Vivo reports 26.5% rise in first-quarter net profits

11 May 2009

Brazilian mobile operator Vivo Participacoes posted net profit of BRL123 million (USD59 million) in the three months ended 31 March 2009, up 26.5% compared to 1Q08, on quarterly revenues which climbed 9.2% from BRL3.68 billion to BRL4.02 billion in the same period. The operator’s executive vice president of finance, Ernesto Gardelliano, attributed the rise in turnover to increased sales of smartphones and mobile broadband services in the period. Nevertheless, Vivo’s 1Q09 EBITDA dropped 7.8% year-on-year from BRL1.30 billion to BRL1.20 billion, while the EBITDA margin dropped 5.6 percentage points to 29.9%. The cellco’s CAPEX in January-March totalled BRL541 million, of which the majority was spent on maintaining and expanding its GSM and 3G infrastructure. As at 1 April 2009, Vivo’s 3G network had been rolled out to 399 cities and municipalities nationwide, bolstered by the launch of operations in the northeastern states of Paraiba, Alagoas and Rio Grande do Norte during the first quarter, Vivo president Roberto Lima said. The introduction of mobile services in the state of Piaui last month enabled the cellco to reach nationwide coverage, Lima added.

Vivo ended March 2009 with 45.6 million mobile users, having added 696,000 net new users in the first quarter, albeit the growth figure was down 24.8% compared to the year-earlier quarter. Of the total, 8.8 million were on post-paid monthly contracts with the remainder taking pre-paid options. Monthly blended average revenue per user (ARPU) in the period fell 8.5% year-on-year to BRL27, and Vivo closed out the quarter with a market share of 29.7%, down from 30.4% in 1Q08. GSM subscribers reached 33.3 million at the same date.