Net Servicos posts fall in Q1 net income

29 Apr 2010

Brazil’s largest cable TV and internet services provider by subscribers, Net Servicos de Comunicacao (Net Servicos) said first-quarter profit for the three months to 31 March fell 62% year-on-year on the back of a rise in operating costs and other expenses. The publication of its financial results saw the group’s share price slump to a seven-month low in early trading. The cablecos reported net income of BRL45.9 million (USD26 million) in the period under review, down from BRL120.1 million in 1Q09, although first-quarter revenues climbed 16% y-o-y to BRL1.26 billion. Group operating costs increased 17% to BRL601.4 million, Net Servicos said, while the operator’s financial expenses more than doubled to BRL76.6 million, impacted by a decline in the local currency, the real, against the US dollar, which increased the net value of the cable provider’s foreign-currency debt.

On an operational level, Net Servicos increased its pay-TV subscriber base by 13% year-on-year, closing out March 2010 with 3.78 million basic TV users, while its broadband internet base climbed 22% in the same period to 2.99 million users.