Telefonica upgrades forecasts after ‘solid’ first half

Spanish telecoms giant Telefonica raised its forecast for 2022 sales on Thursday after posting better-than-expected earnings during the first six months.

Telefonica said in a statement it booked bottom-line net profit of 1.03 billion euros ($1.05 billion) for the period from January to June, buoyed by strong growth in its core mobile phone services.

Analysts at FactSet had been pencilling in profit of 776 million euros.

A year earlier, the operator’s first-half net profit had amounted to 8.6 billion euros, inflated by the proceeds of the sale of its mobile phone masts in Europe and Latin America to American Tower Corporation for 7.7 billion euros.

First-half revenues were up 4.2 percent at 22.4 billion euros.

On the basis of its performance so far, Telefonica said it now expected 2022 revenue growth in the “high-end of the low-single digit” range despite the global “economic weakness” sparked by the war in Ukraine.

Previously, it had been projecting “low single-digit growth” for revenues in 2022.

“Telefonica reported solid results in the first half of 2022 in a context of high uncertainty in global markets,” said chief executive Jose Maria Alvarez-Pallete.

“Telefonica is not immune to global uncertainties, but it is resilient enough to continue to offer confidence and stability to whatever challenges lie ahead.”

Under a major restructuring announced in 2019, Telefonica has focussed on the key markets of Brazil, Britain, Germany, and Spain, where it believes it can grow sustainably in the long term.

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