Telefónica promises to meet its targets in 2026 after a year of multimillion-dollar losses

MadridThe sale of almost all subsidiaries in Latin America and the workforce reduction plan (ERE) that could result in the departure of more than 5,000 workers (the final impact is still being negotiated) have translated into a drag on Telefónica's 2025 results. Between January and December of last year, telecom The company, chaired by Marc Murtra, lost €4.318 billion due to the extraordinary impact of both factors, as reported Tuesday by the company to the Spanish National Securities Market Commission (CNMV). These are the largest losses in the last twenty years, but the company sees it as an essential step – albeit undoubtedly difficult to accept – to meet its new roadmap. The stock remained fairly stable throughout the day with slight declines.

"The Transform and Grow planIt's underway. More growth and greater profitability. And we're achieving this through optimization and focus, making progress in the markets. core [main] and complying with the guidance [future forecasts],” Murtra argued at a press conference, promising to meet the commitments set for 2026.

Broadly speaking, Telefónica's new strategic map involves applying “ironclad financial discipline,” in Murtra's own words. This has already translated into a dividend cut (it will be paid in 2027), but also into the implementation of workforce reduction plans and efficiency and simplification measures in which artificial intelligence will play an important role, among other things. There has been “progress” regarding the tone of regulators on the consolidation of the telecommunications sector, and in fact, Telefónica has just executed its first major acquisition to grow in Europe: it has partnered with two other firms to acquire the British company. Netomnia for 2.294 billion euros. Finally, it seeks to diversify the business: this is where defense and cybersecurity will come into play.

To address the workforce reduction plan, Telefónica has budgeted €2.049 billion, while the cost of divestments in Latin America amounts to €2.269 billion. The sales of Latin American subsidiaries impacting the 2025 results are those in Argentina, Peru, Ecuador, and Uruguay, while the exit from Colombia and Chile will be accounted for in 2026. Telefónica maintains its intention to also exit Mexico and Venezuela. "It's true that the situation in Venezuela has changed, but our roadmap [in the country] hasn't," said Murtra. The losses announced this Tuesday far exceed those recorded in 2024, when Telefónica lost €49 million, making them almost the largest losses the company has ever recorded. Specifically, these are the largest losses since 2002. Excluding these two extraordinary items, the adjusted net profit of those businesses that remain part of the group stood at €2.122 billion in 2025, 7.9% less than the previous year. Telefónica also reduced part of its debt, specifically €1.4 billion, bringing it down to €26.824 billion. Finally, the revenues of the telecom They grew by 1.5% to €35.12 billion.

"Exceptional" results in Spain

In Spain in particular, Telefónica's results were "exceptional," in the words of the company's CEO, Emilio Gayo. telecom It achieved revenues of €13.012 billion, a 1.7% increase. Earnings before interest, taxes, depreciation, and amortization (EBITDA) – which helps to assess a company's financial health – also grew slightly, by 1.1%, to €4.691 billion.

"Telefónica Spain is closing out an excellent 2025, with historic progress in commercial and financial terms," ​​Gayo stressed, highlighting that all annual financial indicators grew for the first time since 2008.