Net returns to profit in Q4, reveals USD646m CAPEX plan

11 Feb 2010

Brazilian cable TV and broadband access provider Net Servicos posted net income of BRL306 million (USD166 million) in the three months ended 31 December 2009, reversing a net loss of BRL76 million in the corresponding year-earlier period. In an earnings statement the cableco said its quarterly revenues reached BRL1.24 billion in the period under review, up 21% year-over-year, while EBITDA grew 27% to BRL348 million and the EBITDA margin reached 28%, compared to 27% in 4Q08. Net Servicos expects the EBITDA margin for 2010 to be in the range of 27%-29%. Quarterly ARPU was BRL133, down 2% year-on-year and fourth-quarter CAPEX was BRL386 million, up from BRL365 million a year ago as Net invested more on items related to subscriber acquisition and infrastructure adjustments. Full-year revenues reached BRL4.61 billion, a 25% increase on BRL3.69 billion in 2008, with net revenues reaching BRL736 billion, compared to BRL20 million previously.

Net expects total capital expenditure for 2010 to reach BRL1.2 billion, up from BRL1.1 billion last year, with its CFO Joao Adalberto Elek saying: ‘CAPEX will be fully supported by our strong cash generation.’ He went on to add ‘We’re confident that net additions this year will remain at the same level seen in 2009.’ The company’s pay-TV user base expanded 20% to 3.69 million by end-2009, while broadband users increased 30% to 2.88 million and telephony lines in service surged 42% to 2.56 million.