MADRID Feb 11 Venezuela's currency devaluation
is likely to take a heavier toll on Telefonica and BBVA
than other Spanish companies, shrinking the value of
their dividends and assets in the country by as much as a third.
Both are major players in Venezuela, which said on Friday it
was devaluing the bolivar to 6.3 per U.S. dollar from 4.3 per
dollar from Feb. 13 in an attempt to shore up government
Telefonica's shares were down 1.3 percent at 9.9 euros at
1621 GMT, while BBVA was down 0.8 percent at 7.3 euros.
Telefonica is waiting to repatriate dividends worth 1.01
billion euros ($1.35 billion), which will now be worth 691
million euros, Banco Sabadell analysts estimated.
Bank BBVA has been unable to repatriate dividends from
Venezuela in recent years. It has assets there worth 20 billion
euros through its 55.6 percent stake in Banco Provincial, which
will now be worth 13.6 billion euros.
Venezuela accounts for 9 percent of BBVA's operating profit,
according to the lender's 2012 accounts. Banesto Bolsa analysts
said the 32 percent currency devaluation could reduce the value
of the BBVA group as a whole by 1.7 percent, without taking into
A BBVA spokesman said the currency move would have a "very
moderate" effect on the company's capital.
"The impact as far as profit and loss goes will hardly be
noticed in 2013 because the bank in Venezuela has positions in
dollars that basically compensate for the impact of the
devaluation," he said.
Telefonica, Europe's biggest telecoms operator by revenue,
is also the telecoms market leader in Venezuela and generates
6.5 percent of its operating income in the country, according to
its results from the third quarter of 2012.
Morgan Stanley forecast a 2 percent hit to Telefonica's
operating income. The company declined to comment on the impact
of the devaluation.
Many Spanish companies expanded into Latin America in the
1990s, taking advantage of shared language and cultural
connections but leaving them open to currency and political
risk. Last year, the Argentine government expropriated oil firm
YPF from Spain's Repsol.
Morgan Stanley said the European companies most likely to be
affected by the devaluation were Spanish insurer Mapfre
, oil firm Repsol, BBVA and Telefonica, as well
as French companies Sodexo and Edenred.
Edenred said the bolivar devaluation would dent its revenues
by 1.3 percent.
Mapfre generates 3 to 4 percent of profits in Venezuela,
Morgan Stanley said, while Repsol was likely to see a low
single-digit hit to its valuation and earnings.
A Spanish news outlet reported on Monday that Telefonica had
scrapped plans to float its Latin American businesses.
($1 = 0.7474 euros)
(Reporting by Robert Hetz and Clare Kane; Writing by Clare
Kane; Editing by Louise Ireland and Tom Pfeiffer)