Net Q1 earnings up 250% y-o-y

20 Apr 2007

Brazilian cable TV operator Net Serviços posted net income of BRL25 million (USD12.3 million) in the three months to 31 March 2007, up 250% from BRL7.2 million in the corresponding period of 2006. The figure however, was below consensus forecasts of BRL46.7 million, in an analyst poll carried out by Agência Estado. Net revenues rose 28% over the same period from BRL439 million to BRL561 million and EBITDA climbed 30% from BRL116 million to BRL152 million in Q12007 – in line with market expectations. The EBITDA margin was broadly unchanged at 27%.

Net Serviços said the number of pay TV users signed up to its service increased by 18% to 1.8 million and broadband internet subscribers rose by 84% to 830,000. In addition, the company’s voice business ended its first year of operation with 257,400 clients. In 2007 Net plans to focus its efforts on nurturing organic growth through the increased penetration of services, using both its existing infrastructure and maximising returns on investments to acquire new users. The cableco spent BRL150 million in Q12007 – the same as in the corresponding year earlier period – in upgrading its network with bi-directional capability. It plans to invest a further BRL150 million over the course of this year to complete the upgrade.

BNamericas writes that the Brazilian telecoms regulator Anatel is expected to give an answer in the second quarter of 2007 to Net’s proposal to acquire local pay TV company Vivax.