Telefonica’s net income in Q3 dropped 98.1 per cent year-on-year, as the Spain-based operator was hit by an impairment in Peru and negative foreign exchange movements in Brazil.

In an earnings statement covering the first nine months of the year, Telefonica reported Q3 net income had dropped from €502 million to €10 million, reflecting a non-cash impairment of goodwill and other tangible assets of €314 million in Peru.

Revenue declined 2.9 per cent to €10 billion, mainly due to the depreciation of the Brazilian real.

Service revenue fell 2.2 per cent and handset sales 9 per cent, however the company added its underlying performance in Spain, Brazil and Germany remained solid.

Despite the testing quarter, the company reiterated its full-year guidance of broadly flat revenue.

Telefonica was able to paint a more positive picture for the period from January to September, with revenue flat at €30.4 billion and net income of €989 million, a 21.7 per cent decline.

Jose Maria Alvarez-Pallete, chair and CEO, said Telefonica performed well during the nine months “against a global backdrop of uncertainty”.

New FibreCo
Separately, Zegona Communications announced a partnership between its Vodafone Spain subsidiary and Telefonica to launch a new fibre company in the country.

The joint venture will provide retail and wholesale broadband services in Spain, covering 3.6 million premises and provide fibre access to 1.4 million Vodafone Spain and Telefonica customers.

Telefonica will own 63 per cent of the business and Vodafone Spain the remaining 37 per cent.

A third-party investor will also be introduced in the first half 2025.