Spain's Moviles has bumper quarter

Telefonica Communications towers, Barcelona, Spain

MADRID, Spain -- Telefonica Moviles, Spain's dominant mobile phone operator, said profit soared as it signed up more than half-a-million new customers.

Net income rose a better-than-expected 85 percent to 287 million euros ($262 million) in the three months to March 31. Analysts polled by Reuters had forecast net income of about 237 million euros.

"The figures beat our expectations due to the strong results in Spain and Brazil,'' Sergio Gamez, telecoms analyst with Banesto, told Reuters.

Moviles's stock rose 1.5 percent to 7.01 euros in early Madrid trading on Monday. Although its shares have fallen more than 15 percent this year, they have not stumbled as much as its rivals like Vodafone and Orange, because it continues to buck the trend of slowing customer growth.

Moviles, which is 90 percent owned by Spain's Telefonica, said its total client base rose 21 percent year-on-year to 30.8 million. Of these 965,000 new clients, some 521,500 were in Moviles' key Spanish market.

With only 73.5 percent penetration, Moviles said there was still potential for growth in Spain.

Its Spanish unit, which makes up around 70 percent of group sales, said its revenues rose by 21 percent to 1.57 billion euros. Revenue for the entire company rose 16.6 percent to 2.26 billion euros.

Earning before interest, tax, depreciation and amortisation (EBITDA) rose 22 percent to 916.6 million euros.

But revenue in Latin America rose 8.7 percent as benefits from the acquisition of businesses in Mexico and Brazil were offset by currency losses in Argentina. The collapse of the Argentine peso wiped 15.9 million euros from profits and 145.5 million from reserves.