Shares in Spanish incumbent Telefonica took a tumble yesterday after Venezuelan president Hugo Chavez devalued the country’s currency in relation to the US dollar by 50%.
The devaluation will have a significant impact on the telco as Venezuela accounts…
Shares in Spanish incumbent Telefonica took a tumble yesterday after Venezuelan president Hugo Chavez devalued the country’s currency in relation to the US dollar by 50%.
The devaluation will have a significant impact on the telco as Venezuela accounts for some 7% of Telefonica’s total revenues and is its second largest asset in the Latin American region.
It is believed that this could cause Telefonica’s revenue to fall by up to E2bn, but despite this, Telefonica has reiterated its earnings targets. The telco stated that it will still meet its guidance for 2010 of earnings per share of E2.10.
Chavez said that Venezuela will increase its official bolivar peg from 2.15 bolivars to the dollar to 4.3 bolivars to the dollar.
