Embratel posts Q3 loss

26 Oct 2006

Brazilian long-distance telecoms operator Embratel Participacoes reported a net loss of BRL324.2 million (USD150.8 million) in the three months to 30 September 2006, compared with net profits of BRL54.3 million in the same period of 2005, and BRL131.5 million in the second quarter. The company attributed the losses to a BRL514.5 million provision to cover tax liabilities for two of its operational units. On a more positive note, net revenues climbed to BRL2.06 billion from BRL1.87 billion year-on-year and BRL2.04 billion quarter-on-quarter. Sales from DLD services contributed BRL1.04 billion, unchanged on the previous year, and turnover from data transfer services was up 28% at BRL570.3 million, but revenues from ILD calls dipped 13.2% to BRL125.5 million. Embratel reported a pre-tax operating loss of BRL39.6 million, compared with a profit of BRL470.8 million in Q3 2005. EBITDA totalled BRL475 million.

Mexico’s Telmex, which owns 97% of Embratel’s voting shares and 45% of its preferred shares, has launched an offer to buy all of the Brazilian company’s outstanding stock.