Embratel reports four-fold increase in Q4 profit

14 Feb 2013

Brazilian telco Embratel Participacoes says its net income quadrupled in the last three months of 2012, as a surge in cable TV sales boosted its top line. The operator, which is controlled by Mexico’s America Movil (AM), booked net profit of BRL190.8 million (USD97 million) in Q4 2012, compared with BRL45.1 million in the corresponding period of 2011. Net revenue increased 58% year-on-year to BRL4.97 billion from BRL3.14 billion in the fourth quarter of 2011, as turnover derived from its cable TV business soared by almost 400% to BRL1.52 billion, as Embratel completed the integration of Net Servicos de Comunicacao SA with its own.

At the beginning of 2012 Embratel purchased the outstanding shares of Net Servicos that it did not already own, taking control of GB Empreendimentos e Participacoes, the holding company that controlled Net Servicos, after buying 5.5% of GB’s voting shares for BRL6.44 million from Globo Comunicacoes e Participacoes SA, or Globopar. The deal formed part of a wider agreement completed in 2005, under which Embratel agreed to take control of Net Servicos once legislation was changed to allow foreign-owned companies to own Brazilian cable TV firms. That legislation was duly altered in 2011.

Brazil