Vivo’s Q3 earning rise sharply post Telemig takeover

12 Nov 2008

Brazilian mobile operator Vivo reproted consolidated net profits of BRL130 million (USD58.5 million) in the third quarter of 2008, a significant 205% rise on the BRL42.6 million figure reported in the same period last year, the company said in its latest earnings statement as reported by BNamericas. Net revenues rose 13.7% year-on-year from BRL3.59 billion to BRL4.08 billion, fuelled by a surge in service revenues while third-quarter EBITDA grew 39.8% year-on-year from BRL942 million to BRL1.32 billion; the EBITDA margin was up six percentage points at 32.3%. CAPEX was up 112% to BRL868 million in 3Q08, largely for expanding GSM and 3G coverage, as well as for the beginning of Vivo’s operations in the northeast region of the country, which accounted for 20% of the investment spend in the period under review. ‘In September we began operating the W-CDMA network and in October we entered the markets of Ceara and Pernambuco,’ said Vivo president Roberto Lima in a conference call.

Vivo added a net 1.8 million new subscribers in the third quarter, raising its total to 42.2 million by the end of September, up 21% y-o-y, and a market share of around 30%. Of the total, 8.1 million are post-paid customers and the remainder pre-paid, it said. Monthly blended ARPU in the three months to September fell 4.2% year-on-year to BRL29.4.

Vivo said its consolidated net debt topped the BRL4billion mark at the start of October this year, up from BRL2.54 billion at the same time a year ago, largely due to the acquisition of mobile operator Telemig Celular and its parent company Telemig Celular Participacoes, and the payment of 10% of its 3G licence fees. During the third quarter Vivo also secured a BRL389 million loan facility with the state-owned Banco do Nordeste do Brasil. The funds will be used for expansion of the already existing network in the states of Bahia, Sergipe and Maranhao and for implementing a new network in the states of Piaui, Ceara, Rio Grande do Norte, Paraiba, Pernambuco and Alagoas, the operator said