Telefonica profits drop 12pc amid job cuts

28th July 2004, Comments 0 comments

28 July 2004, MADRID - Spanish telecommunications giant Telefonica reported on Wednesday a 12-percent drop in net profits to the first half of the year after a sharp rise in costs associated with ongoing job cuts in its fixed-line operations.

28 July 2004

MADRID - Spanish telecommunications giant Telefonica reported on Wednesday a 12-percent drop in net profits to the first half of the year after a sharp rise in costs associated with ongoing job cuts in its fixed-line operations.

Net half-year profits came in at EU|R 1.25 billion while for April to June they were off 21.1 percent at EU|R 695.9 million, at the lower end of analysts' forecasts for the quarter.

The company said it had budgeted for a five-year fixed line job cutting programme which will see 2,362 posts shed this year alone of 15,000 to be cut by 2007.

"In June, Telefonica passed the totality of provisions earmarked for confronting job cuts due in 2004," a spokesman said.

Sales to June were up 5.6 percent at EUR 14.32 billion year-on-year.

Sales in Spain for the domestic market leader reached EUR 5.39 billion representing  a 2.2 percent rise, while those in Latin America advanced 4.6 percent to total EUR 3.27 billion.

Telefonica revenues rose 2.7 percent over the second quarter from 1.7 percent in the first, with ADSL clients rising sharply to 3.7 million from 1.9 million a year earlier.

Helping to boost group performance was a 14.2-percent rise in net profits unveiled on Tuesday by subsidiary Telefonica Moviles.

At the end of June Telefonica boasted 103.8 million customers, representing a 12.6 percent year-on-year rise. Of those clients, 55.8 million are with the mobile arm.

[Copyright EFE with Expatica]

Subject: Spanish news

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