UPDATE 1-Spain's Telefonica H1 core profit drops on weaker currencies

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MADRID, July 26 (Reuters) - Spanish telecoms group Telefonica on Thursday reported a fall in first-half core profit from a year earlier, as a recent uptick in its home market was cancelled out by weaker currencies in its key Latin American markets.

An improvement in business confirmed the telecom company’s strategy of aiming both ends of the Spanish market, which accounts for one third of its core earnings.

After having invested billions in high-speed networks, Telefonica is offering premium content to capture lucrative pay-TV customers, but also going back to basics with low-cost phone and internet offers to compete with cheaper rivals such as MasMovil and Orange’s Jazztel.

The Spanish company’s operating income before depreciation and amortisation (OIBDA) came in at 8.1 billion euros ($9.50 billion), compared with 8.18 billion euros last year. Its net profit rose to 1.74 billion euros from 1.6 billion euros a year earlier.

Devaluating currencies in Brazil, Telefonica’s second-largest market after Spain, other Latin American countries and Britain, squeezed its earnings.

The company maintained its target for a rise of around 1 percent in revenue this year, but is expected to boost its OIBDA margin by half a percentage point.

Dividends will remain unchanged at 0.40 euros per share, Telefonica said.

$1 = 0.8526 euros Reporting by Julien Toyer; Editing by Paul Day and Sherry Jacob-Phillips