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Telefónica gives in to the decline of the Ibex and stumbles before 4 euros after doubling profits

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Telephone yields to the general decline in securities listed on the Spanish stock market on the day it publishes quarterly accounts. The company suffers decreases of 0.46% up to 3.92 euros per share at the close of this Thursday. And that the session began with increases of more than 3.5% that placed its graph of return to the key level of 4 euros per share.

The first hour comeback found arguments in the increase of the earnings per share from 0.06 euros a year ago to 0.15 euros from the close of the first quarter of this year. Numbers that in group terms translate into net earnings of 886 million euros.

The amount published this Thursday more than double the 406 million euros in the first quarter of 2020, since it represents 118.3% more. This is reflected in the balance sheet that the company has sent this Thursday to the National Securities Market Commission (CNMV).

Account keys

Despite the turnaround in the stock market, analysts emphasize that these numbers confirm that the multinational has continued resisting the impact of the pandemic and meeting operational objectives focused on cost reduction and cash flow stability. In this sense, revenues fall less than the market average, even if the impact of your operations on Latin America, where currencies continue to depreciate significantly.

The president of Telefónica, Jose Maria Alvarez-Pallete, has highlighted that “these results reflect the success of the strategic plan and the execution capacity to achieve sustainable and profitable growth”. In addition, he mentioned the importance of contribution of its technology businesses, something that has also fallen in favor among market players.

The first reactions of the analysts were concentrated in the debt chapter, the great pending issue of the company. In this sense, Telefónica managed to keep reducing its leverage. Financial debt was reduced to 35,796 million euros, 6.4% less than a year before.

In addition, it has been anticipated that, when the operations pending closure are completed, the debt will be reduced by approximately another 9,000 million additional euros, towards around 26,000 million euros, half of the existing in mid-2016.

Confident dividend

Similarly, Telefónica has confirmed its dividend. It will pay the second tranche of the 2020 dividend (of 0.20 euros per share) in June 2021, through the modality of voluntary flexible dividend.

In 2021, it plans distribute 0.30 euros per share distributed in two tranches. The first will be payable in December of this year, while the second will be paid in June 2022. Both payments will be 0.15 euros, again under the modality of voluntary flexible dividend, which allows payment in shares for investors who so they wish.

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