- Telefonica recorded a net loss of €1 billion in Q4 2024 due to €2 billion in writedowns in Latin America.
- The company plans to sell its Argentine unit for $1.25 billion, facing antitrust scrutiny from the Argentine government.
What happened: Telefonica’s financial results and strategic shift
Telefonica, the Spanish telecommunications giant, reported a net loss of €1.003 billion in the fourth quarter of 2024, primarily due to €2 billion in writedowns across its Latin American operations. The largest writedown, amounting to €1.27 billion, was recorded in Argentina, with significant charges also in Chile (€397 million) and Peru (€108 million). These impairments reflect Telefonica’s ongoing efforts to reduce its exposure to volatile Latin American markets and focus on core markets in Europe and Brazil.
Despite these challenges, Telefonica’s full-year revenue increased by 1.6% to €41.3 billion, driven by growth in Spain, Brazil, Germany, and the UK. The company’s adjusted net profit for 2024 was €2.3 billion, exceeding analysts’ expectations. However, the fourth-quarter writedowns led to a full-year net loss of €49 million.
Telefonica’s strategic shift is evident in its decision to sell its Argentine subsidiary to Telecom Argentina for $1.25 billion. This move has prompted the Argentine government to launch an antitrust investigation, citing concerns over potential market monopolisation. The company also plans to sell its operations in Colombia, Guatemala, and Costa Rica, further reducing its Latin American footprint.
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Why it’s important
Telefonica’s financial results highlight the challenges of operating in volatile markets and the need for strategic realignment. The writedowns in Latin America underscore the company’s decision to focus on core markets in Europe and Brazil, where it can better manage risks and drive growth. This shift is crucial as Telefonica aims to reduce debt, invest in 5G technology, and navigate intense market competition.
Telefonica’s 2024 performance also reflects its commitment to delivering on financial targets, with revenue and EBITDA growth in key markets. Looking ahead, the company expects organic growth in revenue and adjusted EBITDA for 2025, with continued focus on reducing leverage. This strategic approach positions Telefonica to maintain momentum in its core markets while navigating the complexities of the global telecommunications landscape.
