By Inti Landauro
MADRID (Reuters) -Spanish telecoms group Telefonica (BME:TEF) booked a 2.15 billion euro ($2.32 billion) net loss in the fourth quarter due to a write-off in Britain and the cost of a layoff plan in Spain, but said it still met its 2023 core profitability and revenue goals.
Speaking after the company released results on Thursday, CEO Jose Maria Alvarez-Pallete said it had seen "good momentum across (its) business units", with growth in Spain and "continued strength in Brazil and Germany".
The group reiterated its 2024 core earnings and revenue growth targets, and said it was maintaining its annual dividend at 0.30 euros per share. Its shares rose 1.5% in early trading in Madrid, against a 0.5% rise in Spain's main share index.
"Despite the company's accounting losses, the two impairments booked don't imply cash outflow," Javier Cabrera, stock market analyst with XTB, said in a note to investors.
Operating income, or core earnings, nearly halved during the fourth quarter from a year ago to 1.8 billion euros, while revenues were steady at 10.15 billion euros. Telefonica said that without one-offs, it would have booked a net profit of 730 million.
For the full year, core income dropped more than 11% to 11.39 billion euros, while revenues edged up to 40.65 billion euros from just under 39.99 billion in 2022, meeting Telefonica's own targets, it said.
The company still expects revenues to rise around 1% this year from 2023 and earnings before interest, taxes, depreciation and amortisation to grow between 1% and 2%.
Still, a net loss of 2.15 billion euros in the fourth quarter by far exceeded a company-provided market consensus of a 742-million loss.
During the quarter, the company booked a 1.15 billion euro exceptional cost to pay for a layoff plan in Spain and a 1.73 billion write-off on Virgin Media O2, its joint venture with Britain's Virgin Media.
Telefonica said the deteriorating economy in Britain and higher interest rates affected "estimates of future cashflow" and the value of derivatives the unit owns.
The company last month signed a deal with unions in Spain to lay off up to 3,400 employees in the country, a plan that would cost the company around 1.3 billion euros before taxes. The job cuts are expected to yield 285 million euros in savings each year from 2025.
($1 = 0.9214 euros)