Telemar returns to profit, but debt swells

30 Jul 2004

Tele Norte Leste (Telemar) saw a dramatic improvement in the first six months of 2004, reversing last year’s net loss of BRL165 million (-USD45.2 million) to post a net profit of BRL78 million (USD25.7 million). Revenues for the six months ending 30 June were up 13.6% year-on-year to BRL3.8 billion, with EBITDA rising 3.7% to BRL1.55 billion. However, the company said that EBITDA margin was down three percentage points due to an increase in the cost of goods sold; costs and operational expenses increased 21.6% year-on-year. Net debt increased 22.7% to BRL7.36 billion, but the company said it had reached a number of agreements with creditors to reduce the cost on a number of facilities with the aim of reducing the debt pile to BRL6.3 billion by the end of the year.