Net profits at Telefónica, the euro zone’s most valuable telecoms group and the parent of O2, fell by more than a quarter last year as it was buffeted by a sharp recession at home and several large writedowns but said it expected to increase revenues in 2013 as its restructuring efforts took hold.

Telefónica said that net profit for 2012 fell by 27.3 per cent to €3.92 billion as it was forced to write down the value of its stake in Telecom Italia and its business in Ireland as well as taking a hit on a devalued Venezuelan bolivar earlier this year. Without those adjustments, the company said it would have earned €6.46 billion in net profit over the year.

Analysts’ reaction was broadly positive, with most viewing signs of improvement in the Spanish market as encouraging. – Copyright The Financial Times Limited 2013