Net Servicos reports third-quarter net loss

22 Oct 2008

Brazilian pay-TV provider Net Servicos recorded a net loss of BRL63.9 million (USD30.1 million) in the three months ended 30 September 2008, reversing a net profit of BRL51.1 million in the corresponding year earlier period, BNamericas writes citing a company earnings statement. On a positive note, the company’s net revenues climbed 27% year-on-year from BRL747 million to BRL948 million, it said. Net’s EBITDA was BRL247 million, up 21% y-o-y, and the EBITDA margin was down one percentage point at 26%. Group operating costs rose sharply from BRL365 million to BRL460 million, largely the result of ongoing CAPEX spend to improve customer services, high usage of connectivity due to growth in the broadband subscriber base and higher programming costs due to a larger pay-TV client base. Third-quarter CAPEX was BRL260 million, of which 67% was spent on client installations, it said.

Net Servicos closed September with 2.9 million pay-TV users, up 22% year-on-year, while broadband connections grew 60% to two million and voice telephony accounts rose 208% y-o-y to 1.5 million. Net added that ARPU grew 5.6% to BRL136, compared with BRL129 in the third quarter of 2007. In August 2008 Net Servicos acquired fellow pay-TV and broadband services provider ESC 90 for BRL94.6 million, adding 31,000 basic TV customers and 24,000 broadband users in Vitoria and Vila Velha, Espirito Santo state, where the company previously had no presence.