Telefónica suffers 12.1% drop in revenues for Q3

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Operator group blames exchange rates as revenues rise slightly from Q2.

Telefónica Group, which has more than 341 million customers in Europe and Latin America, lost almost 5% off its share price when it announced its Q3 numbers. Its revenues fell by 12.1% year on year to €10.46 billion, which the group said was due to changes in currency exchange rates.

Revenues were up from the previous quarter by 1.2%, which saw lockdowns in many of the countries in which it operates.

In the first nine months of the year, revenues totalled €32,167m (down 10.7% over last year), although the company said the “organic” decline was 3.7% overall and only 2.5% in its four strategic markets.

Four key markets

In those four strategic markets: Spain accounted for 29% of total revenues in the first nine months, up to €9,209 million; Brazil contributed 18%, with €5,674 million; Germany 17%, with €5,509 million; and the UK 15%, with €4,966 million.

The rest of its properties in Latin America brought in 19%, with €5,988 million.

In its strategy announced at the end of last year, Telefónica indicated it would look for exit strategies in Latin America, apart from Brazil. It is "an impairment" of €785 million in Argentina that dragged the quarter into a loss.

Tech and Infra grow, Telxius doubles

All new business units continued to grow in the third quarter. Telefónica Tech's revenues increased by 15.4% to €1,113 million in the first nine months, as companies demand more technological and value-added services.

Telefónica Infra's revenues totalled €609 million, with the tower business growing by more than 20%. In the third quarter, Telxius, Telefónica's towerco, entered the first phase of acquiring towers in Germany, adding 6,000 sites.

Once the process is complete, Telxius will have a portfolio of 33,000 sites, doubling in size since its creation in 2016.