CANTV’s net profits up by 427%; offers imminent for Telefónica's, others' shares

16 Feb 2007

Venezuelan fixed line incumbent CANTV has posted a 427% year-on-year rise in 2006 net income, from VEB214 billion (USD100 million) to VEB1.13 trillion (USD527 million), on revenues that rose by 33% from VEB5.09 trillion to VEB6.80 trillion, driven mainly by increases in mobile and broadband subscribers. EBITDA increased by 137% from VEB742 billion to VEB1.76 trillion. The company’s mobile unit Movilnet’s revenues were VEB3.24 trillion in 2006, an increase of 64% compared to VEB1.98 trillion in 2005. The number of mobile subscribers increased 53% year-on-year to

7.92 million by the end of December. Broadband revenues rose 33% in the year, from VEB656 billion to VEB874 billion.

Following the government’s earlier agreement to acquire US-based Verizon Communications’ 28.5% stake in CANTV, the telco said in its earnings statement that it will launch concurrent tender offers in Venezuela and the US for the state to acquire the remaining shares at not less than USD2.55 per share and USD17.85 per ADS, the same price paid to Verizon. The tender offer will be launched within 45 days of the 12 February agreement with the US telco, it said. The Venezuelan government is aiming to acquire at least 60% of CANTV, according to recent news reports. Spanish telco Telefónica is expecting to receive around EUR145 million for its 6.9% stake, according to further reports this week.

Prior to the launch of President Hugo Chávez’s re-nationalisation programme, CANTV was owned by Verizon Communications (28.5%), Telefónica Venezuela Holding (6.9%), the government (6.6%), employees and benefit funds (6.4%), with the remaining 51.6% listed on the Caracas and New York stock exchanges.

Venezuela, CANTV, Movilnet