Telefonica Stock Dips On Weak Net Profit; Sees Revenue Growth In FY16

(RTTNews) - Shares of Telefonica SA (TDE.L, TEF) declined around 3 percent in the morning trading in Spain after the telecom group reported Friday lower net profit in fiscal 2015 on hefty charge. Revenues were higher on increased accesses. Looking ahead, for 2016, the company expects revenue growth to be greater than 4 percent year-on-year, and OIBDA margin stabilizing.

For the year, net profit declined 8.5 percent from last year to 2.745 billion euros. The company said its net income was affected by extraordinary factors, mainly a non-recurrent impact of 2.60 billion euros in the fourth quarter related to the Voluntary Suspension Plan in Telefónica España. The company said the plan will improve the efficiency in coming years.

Underlying net income for the year reached 5.787 billion euros, 29.7 percent higher than last year. Basic earnings per share in underlying terms increased 23.9 percent to 1.12 euros.

Operating income before D&A, or OIBDA, was 11.41 billion euros compared to 13.8 billion euros, last year. OIBDA stood at 14.93 billion euros excluding non-recurring impacts. In organic terms, OIBDA increased 3.6 percent.

Revenues were 47.22 billion euros, 8.7 percent higher than last year on a reported basis and up 4 percent organically, driven by T. Hispanoamérica and T. Brasil and mobile data revenues.

Total accesses at December grew 2 percent year-on-year to 322.3 million, underpinned by Telefónica Hispanoamérica.

Mobile accesses stood at 247.1 million, down 1 percent year-on-year, affected by the more restrictive calculation in of the prepay base in T. Brasil. Smartphones reached 112.9 million after growing by 1.4 times compared to last year.

Retail broadband accesses totaled 21.0 million, 19 percent higher, and total Pay TV base reached 8.3 million, 12 percent more in organic terms.

Further, the company said the 2016 dividend is set at 0.75 euros per share, payable in cash subject to the closing of the O2 UK sale.

In Spain, Telefonica shares were trading at 9.16 euros, down 2.78 percent.