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Telefonica Brasil books 15% drop in first-quarter net income

11 May 2012

Telefonica of Spain’s Brazilian asset Telefonica Brasil, which offers fixed and mobile services under the recently unified Vivo banner, booked a 15.2% year-on-year decline in net profit to BRL956.5 million (USD488 million) for the three months to 31 March 2012, attributed to higher costs related to depreciation and amortisation. The Brazilian group reported that depreciation and amortisations reached BRL1.3 billion in the period under review, compared to BRL1.08 billion in the corresponding period of 2011. Revenues climbed to BRL8.3 billion in 1Q12, from BRL8.0 billion a year earlier, while earnings before interest, taxes, depreciation and amortisation (EBITDA) inched up marginally to BRL2.85 billion from BRL2.84 billion; EBITDA margin was 34.2%, down from 35.4%.

Operationally speaking, Telefonica Brazil closed out March 2012 with a total of 90.4 million accesses, up 16.4% from 77.5 million at end-March 2011, including 74.78 million mobile accesses (20% y-o-y) and 15.25 fixed and broadband accesses (1.3%). Of these, traditional fixed lines in service accounted for 10.88 million, down 3% y-o-y, retail broadband connections added a further 3.70 million (+3.7%), and narrowband and ‘other’ accesses accounted for 285,000. Telefonica also reported a total of 683,000 pay-TV accesses, up 34% from 1Q11, although it noted that stripping out the consolidation of TVA accesses, effective from June 2011, pay-TV subscriber growth would have been 4% year-on-year.

Brazil, Telefonica Brasil (Vivo)

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