Telefonica’s Net Income Soars Despite High Net Debt in Q1 2024

Telefonica CEO Jose Maria Alvarez-Pallete expressed excitement about the initial success of the company’s new strategic plan through to 2026. In the first quarter of the year, the operator saw a 79% increase in net income, reaching €532 million. Although revenue remained relatively stable at €10.1 billion, net debt rose by 7.7% to €28.5 billion, largely due to the acquisition of a greater stake in its German unit. EBITDA also grew by 1.9% to €3.2 billion. However, free cash flow, a crucial metric for its new Growth, Profitability, and Sustainability plan, was negative at €41 million.

The new strategic plan, unveiled in November 2023, aims for a 10% increase in free cash flow and a 2% rise in core earnings per year until 2026. Pallete noted that Telefonica had a strong start to the year, with the business reinforcing itself thanks to the implementation of a new roadmap and strategic plan, leading to improved revenue and commercial activity.

In addition to these financial figures, Telefonica announced a non-binding mobile network wholesale agreement with Romanian operator Digi Communications. The final agreement is expected to be disclosed in the coming weeks as their current deal is set to expire in September 2026.

Overall, Telefonica’s strong start to the year reflects well on its ability to execute its strategic plan effectively and achieve its goals for growth and profitability over time.