Telefonica 2012 Results Hurt by $585 Million on Bolivar Assets
Telefonica SA, updating its finances after the currency devaluation in Venezuela, said last year’s results were hurt by a pretax loss of 438 million euros ($585 million) from its foreign-currency position in bolivars.
Because the devaluation decision was made after the end of 2012, there was no other impact on last year’s results, the Madrid-based phone carrier said yesterday in a statement. The value of Telefonica’s net assets in Venezuela dropped by 1 billion euros because of the government’s decision this month to lower the bolivar to 6.3 per dollar from 4.3, Telefonica said.
Consumers rushed to stores in the days before the Feb. 13 devaluation to buy airline tickets and TVs on concern the weaker bolivar would fuel the fastest inflation rate in Latin America. It’s the fifth time in nine years that President Hugo Chavez has weakened the exchange rate.
Telefonica’s reports of cash flow and financial results from Venezuela will reflect the new exchange rate as of Jan. 1, 2013, the company said. Its shares fell 2 percent to 9.75 euros yesterday in Madrid.
The company is scheduled to report its full-year 2012 results on Feb. 28.
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