Telefonica Net Income Drops in Q3

Telefonica’s net income dropped by 98.1% in the third quarter of 2024. The drop was caused by an impairment in Peru and negative foreign exchange movements in Brazil.

The operator reported Q3 net income had dropped from €502 million to €10 million, reflecting a non-cash impairment of goodwill and other tangible assets of €314 million in Peru. Revenue declined 2.9% to €10 billion, mainly due to the depreciation of the Brazilian real. Service revenue fell 2.2% and handset sales 9%. However, the company's underlying performance in Spain, Brazil, and Germany remained solid.

Despite the testing quarter, the company reiterated its full-year guidance of broadly flat revenue. Telefonica was able to paint a more positive picture for the period from January to September, with revenue flat at €30.4 billion and net income of €989 million, a 21.7% decline. Jose Maria Alvarez-Pallete, chair and CEO, said Telefonica performed well during the nine months against a global backdrop of uncertainty.

Separately, Zegona Communications announced a partnership between its Vodafone Spain subsidiary and Telefonica to launch a new fiber company in the country. The joint venture will provide retail and wholesale broadband services in Spain, covering 3.6 million premises, and provide fiber access to 1.4 million Vodafone Spain and Telefonica customers. Telefonica will own 63% of the business and Vodafone Spain the remaining 37%. A third-party investor will also be introduced in the first half of 2025.