Vivo’s 4Q net income quadruples on strong operational performance

25 Feb 2011

Brazil’s number one mobile operator by subscribers, Vivo Participacoes, reported a more than four-fold increase in net income for the October-December 2010 period, driven by an improvement in its operational performance and lower depreciation costs. Vivo, which is controlled by Spain’s Telefonica, booked net profit of BRL864.2 million (USD516.5 million) in the period under review, up from BRL203.3 million in the fourth quarter of 2009. 4Q10 net revenue of BRL4.86 billion was higher than the BRL4.40 billion figure it reported a year ago, while costs related to depreciation and amortisation came in at BRL513.8 million, compared to BRL831.0 million a year earlier. Fourth-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) climbed to BRL1.67 billion from BRL1.38 billion previously. The EBITDA margin, often considered a key metric for profitability, improved to 34.5% in Q4 2010, up from 31.4% in the year-earlier period. For the full year Vivo generated net profits of BRL2.5 billion, up from BRL878.1 million previously. Full-year CAPEX was BRL2.5 billion last year, up from BRL2.3 billion in FY2009.

Vivo closed out 2010 with a total of 60.293 million mobile accesses, up 8.548 million on the same time a year earlier. The company said its post-paid segment grew 29.1% year-on-year to 12.634 million, giving the cellco a contract-user market share of 35.24% by the year end – up three percentage points year-on-year. Blended monthly ARPU fell 7.4% y-o-y however, to BRL25.2, although MOU climbed 26.1% to 116 minutes. Monthly churn was broadly stable y-o-y at 2.7% (2.5%); subscriber acquisition costs (SAC) of BRL56 in 4Q10 were the lowest in the company’s history and 9.7% lower than in 4Q09 and in 3Q10.