Murtra’s first results are solid, but his story is still weak

Telefónica has published The results of a first quarter That, on paper, I should satisfy the market:

• They rise income (+1.3% organic).
• They improve margins in their large markets: Spain, Brazil and Germany.
• Reduce debt.
• And reduces capex.

But the net benefit of continued operations falls 26% and the free cash flow is negative.

The result: a company that advances, but does not take off.

Yes, but. The accounting collapse defines it almost entirely Argentina’s departure and The flight of Peru: 1,731 million euros less. It was something anticipated.

However, it is not just an accounting issue: Telefónica grows less than cuts. And that weighs. The margin improves due to divestments, but not for a better exploitation of its assets. Of course, an important fact: Telefónica is winning more for each euro that invests, with a 0.4% growth in its operational profitability.

Between the lines. It is a latent paradox: Telefónica is worth less despite being more efficient than before. Win less, but manages better. Its fundamentals improve, but not their story. Neither does your quote, which has returned to maximum of the last three years But it still does not reach vertical takeoff.

The market seeks in a great telecus more than simple execution: wants vision, impulse, growth.

Marking Agenda. Telefónica Tech, the Division of Technological Developments to which the company is entrusted to be perceived as a technological And not as a simple teleco, it has grown again above the group (+6.6%) and its annualized billing already equals a median Ibex: 2.1 billion euros.

But Telefónica still does not break down its profitability or presenting it as an autonomous unit. So it is still relatively invisible. It is a promising active locked in an opaque showcase. It is its most aligned division with the future, but the least visible for analysts.

• There is a better showcase, or at least one clearer, for Telefónica Tech. Without an autonomous story or separate accounts, the market can hardly put a price.

In detail. In Spain, Telefónica has managed to consolidate what seemed unlikely: grow. Thus the good inertia continues Achieved by Emilio Gayo, promoted to CEO. Income and margin have risen around 2%, The terminals take off with almost 18% more, and the Churn –cancellation rate– It remains stable at 0.9% despite Price increases.

On the other hand, The agreement with Vodafone for FiberPass deployment It adds 3.65 million potential homes.

• The convergent ARPU (the average customer income of combined packages) rises to 92.3 euros, the largest in the group.
• That is the Premium user, the one who pays the most, and the one that costs the most.
• No other region where he has a telephone presence approaches an ARPU like this.
• Spain is no longer a ramora but an engine, the business breathes again at home.

The ARPU is, in any case, a company’s commercial health thermometer. And of its ability to revalue from within.

The big question. Why do you not revalue, if you run well? Possibly because execution without illusion is not enough. Because perceived growth matters as much as the real. And because without narrative, the numbers do not shine.

And that’s what it is about: to shine.

In Xataka | The EU has spent years fiercely fighting monopolies. Teresa Ribera has other plans for telecos

Outstanding image | Telefónica