Telefonica results fly in the face of slowdown

Spanish telco Telefonica boosted its profit by 39 per cent citing strong Latin-American profits and a booming mobile business as the main factors.

Unlike most of its European rivals, Telefonica has little debt as it financed most of its expansion through share swaps. Analysts have praised the company's strategy. Robin Duke-Woolley, analyst at Schema, said: "Their moves have been prescient, both in acquisitions and sales and IPOs. They caught the market while it was hot. "Their recent acquisitions have been share swaps and they floated Mobile at the right time. It sets them apart from companies like BT and Deutsche Telekom, which are so loaded with debt they don't know what to do." But Simon Buckingham, managing director Mobile Lifestreams, said: "They've won the battle, but it's a question whether they have won the war. There is consolidation on the way and the competition in Latin America is only just gearing up." The Spanish telco's turnover for 2000 was up 24.1 per cent on 1999 at £18.2bn with net profit up 38.5 per cent at £1.6bn. Telefonica's debt is about £16bn at 35 per cent of equity. The ratios for BT are double that with France Telecom being at 64 per cent and Deutsche Telekom at 61 per cent.