Telefonica beats Q2 forecasts, seeks to sell Colombia unit
By Inti Landauro
MADRID (Reuters) - Spanish telecom company Telefonica posted second-quarter profit and revenue ahead of forecasts on Wednesday and said it started talks to dispose of its Colombian unit to New York-listed rival Millicom.
The company reported net profit of 447 million euros ($483.83 million) on revenue of 10.26 billion euros and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 3.22 billion euros.
Net profit beat the 336 million euros expected by analysts according to a company-provided forecast, while revenue and EBIDTA were also higher than the respective forecasts of 10.05 billion euros and 3.17 billion euros.
"Growth has accelerated compared with the first quarter," Chief Executive Jose Maria Alvarez Pallete told Reuters. "We grew in all our large business units."
Telefonica said its performance in the January-June period put it on track to meet its targets for the full year.
Shares were down 1% in late morning trading in Madrid.
The company, which has already divested from many markets in Latin America, where returns were lower than capital cost, to focus on Spain, Brazil, Britain and Germany, also said it started talks with Millicom to sell its unit in Colombia.
Millicom, which provides telecom services in many countries in Latin America under the Tigo brand, said in a statement filed on Wednesday it would pay $400 million in cash for Telefonica's stake in the unit in the Andean country.
Telefonica's Chief Financial Officer Laura Abasolo confirmed the company was considering selling its 67.5% stake in Telefonica Colombia at the amount.
The agreement is non-binding, both companies said, and still requires the approval of regulators.
Telefonica has disposed of many assets over the past few years to raise cash to reduce its debt and finance the heavy investment needed to the roll-out of 5G technology.
($1 = 0.9239 euros)
(Reporting by Inti Landauro, editing by Sarah Young and David Evans)