Corporate restructuring costs blamed for 82% slump in Oi SA profits

2 Aug 2012

Brazilian telecoms group Oi SA has reported a significant 82% decline in net profit for the three months ending 30 June 2012, to BRL64 million (USD31.2 million) from BRL374 million in 2Q11, largely the result of internal corporate restructuring following the incorporation of Telemar Norte Leste, which was completed in February. First-half net income stood at BRL407 million it said, BRL60 million lower than the figure recorded for 1H11, it added. In its earnings release Oi SA also reported revenue of BRL6.9 billion in April-June, down 2.4% compared to the same time a year ago. It closed out June 2012 with a total of 72.334 million revenue generating units (RGUs), up 2.1% quarter-on-quarter, of which 18.037 million were residential RGUs, 8.370 were business/corporate and 45.198 million were from Oi SA’s ‘Personal Mobile’ segment.

Second-quarter EBITDA was BRL2.1 billion in the period under review, down 13.5% year-on-year; EBITDA margin contracted by four percentage points over the same period, to 31%. In the April-June quarter Oi SA invested a total of BRL1.3 billion in its networks and services, up 30.5% compared to 2Q11; first-half CAPEX reached BRL2.4 billion, up 31% y-o-y. In its earnings report, Oi SA noted that the slowdown in the decline of fixed telephony subscribers was maintained, with a 71% reduction in the number of disconnections over the same period in 2011.

Brazil, Oi