Brazilian telephony and broadband internet provider Global Village Telecom (GVT) posted a net loss of BRL9.5 million (USD4.5 million) in the third quarter of 2008 reversing a BRL41.2 million net profit in the corresponding period of 2007, reports BNamericas citing a GVT earnings statement. Despite the discouraging performance, GVT remains un-phased saying ‘Our target is high-end clients that are well established in the market. Despite the world’s financial crisis, I believe telecommunication services, including broadband, are essential to consumers as are water or electric power. Therefore I believe the telecoms sector will suffer less than others.’
GVT attributed the loss to exchange rate losses in the period, related to outstanding dollar-based debt of USD185 million maturing in June 2011. The operator said forex-related losses topped BRL59.8 million in the third quarter compared with a profit of BRL18.4 million in 3Q07. Group net revenues reached BRL347 million in the period under review, up 34.1% year-on-year, driven by core business services (up 40.5% at BRL316 million), next generation services (up 78.3% at BRL96.9 million) and broadband, up a significant 63.1% y-o-y. EBITDA rose 42.1% to BRL132 million, it said, helping boost the EBITDA margin by two percentage points to 38%. CAPEX reached BRL177 million in 3Q08, up 26.4% compared to the same period a year ago in a period in which GVT added a net 203,483 new lines to reach 1.7 million lines in service by 30 September. Of those additions, 84,859 were voice telephony lines, 50,334 were broadband lines and the remainder were for corporate data services. In September this year, GVT also expanded its operations to Bahia state capital Salvador, investing BRL24.5 million in the first phase to connect 39,552 new users.