Telefónica SA (BME: TEF) reported first-quarter adjusted EBITDA of €2.84 billion, beating consensus estimates by 1.8 percent as strong growth in Brazil and solid domestic performance offset weakness in Germany and the impact of asset sales.
According to its regulatory filing Thursday, the Spanish telecom operator’s revenue for the January-March period climbed 0.4 percent to €8.13 billion, also ahead of analyst forecasts of €8.07 billion. The company reaffirmed its 2026 financial guidance and a planned dividend of €0.15 per share.
Shares were little changed in Madrid. The company confirmed its full-year guidance for constant-currency revenue growth of 1.5 percent to 2.5 percent, a target that helped reassure investors despite a reported net loss of €411 million, which was primarily attributed to the divestment of its units in Chile, Colombia, and Mexico.
Regional Divergence
Telefónica’s results showed a sharp divergence in performance across its core geographies. The Brazilian unit remained the primary growth engine, posting a 7.4 percent increase in revenue and an 8.7 percent rise in adjusted EBITDA. The home market of Spain also delivered a solid 2.0 percent revenue increase.
This strength was offset by the German business, which saw revenue decline 8.6 percent and adjusted EBITDA fall 8.4 percent. The company attributed the poor performance in Germany to customer migration issues and weaker demand for handsets.
Debt and Divestments
A key focus for investors has been Telefónica’s effort to reduce its significant debt pile. The company made progress in the quarter, cutting net financial debt by €1.50 billion to €25.34 billion. This lowered its leverage ratio to 2.72 times adjusted EBITDAaL.
The debt reduction was aided by proceeds from its portfolio optimization strategy, including the sales of its Colombian and Chilean businesses. Competitor Millicom International Cellular (TIGO) has been an active buyer in the region, recently completing the acquisition of Telefónica’s stakes in Colombia and jointly acquiring its Chilean operations, where it is now applying its own operational playbook to turn the business around.
The reaffirmed guidance suggests management is confident in its ability to navigate the mixed regional trends and continue its deleveraging path. Investors will watch the integration of recent acquisitions by competitors like Millicom, which could reshape the competitive landscape in key Latin American markets.
This article is for informational purposes only and does not constitute investment advice.
