Oi reports 65% rise in profits, lower debt

27 Jul 2007

Brazil’s largest fixed line operator by subscribers, Tele Norte Leste Participacoes (Telemar, or Oi), said second quarter net profits climbed to BRL467.5 million (USD249 million) in the three months to June, compared to BRL282.6 million a year ago – its third straight quarter of profit growth after cutting debt and financing costs. The Rio de Janeiro-based company said revenues rose by 7.3% year-on-year to BRL4.36 billion, driven by a 32% increase in revenue from its mobile arm. Bloomberg notes that record-low interest rates in Brazil reduced costs tied to debt, helping to compensate for declining earnings from traditional telephone services. Telemar’s financial expenses dropped 61% to BRL148 million after net debt fell 34% and interest expense tumbled 29%.

At the end of June 2007, Oi had 13.6 million mobile users, a 13% hike on the same period a year ago, while the number of fixed lines in service dropped 0.7% to 16.9 million, Telemar said. The number of internet broadband customers climbed 31% to 1.27 million.

Brazil, Oi