Telefonica Q1 results fall on negative forex impact

Telefonica reported a drop in first-quarter results due to negative currency effects, but said its underlying growth rates were improving. Revenues fell 6.6 percent to EUR 10.784 billion, as growth in Spain was offset by lower results in Germany and Latin America. OIBDA declined 6.7 percent to EUR 3.376 billion, giving a stable margin of 31.3 percent.

Telefonica said revenues were still up 3.4 percent year-on-year on an organic basis, led by 11.3 percent growth in Latin America and 19.9 percent higher mobile data revenues. Data increased to 48 percent of mobile service revenue, up 7 percent points year-on-year. Mobile data traffic was up 51 percent year-on-year, driven by 15 percent of customers now on LTE. OIBDA was also higher on an organic basis, up 5.4 percent, thanks to growth in Brazil (+8.2%) and Spain (+2.0%).

Net profit fell 56.9 percent to EUR 776 million, due mainly to a one-time tax gain in the year-earlier period. Capital expenditure was down 10.6 percent to EUR 1.503 billion, and operating cash flow declined 3.3 percent to 1.873 billion. Telefonica’s net debt increased by EUR 292 million in the quarter to EUR 50.21 billion, due mainly to shareholder remunerations and early retirement settlements with employees. Leverage was at 3.02x OIBDA.

Telefonica maintained its outlook for full-year revenue growth of at least 4 percent and a stablising OIBDA margin. This excludes O2 UK and the Venezuela operations and is based on constant exchange rates. On this measure, the company’s revenues were up 8 percent in Q1.

Brazil crisis: Rousseff may appeal to trade bloc over impeachment

Ms Rousseff has described the impeachment effort against her as a coup

Brazil’s President Dilma Rousseff has said she could ask the South American trade bloc Mercosur to suspend the country if she is removed from office.

Ms Rousseff has repeatedly described the impeachment process as a political coup by her rivals to oust her.

She is accused of manipulating budget figures ahead of her re-election in 2014, but has denied any wrongdoing.

Mercosur has a provision which can be triggered if the elected government of a member state is overthrown.

It could lead to a series of sanctions by the bloc against the country, including trade benefits.

“I would appeal to the democracy clause if there were, from now on, a rupture of what I consider democratic process,” she told reporters in New York.

Read the full article on the BBC.

America Movil profit drops as Mexico competition grows

The America Movil logo is seen on the wall of the reception area in the company’s corporate offices in Mexico City August 12, 2015. REUTERS/Henry Romero 

America Movil said on Wednesday first-quarter profit fell more than 40 percent from a year ago, as mobile competition from AT&T Inc intensified in Mexico and it started paying rent on cell towers after a sweeping regulatory overhaul.

The 2013 overhaul was aimed at curbing America Movil’s 70 percent market share in Mexico by forcing it to share cell towers and other equipment with rivals, and letting them connect calls to its network for free.

The company, which had long dominated Latin American telecommunications, was pressured to spin off its cell towers in 2015 into a new company, which it now pays rent to. AT&T, which had been America Movil’s partner for more than two decades, entered Mexico’s market on its own in late 2014 by buying up the No. 3 and No. 4 carriers.

America Movil, controlled by the family of billionaire Carlos Slim, said in a statement that the margin on its Mexico earnings before interest, tax, depreciation and amortization (EBIDTA) hit a new low of 35.7 percent in the first quarter. The margin has fallen every quarter since the reform.

Read the full article on Reuters.

GE announces Rogerio Mendonca to lead GE Oil & Gas Latin America

GE has announced that Rogerio Mendonça will be the President and CEO of GE Oil & Gas Latin America. Effective May 1, he will be responsible for driving business results in the region, deepening the relationship with customers, advancing local capabilities and leading the 4,500 employees.

Rogerio joined GE in 2000 and held different positions in commercial, sales, services and business operations. In 2013 he was appointed President of GE Transportation in Latin America with responsibilities for all the operation, leading the team to record levels of operational excellence and financial results; through a solid growth plan including product localization, new product development and introduction, long term alliances and strategic service deals.

Prior to GE, Rogerio worked for AB-Inbev leading the commercial operations of the food and beverages company in Brazil. He holds a bachelor degree in economics and international trade, from the Federal University of Minas Gerais, Brazil, also a postgrad in Marketing from Berkeley, California University – USA

“With the discovery of the pre-salt reservoirs in Brazil, the opening of the Mexican market to new players as part of the Energy Reform, the largest oil reserves in the world in Venezuela, the new deep water discoveries in Colombia and some of the largest unconventional resources in the world in Argentina, Latin America is a region with growing importance to GE as our customers are looking for the best minds and machines to optimize their operations, and we are leveraging our diverse offering and digital expertise; which we believe is the key to unlocking that opportunity,” said Rogerio Mendonça.

This article first appeared on Penn Energy.

Latin Trade Presents The Top Billionaires in Latin America Ranking

MIAMI, April 26, 2016 /PRNewswire/ — The number of billionaires in the region dropped dramatically to 69 in April, from the 100 names in the previous year. The fall is a testament to the magnitude of the Latin American economic slowdown, brought about by lower commodity prices, slower growth in China, and by localized issues such as Brazil’s political crisis.

The biggest fortunes were hit hard. Case in point is Mexico’s Carlos Slim, with an estimated fortune of $50 billion, down 35%, from the $77.1 billion last year.

Another example from Mexico is Ricardo Salinas Pliego, founder and chairman of Grupo Salinas (TV Azteca, Elektra, Banco Azteca) who saw his wealth fall almost by half from $8.2 billion last year, down to $4.3 billion this year.

In Brazil, one of the biggest drops was for the Marinho family (Rede Globo) -Joao Roberto Marinho, Jose Roberto Marinho and Roberto Irineu Marinho- with a 47.5 percent plummet in their fortune, from $8.2 billion in 2015 to $4.3 billion this year.

But there were others who, despite the difficulties in the region, managed to increase their fortunes. For example, the fortune of Jorge Moll Filho, the founder of the biggest hospital chain in Brazil, shot up 88%. Joining him with one of the top growth rates is Mexico’s David Peñaloza Alanis, chairman and CEO of infrastructure construction company Pinfra, with a 25% growth in his fortune.

The total fortune of the 69 magnates on the list reached $299.2 billion, that’s $4.3 billion per head, a dash more than the $4.2 billion per head from 2015.

To view the whole list and see how each billionaire’s fortune changed, visit:

About Latin Trade

Latin Trade is a leading provider of information and business services to companies operating in Latin America. It publishes award-winning content in Spanish and English for distribution throughout Latin America, the Caribbean and the United States through print and online media. Latin Trade publishes Latin Trade magazine and

This article first appeared on PR Newswire.

Outside experts condemn Mexico’s inquiry into 43 missing students

Inter-American Commission on Human Rights cites errors and omissions in official investigation and points to signs of torture used against suspects


Outside experts investigating the September 2014 attacks on 43 trainee teachers delivered a devastating final report on Sunday, finding inconsistencies, errors and omissions in the government’s official investigation, along with evidence of suspects being tortured.

The five-member expert team from the Inter-American Commission on Human Rights (IACHR) also accused the federal government of failing to fully cooperate with their investigation and of allowing a smear campaign to assail their work in an attempt to discredit the final report and harass them out of the country.

“In a context of strong polarization in Mexico, the [IACHR team] has become an object utilised by some to generate greater polarisation,” the team said in its final report, delivered to a packed audience of the students’ families and civil society groups. The audience shouted back: “Don’t leave!”

Absent from the presentation were the Mexican public officials responsible for human rights, whose chairs remained empty through the two-hour reading of the report. It was another a sign of the strained relations between the Mexican government and IACHR, which in recent months encountered a spate of unflattering stories in publications sympathetic to the president and his party. The group even had its executive secretary investigated by Mexican prosecutors for mismanaging public moneys, allegations that were later found baseless.

“The group has suffered a campaign trying to discredit people as a way to question their work,” the report read. “Certain sectors are not interested in the truth.”

Read the full article on The Guardian.

Latin America’s Foxy Leaders

 “Every country gets the leaders it deserves,” the French counter-revolutionary Joseph de Maistre quipped. He was wrong. The countries of Latin America did not deserve the blustering demagogues and iron-fisted generals who, until recently, often occupied the seats of government.

A look at Venezuela or Nicaragua reminds us that the demagogues and the populists are not yet gone. But a new kind of leader – moderate, intellectually humble, and prone to gradualism – has been in ascendance since the 1990s. This is the kind of leadership Latin America does indeed deserve.

Read the full opinion by Andrés Velasco on Project Syndicate.

Odebrecht selling 55 percent stake in $5 billion natgas Peru pipeline

Odebrecht SA, the engineering company at the center of a massive graft probe in Brazil, is selling its 55 percent stake in a $5 billion natural gas pipeline project in Peru, the pipeline manager told Reuters on Friday.

David San Frutos said international creditors interested in financing $4.1 billion of the project had asked that it have no links to Odebrecht or the corruption probe in Brazil, known as “Operation Car Wash.”

Spanish utility Enagas SA, which now controls 25 percent of the project, is interested in buying 6 percent of Odebrecht’s stake, said San Frutos, who heads Enagas’ Peru unit.

“The remaining 49 percent will be acquired by another company or other companies” but must be approved by both Enagas and the project’s other junior partner Grana y Montero SAA, San Frutos said in an email.

Odebrecht Latinvest, the company’s investment unit for Latin America, said in a statement that it was evaluating proposals and declined further comment.

Enagas and Grana y Montero, which owns 20 percent in the pipeline concession, took over management of the project last month to distance it from the probe in neighboring Brazil, where the former head of Odebrecht has been convicted of bribery, money laundering and organized crime.

Odebrecht is selling billions in global assets, including a hydroelectric dam and a road concession in Peru, to raise capital as it grapples with rising debt in the wake of the corruption scandal, its chief executive told Brazilian newspaper Folha de S.Paulo in an interview published April 1.

Read the full article on Reuters.

Brazil’s Oi starts $14.3 billion bond restructuring talks

A woman stands next to the logo of Brazil’s largest fixed-line telecoms group Oi, inside a shop in Sao Paulo October 2, 2013.

Oi SA on Monday formally started talks to restructure $14.3 billion of bonds, pitting some of the world’s biggest investors against each other as Brazil’s most-indebted phone carrier fights for its survival.

In a securities filing, Oi said a group of bondholders that have Moelis & Co as their advisor signed a non-disclosure agreement to join talks. Reuters, citing sources, said the group of over 25 investment firms including BlackRock Inc, Citadel LLC and Pacific Investment Management Co, could sign the accord as early as Monday.

The decision to begin talks with the Moelis-advised group leaves unclear how, or whether, Oi will negotiate with other creditors such as hedge funds that have bought credit default swaps linked to Oi’s bonds. The carrier wants to negotiate with bondholders who “care about the company’s future,” one of those sources told Reuters.

At stake is the fate of Oi, the byproduct of a state-sponsored merger eight years ago and the only Brazilian carrier controlled by domestic capital. Shareholders see a restructuring facilitating a potential takeover of Oi, which they say could help narrow the gap with rivals controlled by Spain’s Telefónica SA and Mexican billionaire Carlos Slim’s América Móvil SAB

Read the full article on Reuters.

Pacific Alliance and Mercosur: Moving at Two Speeds?

Spanish bank BBVA sees the Pacific Alliance gaining ground while Mercosur slipped into reverse.

Latin America’s economy is moving at two speeds, according to the Spanish bank BBVA, as the Pacific Alliance gaining ground as Mercosur, the Common Market of the South, slipped into reverse in 2015 and on into 2016.

In its first-quarter 2016 outlook, BBVA lowered its forecast for global GDP growth in 2016 to 3.2 percent, foreseeing a more robust recovery only towards the end of 2017. Following on the depressed global outlook, BBVA’s 2016 growth projections for all Latin American countries except Peru (where the impact of El Niño is less than anticipated) received downward revisions.

BBVA projects the Pacific Alliance—Chile, Colombia, Mexico and Peru—will achieve somewhere between two percent and 2.5 percent growth in 2016. This is less than in 2015, and still below the trade bloc’s potential, which the bank puts at 3.8 percent. But the growth rate should improve as 2016 ends and 2017 begins.

Read the full article here.

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