Spanish telecoms giant Telefonica confirmed its 2022 outlook for revenues on Thursday after posting a better-than-expected net profit during the first quarter.
Over the first three months of the year, Telefonica made a net profit of 706 million euros ($742 million) as strong sales in Brazil and Germany made up for weakness in its domestic market.
The result was better than expected by analysts from financial data firm FactSet, who forecast a profit of 490 million euros.
The company posted a net profit of 886 million euros during the first quarter of 2021, due largely to favourable exchange rates and reduced operating expenses.
“Telefonica’s solid start to the year against a backdrop of inflationary tensions and geopolitical instability is evidence of the company’s strength in facing the most adverse situations,” said chairman and CEO Jose Maria Alvarez-Pallete.
The company said it “is on track to meet its full-year targets” of “low single-digit growth” in revenues and core earnings.
Revenues rose by 18.1 percent in Brazil during the first three months of 2022 compared to the first quarter of 2021, and by 5.2 percent in Germany.
The two countries each account for 18 percent of Telefonica’s revenues.
But revenues were slightly down in Spain, which accounts for 28 percent.
The group also said it had cut net debt 23.3 percent year-on-year to 27.5 billion euros.
Under a major restructuring that Telefonica announced in 2019, the company has focussed on the key markets of Brazil, Britain, Germany, and Spain, where it believes it can grow sustainably in the long term.