Telefonica chairman and CEO Jose Maria Alvarez-Pallette (pictured) claimed validation for the operator’s strategies after it recorded a fivefold annual rise in net profit for 2021.

The operator’s performance was boosted by capital gains from a sale of Telxius mobile towers and the merger of its O2 UK unit with Liberty Global’s Virgin Media to create a new industry heavyweight.

Discussing its earnings, Alvarez-Pallette said Telefonica had “once again delivered on all its targets” during the year and would continue its transformation into the “new Telefonica” based on a strategic plan announced in 2019.

For 2022, Telefonica is targeting low single-digit organic growth in revenue and OIBDA, and a capex-to-sales ratio of up to 15 per cent.

Telefonica predicted an improvement in its competitive position this year, citing the acquisition of Oi Group’s mobile assets in Brazil; a simplification of its portfolio in Latin America including the sale of units in Costa Rica and El Salvador; and recent spectrum acquisitions in the UK, Spain and Brazil.

Net profit hit €8.1 billion in 2021, on revenue of €39.3 billion, up 2 per cent.

Alvarez-Pallete noted the group “significantly reduced net debt”, down €9 billion to €26 billion, with the company also highlighting growth for its Telefonica Tech unit after a 33.6 per cent rise in revenue to almost €1 billion.

Telefonica Infra sold the Telxius tower business in 2021 and also created new fibre vehicles in Germany and Brazil, which “are already generating growth opportunities”.

The group reported broadly flat revenue in Spain at around €12.4 billion, with mobile subscribers down 2.6 per cent to 18.5 million and FTTH up 5.1 per cent to 4.9 million.

German revenue grew 3.1 per cent to €7.8 billion, with Virgin Mobile O2 recording a 1.2 per cent decline to €12 billion.

In Brazil, the figure fell 6.9 per cent to €6.9 billion.