Embratel's 2Q profits fall 77%

24 Jul 2008

Brazilian fixed line operator Embratel Participacoes’ second-quarter net income dropped 77% year-on-year from BRL499 million (USD314 million) to BRL115 million, the company said in its latest earnings release, as reported by BNamericas. Embratel did not divulge the reasons for the fall, but said net revenues climbed 11.5% to BRL2.34 billion, against BRL2.10 billion in the second quarter of 2007. EBITDA rose 1.9% over the same period to BRL550 million, and the EBITDA margin slipped 2.2 percentage points to 23.5%. The telco said its quarterly sales were bolstered by strong demand for local communications services (up 33.8%), data communications (up 12.1%), voice call services (up 5.9%) and other related services (up 6.4%). Revenues from domestic long-distance national calls rose 7.6% to BRL1.07 billion, while income from international calls fell 8.2% to BRL120 million.

Embratel Participacoes, controlled by Mexico’s Telmex, had 4.16 million access lines in service at the end of June 2008, an increase of 61.5% compared to the same time last year. In terms of broadband subscribers, Embratel closed out 2Q08 with 3.36 million high speed internet connections, up 30% compared to end-2Q07.

The company’s overall investments increased to BRL409 million in the second quarter from BRL209 million in the same period of 2007.