UPDATE 1-Telefonica revenues drop in Q1, debt rises
* Q1 revenues down 9 pct y-o-y to 14.1 bln euros
* Debt rises to 51.8 bln euros at end-March
* Net profit up 21 percent to 902 mln euros (Adds details on debt, European peers)
MADRID, May 8 (Reuters) - Revenue dropped nine percent at Spanish telecoms company Telefonica in the first quarter, hit by unfavourable exchange rates in Latin America and weakness in Europe.
Revenues at the former Spanish monopoly were 14.1 billion euros ($18.5 billion), in line with analyst expectations.
The decline was less marked in Latin America, which accounts for over half the group's revenue, dipping 4 percent, compared with a 12 percent drop in Europe to 6.7 billion euros.
European peers like France Telecom, Swisscom and KPN also reported drops in revenue in the first quarter, with France Telecom hit by a price war in its home market.
Telefonica, which plans to cut debt to under 47 billion euros by the end of 2013, reported net borrowings of 51.8 billion euros at the end of March compared with 51.3 billion at the end of 2012.
The company said debt was hit by the devaluation of the Venezuelan bolivar and a 701 million euro investment in spectrum, but added that it was on track to meeting its 2013 target after shaving an additional 653 million euros from debt since the end of the first quarter to 51.2 billion euros.
Telefonica took steps to trim debt in the first quarter, including selling its treasury stock and disposing of 40 percent of its Central American assets.
First quarter profit rose 21 percent to 902 million euros, owing to better financing costs and a favourable comparison with last year when the company wrote down its stake in Telecom Italia. ($1 = 0.7642 euros) (Reporting by Clare Kane; Editing by Tracy Rucinski and David Cowell)
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