Telefónica, weighs farewell bill for Latin America but 2026 targets confirmed

Telefónica is changing its skin, but the bill from its Latin American past keeps coming up at the till. The Spanish group closed the first quarter of 2026 with a net loss of 411 million: much less than the 1.304 billion red of a year earlier, but still enough to remind us that the exit from 'Hispam' is not painless. Divestments in Chile, Colombia and Mexico weighed 798 million. On net, operating profit was 386 million.

The industrial reading is more nuanced. Revenues were 8.127 billion, down in the accounting figure due to the lighter perimeter, but up 0.8% at constant exchange rates. Adjusted Ebitda rose 1.8% to 2.836 billion, with the margin at 34.9%. The group thus confirms its 2026 guidance: revenues and Ebitda between 1.5% and 2.5%, free cash flow around 3 billion and capex on revenues at 12%.

The most visible game remains debt. At the end of March, net debt fell to EUR 25.342bn: 1.5bn less than in December and 6.3% below the level of a year earlier. Leverage dropped to 2.72 times and the company confirmed the cash dividend of EUR 0.15 per share for 2026, to be paid in June 2027, in addition to the second 2025 tranche of the same amount on 18 June. Free cash flow from continuing operations, at EUR 333m, remains impacted by seasonality.

However, the centre of gravity remains unequal. In Spain, the first market, revenues grew by 2%, to EUR 3.233 billion, and adjusted EBITDA by the same pace, to EUR 1.150 billion. Convergent churn fell to 0.7%, an all-time low, while Arpu rose to EUR 91.5. The mobile contract base exceeded 16 million for the first time. Brazil continued to be the engine of growth: revenues at +7.4%, Ebitda at +8.7%.

The weak point remains Germany. Here, revenues fell by 8.6% and EBITDA by 8.4%, squeezed by the migration of 1&1 customers and the weakness of the handset market. In the UK, Virgin Media O2 narrowed its net loss to GBP 30.5 million, despite revenues falling 6.5%.