Spain's Telefonica, Europe's third-largest phone company, said its
April-June net profit jumped 70.4 percent to EUR 1.89 billion (roughly Rs. 13,384 crores) thanks to a recovery in its domestic market.
Total
revenues rose 12.3 percent to EUR 11.8 billion (roughly Rs. 82,834 crores) as Spain's economic
recovery boosted demand for packages of broadband, television and phone
services.
Telefonica has restructured its business in Spain by
investing in improved networks, raising prices and focusing more on
higher-spending clients, as it sought to reverse years of declining
revenues in its domestic market.
Fixed communications, which
include high-margin optic fibre and pay-TV contracts, grew on the
quarter, helping to offset a continued fall in its mobile phone
business, where it faces stiff competition from low-cost carriers.
The company said its home fibre network in Spain is the largest in Europe, with 12.5 million clients at the end of June.
Telefonica
chairman Cesar Alberta said the company's Spanish division "reached
revenue stabilisation" in May and June for the first time since December
2009.
The strength of the company's new growth cycle "is
generated on a solid foundation supported as it is by strong realised
investments," he added in a statement.
The Spanish economy, the
euro zone's fourth largest, rose by one percent in the second quarter
from the previous three months, according to preliminary figures from
the National Statistics Institute.
GDP was up 3.1 percent on an annual basis, it added in a report released Thursday.
Telefonica said its net profit doubled during the first semester over the same time last year to EUR 3.7 billion (roughly Rs. 25,971 crores).
The company raised its revenue growth forecast for the year based on its strong first-half results.
It said it now expects revenues to grow by over 9.5 percent, raising a previous forecast of growth of over seven percent.
Shares
in Telefonica were up 0.98 percent at EUR 13.84 (roughly Rs. 970) in early afternoon
trade while the Ibex-35 index of most traded Spanish shares was down
0.13 percent.
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