Telefónica is the large European company most affected by the … – Financial Journal

Financial Journal

The European exporters have brought benefits to the fall of the euro, already extended by a year, and has boosted its revenues and profits. However, some people do not take cheerful accounts. Are companies that receive a high proportion of their income from Brazil, the depreciation of the real

The Brazilian currency is the only major currencies has weakened against the euro this year. After rising in the first weeks of 2015, the real began to descend on January 23, and has since accumulated a fall of 18%.

Telefónica is one of the major European companies who obtain 20% or more of their total income in Brazil, according to Bloomberg data.

The Spanish operator leads the group by market capitalization and the amount of sales from that country.

the same situation of “disadvantage” are Spanish insurer Mapfre and French retailer Carrefour.

Betting Brazil
“A weaker real is a problem for Telefónica “he told Bloomberg Andrés Bolumburu, an analyst at Banco Sabadell. “Yes, low debt as income with an actual minor, but ultimately have less money to take home,” he said.

Telefónica generates 23% of its revenues in the largest economy South America, but it will increase at a time when the operator said the disbursement of EUR 7,450 million (US $ 8,100 million) to acquire broadband provider GVT by Vivendi.

Although the price purchase is covered, future earnings are not, meaning that a real depreciated means fewer euros to return to Spain, and less cash to pay dividends.
Actual now trades at about 3.5 per euro, and forward market operators expect a drop to 3.82 by the end of this year, according to data compiled by Bloomberg.

GVT and Telefónica Brazil generated a total of 40,500 million reais (US $ 12,500 million) in revenue and 12,600 million in earnings before interest, taxes, depreciation and amortization (EBITDA) last year. Every 1% depreciation of the real against the euro in the quarter may result in a fall close to 0.22% in total revenues of Telefónica, according Erhan Gurses, an analyst at Bloomberg Intelligence.

The real is the currency that has fallen against the dollar by political and economic Dilma Rousseff problems

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