Telefónica Rides Out Latin America Write-Downs with Q1 Beat on Revenue

Spanish telecom giant Telefónica (NYSE:TEF) reported a €1.3 billion net loss in Q1 2025—roughly in line with analysts' forecasts—driven by non-cash write-downs on its Argentina and Peru divestments. Excluding those one-offs, however, the core business generated healthy operating profits and revenue modestly topped estimates.

Core Performance vs. Latin America Impact

• Net Loss: €1.30 billion (analysts: €1.32 billion)

• Latin America Write-Downs:

  • Argentina: €1.2 billion

  • Peru: €0.5 billion

• Underlying EBITDA: €0.43 billion (post-disposals)

• Revenue: €9.22 billion vs. €9.10 billion consensus (-2.9% YoY)

Telefónica's decision to exit lower-return markets in Peru and Argentina—selling its Argentine unit for $1.25 billion and offloading Peruvian operations at a steep discount—reflects its pivot toward high-growth regions: Spain, Brazil, the U.K., and Germany.

Focus on Financial Health and Ratings

With capital freed from Latin America, Telefónica can invest in 5G rollouts and fiber expansions in core markets. To gauge how the market rates Telefónica's balance‐sheet strength post write-downs—and compare it to peers—you can check its credit profiles and leverage metrics via the Company Rating & Information API, which tracks S&P/Moody's scores, debt levels, and coverage ratios in real time:
View Telefónica's Rating & Debt Metrics

What to Watch in 2025

1. Spain & Europe Capex: Will freed-up capital accelerate fiber and 5G deployments?

2. Brazil Growth: Latin America's largest market remains a key subscriber engine—monitor ARPU and churn trends.

3. Dividend Sustainability: Telefónica reaffirmed its annual payout; watch cash-flow conversion in H2 to confirm.

Despite the headline loss, Telefónica's Q1 underlying performance and strategic refocus on core markets position it to weather near-term volatility—and leverage growth opportunities in Europe and Brazil.