TIM Brasil reports Q2 loss, trims full-year sales, profit forecasts

8 Aug 2008

Brazilian wireless operator TIM Brasil yesterday reported a net loss for the second quarter ending 30 June 2008, and trimmed its full-year forecast for revenues and net income on an anticipated rise in capital expenditure and marketing costs. The Telecom Italia-backed operator said net losses from operations were BRL34.07 million (USD21.53 million) in the period under review, against a profit of BRL33.98 million in the same period of 2007. The result was however, a 68.4% improvement from 1Q08’s BRL108 million net loss. Net revenues increased 4.14% y-o-y to BRL3.19 billion, compared to BRL3.06 billion in the same period last year, the company said in an earnings statement. Earnings before interest, taxes, depreciation and amortisation (EBITDA) dropped 14.4% year-on-year to BRL636.7 million, impacted by higher interconnection costs, while the EBITDA margin dipped more than four percentage points to 20%, it said. TIM Brasil has adjusted its 2008 outlook, cutting its forecast for net sales growth from 9% to closer to 7%, and reducing its estimate for EBITDA margin to 22%-22.5%, down from 23% previously.

The operator ended June with around 33.8 million subscribers, up 23.1% compared to the same time last year, split out as 26.9 million pre-paid and 6.9 post-paid users. TIM’s market share fell by 0.4 percentage points in the quarter to 25.4% and monthly blended ARPU for the period dropped 13.8% to BRL29.80 as a result of a higher proportion of pay-as-you-go users. TIM Brasil said it invested BRL1.71 billion in April-June, up 423% from BRL326 million in 2Q07, of which BRL1.24 billion was allocated for 3G licences and the remainder for network maintenance and expansion works. The company said the higher CAPEX was partly designed to prepare for number portability and to improve its 3G network.

Brazil, TIM Brasil