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Mobiles boost Telefonica
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September 3, 2001: 6:55 a.m. ET
Spanish telco says wireless arm's growth offsets Lat Am difficulties
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LONDON (CNN) - Telecom operator Telefonica said higher income from mobile services offset a slowdown in its Latin American arm as first-half profit jumped.
The Spanish telecoms company reported a better-than expected 16 percent rise in first-half net profit to  1.15 billion ($1.05 billion) in the six months to June 30 from 989 million a year earlier.
With revenue rising 15 percent to 15.3 billion, earnings per share came in at 0.25, up from 0.29 in the first half of 2000. Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose more than 9 percent to 6.4 billion.
Analysts polled by Reuters had expected group profit to rise 5.4 percent and EBITDA to increase 6.2 percent.
Telefonica said in a statement its cellphone business had again provided the highest growth for the group, with its customer base swelling by more than 7 million in the preceding 12 months.
The company said the growth rate was slowing in comparison to the previous year as the mobile phone market in Spain approaches maturity. But it predicted the sector would continue providing the highest contribution to the group's customer base, with new markets opening in Latin America and Europe.
Latin America downturn weighs on results
A slowdown in Latin America had negatively affected results, but not to the extent that had been feared.
Nahum Sanchez, an analyst at brokerage Caja Madrid, told Reuters: "These are positive operating results, because the company has shown it is still capable of defending its high margins in Spain, which helps offset the slowdown in Latin America."
Telefonica said in a statement: "Despite the difficult macroeconomic environment in the region... telephony business in Latin America and particularly Brazil is performing better than expected and continues to be the biggest contributor to group."
Operating profit from the company's Latin American businesses edged up just 2 percent to 1.3 billion, while the mobile-phone unit delivered a thumping 34 percent increase to 923 million. That brought the mobile arm's contribution to the group almost up to the level of the Spanish fixed-line telephone division, whih raised its operating profit 22 percent to 1.06 billion.
Telefonica's shares fell 2.2 percent to 12.5 in late morning trading on the Ibex index, which was down 1.7 percent. 
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