Vivo swings into profit in Q4

9 Feb 2007

Brazilian mobile operator Vivo Participações, the joint venture of Portugal Telecom and Telefonica, posted a net profit of BRL885.6 million (USD423.2 million) in the three months to 31 December, reversing a loss of BRL263 million a year earlier, thanks in part to a restructuring exercise carried out in October. Vivo said EBITDA rose to BRL857.6 million, up from BRL650.1 million previously, thanks to the restructuring which resulted in an 11% dip in operating costs to BRL2.08 billion. In the full year, Vivo Participações reported a BRL16.3 million net profit, reversing a loss of BRL594 million in 2005, which it said was boosted by the corporate reorganisation and by taking advantage of tax credits from an acquired unit – Global Telecom.

Vivo signed up around 328,000 net new additions in the fourth quarter of 2006, to raise its subscriber total to 29 million. The company also reported some success in improving its customer mix. 81% of new sign-ups were post-paid users, helping boost blended monthly ARPU to BRL30.6, up 5.5% year-on-year. Quarterly churn rates remained stable at 2.5%, and minutes of use (MOU) were up 10.8% year-on-year at 82. Total traffic was also up 10.9%.