CANTV reverses last year’s losses

27 Oct 2006

Venezuela’s dominant telecoms operator CANTV yesterday reported third-quarter net profits of USD216 million compared with a year-earlier net loss of USD203 million, despite the cloud hanging over it following recent government threats to nationalise the company. The profit turnaround reflected higher EBITDA and income tax benefits, the company said in a statement. The income tax benefits were mainly attributable to the recognition of 2005-06 investment tax credits, it said, whilst the previous year’s losses were mainly due to pension funds payment obligations. In the quarter ending September, CANTV saw year-on-year subscriber gains in the mobile and broadband sectors of 68.9% and 61.6% respectively. At the end of the period under review its mobile unit Móvilnet had some 6.8 million subscribers, whilst it claimed 3.7 million fixed line telephony customers.

CANTV, majority owned by US-based Verizon Communications, has been told by the Supreme Court to bring pension payments in line with the minimum wage, and President Hugo Chavez has threatened to nationalise it if it fails to comply. The telco says it is waiting to learn how much it still has to deposit in backlog payments for worker pension funds. Earlier this month the regulatory authorities extended to 29 December the deadline for Mexican telcos Telmex and América Móvil to acquire Verizon’s shares in CANTV.

Venezuela, CANTV