Telefónica closes 2023 with €892m loss due to impact of ERE and UK business.

Telefónica published its annual results for the 2023 financial year this Thursday. The year was marked by various extraordinary events in the last quarter, which caused the group to close the year with a loss of 892 million euros. These specific effects are provisions to cover the cost of ERE, which has been implemented in Spain and agreed with the unions, as well as an accounting review of its business in the United Kingdom, where it operates in a joint venture with Virgin.

In reports to the National Securities Market Commission, the group said that excluding these effects, it would have made a net profit of 2,369 million euros, representing an increase of more than 17%. In fact, until September, the group showed positive results, although slightly lower than the previous year.

The difference occurred in the fourth quarter, during which Telefónica recorded these two extraordinary impacts, among others. The group estimates the impact on the annual accounts of the reduction of the workforce in Spain at 1,185 million euros, which affects 3,421 employees and which is already covered by voluntary departures. On the other hand, it indicates that other extraordinary effects amount to 2,076 million euros, of which 1,786 million correspond to the accounting review of goodwill in the United Kingdom. The company explains that this is due to the increase in discount rates and macroeconomic conditions in the United Kingdom, which affects the estimation of future cash flows.

The accounting result actually contradicts the year when Telefónica closed with more revenue than the previous year. In particular, the turnover increased by 1.6% and amounted to 40,652 million euros. This increase, which meets the group’s goals for the year, is due to the increase in the sale of terminals and the improvement of the billing of services. In addition, it has increased the number of customers in all countries in which it operates, especially fiber.

As for the business alone in Spain, its home market, Telefónica closed the year with revenue growth of more than 3%, especially with sales of terminals in the country, which increased by 6.5%. In addition, the group highlighted some notes, such as the lowest rate of decline in the last 10 years and an increase in the number of customers, especially with 8,000 thanks to pay TV football.

Source: El Diario

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