.6%), followed by Chili (10.1%), Uruguay
(9.8%), Argentina and Mexico (each 4.7%), Ecuador (3.7%),
Columbia (2.1%) and Peru (1.9%). However, revenues from Venezuela
and Central America registered an improvement of 6.1%.
Revenues from Europe slid 10.0% year over year to €6,739 million
($9,172 million). The reported downside was owing to revenue
decline in every country where it has a presence.
In Spain, Wireless revenues fell 11.9% to €3,195 million
($4,348 million) resulting from the transformation process
undertaken by the company. Wireless revenues were €1,226 million
($1,668 million), down 18.9% over the year-earlier period, while
wireline business deteriorated 4.8% to €2,243.0 million ($3,052
million) during the quarter.
Revenues from the Czech Republic declined 14.0% year over year
to €437 million ($594.0 million) while from Ireland it declined
€143million ($194million) in the reported period. Meanwhile,
revenues from Germany and U.K. showed a 7.4% and 3.7% decrease to
reach €1,243 million ($1,691million) and €1,742million ($2,370
At the end of 2013, total customer access reached
approximately 323.1 million, up 2.0% year over year.
On an annualized basis, mobile access rose 3.0% to 254.7
million customers. Total Internet and data access declined 1.5%
to 19.1 million. Pay TV access reached 3.60 million, up 8.0% year
over year. Fixed telephony access dropped 1.7% to 39.34 million
subscribers at the end of the reported quarter.
Liquidity and Capital Expenditure (CapEx)
Telefonica exited 2013 with net debt of about €45.38 billion
($62.5 billion), down from €51.25 billion ($65.90 billion)
recorded at the end of 2012. The leverage ratio (net
debt-to-EBITDA) was 2.36 times, same as in 2012.
CapEx declined 0.7% year over year to €9.39 billion ($12.92
billion) in the reported period. Operating cash flow
(OIBDA-CapEx) was €9.68 ($13.32) billion, down 17.8% year over
In 2014, Telefonica expects revenue growth while OIBDA margin
will stabilize with an expected annualized erosion of 1%.
Additionally, the company expects net financial debt of less than
Telefonica continues to remain under pressure due to
intensifying European woes, weak domestic operations, slowdown in
Brazil, adverse regulations, highly leveraged balance sheet and
growing competition from
Vodafone Group Plc.
America Movil S.A.B. de C.V.
Telefonica currently carries a Zacks Rank #4 (Sell).
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