Telefonica lifts 2021 outlook after strong quarter

MADRID: Spanish telecoms giant Telefonica revised up its 2021 outlook on Thursday as it posted a "historic" profit in the second quarter on the back of exceptional gains from divestments.

The company announced a net profit of 7.74 billion euros ($9.18 billion) for April-June, what it called a historic figure, up from 425 million euros one year previously.

Analysts polled by FactSet had seen net profit at 6.2 billion euros.

"These results show that Telefonica is on the right track," Telefonica chairman Jose Maria Alvarez-Pallete said in a statement.

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Telefonica said its net profit during the second quarter was boosted by the sale of its mobile phone masts unit Telxius to American Tower Corporation, one of the world's largest tower companies, for 7.7 billion euros.

The operation, completed in June, will hand over more than 30,000 mobile phone masts in Spain, Germany, Brazil, Peru, Chile and Argentina to the US firm, which will then lease them back to Telefonica.

Telefonica said its second quarter results were also lifted by the fusion of its British unit O2 with Virgin Media.

This operation was announced in May 2020 but only concluded in June.

Quarterly revenues slipped to 9.96 billion euros on the second quarter from 10.34 billion euros in the same year-ago period, mainly due to foreign exchange trends, the company said.

Telefonica said its first half performance had met or slightly surpassed its financial targets for 2021, leading it to raise its outlook for the full year.

It had expected a "stabilisation" in revenue this year but now expects to see "stable to slight growth".