June 14, 2021

Telefónica cites “the lack of agreements on key issues” among politicians as a risk for their business in Spain



Telefónica considers that “the lack of agreements on key issues” among Spanish political formations is one of the main “sources of uncertainty” for its business in Spain. As stated in the “financial risks” section of the 2019 annual accounts that the Spanish multinational has submitted this Thursday to the National Securities Market Commission (CNMV), one of the “sources of uncertainty” for its business in Spain It is related to the precarious majority of political forces in Congress.

Specifically, the company cites as one of the three main focuses of risk in Spain “the uncertainty about economic policies to be implemented from 2020 onwards, given the high existing political fragmentation and the lack of agreements on key issues.”

The notice comes after the formation of the new progressive government and after the two general elections held in May and November 2019. A year ago, before the holding of those elections, the company already warned in its accounts of the existence of ” some uncertainty about the economic policies to be implemented in 2019 “in Spain.

Asked about this issue at a press conference after the presentation of the results of the company, the president of Telefónica, José María Álvarez-Pallete, has indicated that with this comment they refer to his desire for “more degree of consensus” in around the “opportunities of digitalization in Spain”, at a time when the country enjoys the “technological leadership” of having 80% of the territory covered by fiber networks.

In this regard, he referred to the appointment of the Secretary of State for Digitalization and Artificial Intelligence, Carme Artigas, “leader in his area” as very positive news.

The company cites in its accounts another new risk factor in Spain related to the commercial war: “To be one of the most open countries from a commercial point of view and to be practically among the ten countries in the world that are the most emitting and receiving capital they make any protectionist reversal situation have significant implications, “says Telefónica.

Telefónica refers once again to “the situation in Catalonia” as a focus of uncertainty. Specifically, “its impact on the financing conditions of the Spanish economy given the demanding schedule of maturities facing the country and the country’s remarkable dependence on the stage and international investors.”

The company announced on Thursday that in 2019 it obtained an attributed net profit of 1,142 million euros, 65.7% less, which it attributed to several extraordinary elements, mainly the Individual Employment Suspension Plan (PSI) (voluntary retirement plan ) carried out in Spain during the fourth quarter and changes in its Mexican subsidiary. The results have been poorly received by investors. Telefónica’s price falls more than 4.5% after 13 hours.

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