Oi net profit down 47% in Q2

4 Aug 2008

Brazilian telecoms operator Oi (Telemar) posted net profit of BRL249 million (USD159 million) in the second quarter of 2008, down 46.8% on the corresponding period in 2007, BNamericas reports citing a company earnings statement. Oi’s EBITDA dipped 17.9% year-on-year to BRL1.31 billion, against BRL1.60 billion previously, while the EBITDA margin dropped by 8.6 percentage points to 28%. The telco said net revenues climbed 7.3% to BRL4.68 billion, up from BRL4.36 billion a year ago. CAPEX was BRL1.79 billion in the last quarter, up a massive 362% on the year-ago period, with 70% targeted on developing its mobile business and 30% on fixed line activities. Oi’s investor relations and financial director Jose Luis Salazar said that the increased spending on fixed line services ‘was necessary to enable number portability and [to expand] coverage and transmission in the broadband segment.’ Mobile investments were largely focused on implementing 3G and for paying for its UMTS licences. Oi disbursed BRL86.7 million for its 3G licences, equivalent to 10% of the total. The remainder will be paid in December 2008.

Salazar said that Oi would invest a total of BRL4.5 billion in its networks and services this year, up from its previous forecast of BRL4 billion. The company has also spent BRL151 million on acquiring regional mobile operator Tele Norte Celular, Amazonia Celular’s owner, as well as BRL1.21 billion for 18.9% of Brasil Telecom’s (BrT) preferred shares and 10.5% of its capital, and BRL2.06 billion for its parent Brasil Telecom Participacoes (including 33.3% of the preferred shares and 21.1% of the total capital).

At the end of June 2008 Oi had 13.8 million fixed lines in service, down 3.2% year-on-year, while the number of broadband connections went up 42.5% to 1.8 million. At the same date it had 20.2 million active mobile SIMs in operation, up 48.9% y-o-y, of which 84% were pre-paid users.

Brazil, Oi