GVT first-half revenue up 31% y-o-y

3 Sep 2012

Global Village Telecom (GVT), the Brazilian fixed telephony, pay-TV and broadband provider owned by French media and communications group Vivendi, has reported revenues of BRL2.05 billion (USD1 billion) for the first six months of this year, up 31.4% from the corresponding period of 2011. In a statement GVT said that excluding changes to the ICMS tax (a local tax similar to the European VAT), its turnover would have been 42% higher. The telco’s broadband division booked revenue growth of 22.4% year-on-year and sales derived from voice telephony increased by 32.4% over the same period, it said. Total lines in service reached 7.4 million at 30 June 2012, up 41% y-o-y, with GVT also reporting that it had signed up 203,000 pay-TV subscribers by the same date. Despite the positive 1H12 performance, the Brazilian carrier has trimmed its overall forecast for revenue growth in the full year to 30%, from the previous figure of 35%, without giving any reasons. GVT also hopes to maintain an EBITDA margin of just over 40%, compared with around 40% previously. The EBITDA margin in H1 2012 was 40.6%, down from 41.8%.

Last month, rumours surfaced in the press that Vivendi has hired the investment banking divisions of Rothschild and Deutsche Bank to review the strategic options for GVT. Reuters cited an unconfirmed report as claiming that the French group was reviewing GVT’s operational structure to hopefully reverse a 29% decline in its share price since January last year, amid continuing rumours Vivendi could look to sell off units or break up the business entirely.

If Vivendi does look to sell GVT it may attract interest from Telefonica of Spain or Brazilian owned Oi SA, industry watchers say. Representatives for Deutsche Bank, Rothschild and Vivendi declined to comment.

Brazil, Global Village Telecom (GVT)