Italian writedown hits Telefonica’s first quarter net profit

Spain’s Telefonica has reported an almost 54% year-on-year drop in net income for the first three months of 2012, with the company noting that the bottom line had in particular been hit by a charge for a writedown of the company’s indirect 10.5% holding in Telecom Italia. With operating income falling by 17.8% against 1Q 2011, Telefonica noted that it had registered a loss from associates in the first quarter of 2012 of EUR481 million (USD630 million), compared to a EUR16 million loss in the corresponding period a year earlier, adding that the change was ‘mainly the result of the impact of Telco S.p.A.’s adjustment of the value of its investment in Telecom Italia.’ On the back of this loss, in 1Q12 the Spanish company’s net profit totalled EUR784 million, down from EUR1.624billion a year earlier

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OVETEL Italian writedown hits Telefonica’s first quarter net profit