Telefónica(TEF)2025-02-27 18:43Financial Position and Performance - Telefónica, S.A. reported non-current investments in Group companies and associates amounting to €49,650 million as of December 31, 2024[14]. - The audit opinion confirmed that the annual accounts present fairly the financial position and performance of Telefónica, S.A. in accordance with applicable financial reporting standards[7]. - The company is responsible for assessing its ability to continue as a going concern and must disclose any relevant matters[23]. - The audit and control committee oversees the preparation and presentation of the annual accounts[23]. - The management report for the 2024 financial year is consistent with the information contained in the annual accounts[21]. - Total assets decreased to €63,453 million, down 2.4% from €65,000 million in 2023[43]. - Equity decreased to €18,465 million, down 8.0% from €20,077 million in 2023[45]. - Non-current assets decreased to €55,304 million, down 4.2% from €57,729 million in 2023[43]. - Total recognized income and expense for the year was €503 million, down from €1,991 million in 2023[49]. - The company reported a net increase in cash and cash equivalents of €347 million in 2024, contrasting with a decrease of €321 million in 2023[52]. Revenue and Profitability - Total revenue for 2024 increased to €6,429 million, up 47.4% from €4,362 million in 2023[47]. - Profit for the year decreased to €223 million, down 89.6% from €2,153 million in 2023[47]. - The company experienced a profit before tax of €512 million in 2024, down from €1,129 million in 2023, indicating a decline of approximately 54.6%[52]. - Profit for the year improved from a loss of €574 million in 2023 to a profit of €209 million in 2024, marking a significant turnaround[97]. Impairment and Write-downs - A net write-down of impairment provision of €4,405 million was recognized in the income statement for the year[18]. - The company conducted an impairment test for its investments at least annually, or more frequently if necessary[15]. - Impairment losses on financial instruments increased to €4,480 million, up from €1,207 million in 2023[47]. - Impairment of investments in Group companies and associates rose sharply to €4,405 million in 2024 from €1,208 million in 2023, reflecting a substantial increase of 264.5%[52]. - Telefónica, S.A. recognized an impairment provision of €4,405 million in 2024, compared to €1,208 million in 2023, primarily affecting Telefónica Hispanoamérica, S.A.[140]. Cash Flow and Investments - Telefónica reported cash flows from operating activities of €4,547 million in 2024, a significant increase from €1,720 million in 2023[52]. - Cash flows used in investing activities were negative at €397 million in 2024, a decrease from positive cash flows of €1,761 million in 2023[52]. - Cash flows used in financing activities were €(3,762) million in 2024, slightly improved from €(3,834) million in 2023[52]. - The company plans to invest between 10% and 16% of revenue for business development in Brazil[147]. - The total loans to group companies and associates in 2024 amounted to €2,307 million, an increase from €2,057 million in 2023[155]. Shareholder Actions and Capital Structure - The company proposed a distribution of €563 million from its net profit for 2024, which will be allocated entirely to unrestricted reserves[73]. - Telefónica, S.A. launched a capital increase of €550 million on January 23, 2024, to fund the payment to shareholders from the voluntary public tender offer for Telefónica Deutschland Holding AG[116]. - The share capital of Telefónica, S.A. was reduced by €80.3 million through the cancellation of treasury shares, resulting in a new share capital of €5,670 million[189]. - The Board of Directors is authorized to increase the share capital by a maximum nominal amount of €2,596,065,843 within five years from the resolution date[197]. - The shareholders authorized the Board to issue securities, including preferred shares and warrants, with a maximum issuance limit of €25 billion[199]. Market and Economic Factors - Management's cash flow projections involved significant judgments regarding revenue growth, long-term EBITDA margin, and discount rates, which could be affected by future economic trends[17]. - The long-term EBITDA margin estimates for Telefónica Group in Brazil range between 41% to 44%, with a WACC of 11.5% after taxes for year-end 2024[147]. - The depreciation of the Brazilian real against the euro was 16.88%, negatively impacting the value of investments[148]. - In Chile, the discount rate (WACC) used for value calculations is 8.5% after taxes, with a perpetuity growth rate of 2.8%[150]. - The terminal growth rate for discounted cash flows is set at 1%, below the real terminal growth forecast for the UK economy[145]. Other Financial Metrics - Non-current borrowings increased to €3,206 million, up 23.7% from €2,592 million in 2023[45]. - Cash and cash equivalents increased to €5,015 million, up 7.4% from €4,668 million in 2023[43]. - The fair value of financial assets at fair value with changes through equity was €417 million at the end of 2024, down from €466 million in 2023[172]. - Trade receivables decreased from €500 million in 2023 to €265 million in 2024, primarily due to a reduction in tax receivables from €237 million to €23 million[184]. - The company recorded a favorable award of $380 million (approximately €365 million) from the Republic of Colombia, with accrued interest of $164 million (approximately €158 million) as of December 31, 2024[180][181].