Telefónica, Spain's leading telecommunications company, has announced a significant turnaround in its financial performance. The company reported a 75% reduction in losses, with a net loss of €411 million in the first quarter of 2026, compared to €1.304 billion in the same period last year. This improvement is attributed to strategic divestitures in Latin America and a focus on debt reduction.
In addition to reducing losses, Telefónica achieved revenue growth, with first-quarter revenues reaching €8.127 billion, marking a 0.8% increase in organic terms. This growth was primarily driven by strong performances in Spain and Brazil. In Spain, the company experienced a 2% increase in revenues, while Brazil saw a 7.4% rise.
The company's debt also decreased by €1.5 billion, bringing the net debt to €25.3 billion and reducing the leverage ratio to 2.72 times EBITDA. This financial strengthening is seen as a positive signal by investors, with Telefónica's stock price rising nearly 6% following the announcement.
These results reflect Telefónica's ongoing efforts to streamline operations and focus on core markets. The company has been divesting from non-core assets in Latin America, including the sale of businesses in Argentina, Peru, Uruguay, and Ecuador, which contributed to the reduction in losses.
Looking ahead, Telefónica aims to maintain this positive momentum by continuing to focus on its strategic plan, "Transform & Grow," which emphasizes operational efficiency and sustainable growth. The company has set a target of achieving annual revenue and operating income growth of between 1.5% and 2.5% for the period 2025-2028, accelerating to between 2.5% and 3.5% for 2028-2030.
These developments are significant for both investors and consumers, as they suggest a more robust and focused Telefónica that is better positioned to compete in the global telecommunications market.