Embratel's 2008 net profit down 22.4%

17 Feb 2009

Brazilian telecoms group Embratel, which is controlled by Telmex of Mexico, has reported that net profits tumbled by 22.4% to BRL612.7 million (USD270.2 million) in 2008, impacted by deferred tax credits and local exchange rates. For the fourth quarter, the group reported a 6.2% year-on-year drop in earnings to BRL116.3 million, compared with BRL123.9 million in the same period last year. Embratel said the 2008 financial results were affected by a BRL179 million deferred tax credit relating to its Vesper unit and the net negative effect of exchange rate fluctuations on loans and derivative contracts to the tune of BRL168 million. Revenues for the year reached BRL9.78 billion, up 13.4% year-on-year, of which BRL2.58 billion was booked in 4Q 2008 (up 15.8%). Turnover generated by local voice telephony services increased 33.2% y-o-y, data transmission services increased 14.7%, and long distance – which still accounts for roughly 50% of total revenue – dipped 8%. EBITDA was BRL630.8 million in the last three months of 2008, compared with BRL515.3 million in the corresponding period of 2007, and full-year EBITDA rose 13.6% y-o-y to BRL2.46 billion. The EBITDA margin was broadly stable over the year.