Telefonica de Espana SA’s interim results, net profit up 4.7% at $406.2m on turnover up 6.6% at $5,246.8m, were helped by lower financial costs, down 12.8% to $715m, and Spain’s largest company can see this continuing into the second half as it continues to repay its foreign debts and refinance the balance at lower rates. Affiliates of the company represented 9.5% of group profits, with Telefonica Internacional SA-TISA largest at 6.6%. The Spanish economy has started to revive and consequently demand for Telefonica services was healthy in the first half: registered line requests up 7.6% to 600,000 and mobile phone demand up 69%. However data transmission services remained weak, and the drop in demand affected both circuit rental and Telefonica’s Iberpac packet service. The total number of lines in service at end-June, including mobile phones and Ibercom-equivalent lines, rose 4% to 14.9m, though the number of rented circuits fell 6% to 34,600. Average per line consumption was up 0.4% in the six months. The group also made substantial provisions for currency adjustments in the period, up 562% at $51m, and took a $199m extraordinary charge partly for early repayment incentives.
