Telefónica rises 1.6% on the stock market after reporting losses of 892 million in 2023

(Updates the news with code EC4338 with price data at the closing of the company’s stock market)

Madrid, Feb 22 (EFECOM).- Telefónica rises 1.6% on the stock market after presenting the closing results for 2023 this Thursday, when it lost 892 million euros, compared to the profit of 2,011 million the previous year, although it improved their income, according to market data.

At the close of trading, Telefónica’s share rose 0.059 euros, that is 1.6% (the sixth largest increase in the main Spanish stock market index, the IBEX 35), to 3.743 euros. During the year it revalued 5.91% and this week, in which it has advanced in all sessions, 5.02%.

The telecommunications company’s losses were caused by the ERE provisions and the deterioration of the goodwill of its British subsidiary VMO2. Its turnover grew 1.6% last year, up to 40,652 million euros, after increasing its income in all markets, except Latin America.

Renta 4 analyst Iván San Félix Carbajo has commented on Telefónica’s accounts that “they have exceeded income forecasts”, but have also exceeded the expected amount of funds allocated to provisions.

He has also pointed out that the results have been “better than expected in almost all regions, especially in Brazil and Germany” and that net debt increased by 813 million euros in the last quarter, up to 27,347 million.

The firm has established the target price (price that could be reached in the medium term) of the company at 4.6 euros per share and the recommendation at “overweight.”

IG expert Sergio Ávila commented that Telefónica’s losses have exceeded “market expectations” and added that they are “mainly due to a value adjustment in its subsidiary in the United Kingdom, O2”, which reflects the depreciation of the pound sterling against the euro.

Despite the negative result, “both the gross operating result and income were in line with expectations”, while specifying that “the company continues to generate solid free cash flow, which allows it to maintain its investments in infrastructure and pay dividends to its shareholders.

Ávila has also referred to the company’s forecasts for this year and the estimated 1% growth in gross operating profit and income. Of the latter, it expects to invest 13% in capital expenditures, “especially in the development of 5G and fiber optic networks to maintain its competitive position in the market.” He added that free cash flow is expected to increase more than 10%.

Regarding the challenges for the future performance of the company, he has highlighted “the evolution of the global economy and the intense competition in the sector”, while regarding the evolution of the stock on the stock market, he has considered that “it is listed in a wide lateral range between 3.40 and 3.92 euros” and that it is surely now heading towards “the upper part of the channel (3.84 and 3.92 euros)”. EFECOM

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