TNL (Oi) posts fourth-quarter loss on non-recurring items

16 Mar 2010

Brazil’s largest telecoms operator by revenues Telemar Norte Leste (Oi) has reported significant fourth-quarter losses for the period ended 31 December 2009, attributable it said to some non-recurring expenses and a drop in revenues.

Oi posted a 4Q09 net loss of BRL365 million (USD207 million), reversing a net profit of BRL13 million in the corresponding year-earlier period. In a conference call the company’s CFO Alex Zornig said: ‘We lost money primarily because of the provisions … Otherwise, our margins would have been similar to last year.’ Oi booked non-recurring costs of BRL305 million related to the deferment of subsidies on pre-paid handsets and on legal costs stemming from the integration of Brasil Telecom. Oi’s performance was further impacted it said by integration costs and its launch of mobile services in Sao Paulo last year.

The operator’s quarterly net revenues reached BRL7.5 billion down from BRL7.6 billion a year ago, largely the result of a decline in demand for the telco’s fixed line services. Group earnings before interest, taxes, depreciation and amortisation (EBITDA) reached BRL2.37 billion, down from BRL2.44 billion in 4Q08. The EBITDA margin dropped to 31.4% in 4Q09 from 31.9% a year earlier. Net debt reached BRL21.9 billion in 4Q09, up 77% year-on-year. Despite the poor performance, Oi’s shares were stable in early trading, reaching BRL33.24 on the local BM&FBovespa bourse, up 0.3% on the day. Oi plans to invest BRL3-BRL4 billion in 2010, Zornig said, compared with BRL5.1 billion last year.

Brazil, Oi