Vivo narrows second-quarter net loss

31 Jul 2008

Brazil’s number one mobile operator by subscribers, Vivo, posted a net loss of BRL59.5 million (USD38 million) in the three months to end-June, narrowing a net loss of BRL65.1 million in the same period last year, BNamericas reports citing an earnings statement from the company. The improved performance was attributed to an increase in interest rates and to the debt necessary for the purchase of regional mobile operator Telemig Celular, said Vivo chief financial officer Ernesto Gardelliano.

Vivo’s operational net revenues in the quarter climbed 12.9% year-on-year from BRL3.36 billion to BRL3.79 billion, while group EBITDA rose 16% from BRL756 million to BRL879 million. The EBITDA margin rose marginally by point six of one percent to 23.2%. The operator said it added two million net new subscribers in the period under review to end June with 40.4 million users, up 19.4% compared to 33.7 million in Q2 2007. Of the total, 7.7 million are post-paid and the remaining 32.7 pre-paid. Vivo’s GSM operations reached 22.5 million users, or 55% of the total, while overall, the cellco had a market share of 30.4% at the start of July 2008. The company said its strong net additions in the second quarter were the result of aggressive marketing campaigns and the completion of the acquisition of fellow mobile carrier Telemig Celular on 3 April. Operational costs in the period totalled BRL2.91 billion, up 12% y-o-y, and CAPEX was BRL1.56 billion, up 332% on 2Q 2007, as Vivo progressed plans to expand its GSM coverage and made a part-payment on its 3G licences.