Telefonica Brasil (Vivo) reports 15% fall in Q1 profit

8 May 2013

Telefonica Brasil, the fixed and mobile operator owned by Telefonica of Spain, has reported that net profit for the three months ended 31 March 2013 fell by 15.3% year-on-year to BRL810.2 million (USD403 million), from BRL956.5 million in 1Q12, as a rise in operational expenses and depreciation costs ate into the bottom line. The Madrid-based parent, which merged its fixed line and mobile businesses in Brazil in 2011, said that operational costs climbed 6.3% on an annualised basis to BRL5.80 billion, while depreciation charges of BRL960 million were up from BRL880 million in the year-earlier period. Consolidated net revenue only grew by 2.9% y-o-y to BRL8.55 billion though, with the mobile arm reporting a 7.0% rise to BRL5.27 billion, while turnover from fixed line phone, internet and cable TV services slumped by 8.9% to BRL2.90 billion due to ‘tougher competition’ and in particular, ‘bundled promotions’. Earnings before interest, taxes, depreciation and amortisation (EBITDA) slipped to BRL2.75 billion from BRL2.85 billion in 1Q12; EBITDA margin narrowed to 32.1% from 34.2% previously.

Telefonica (Vivo) closed out March 2013 with a total of 90.86 million customers, down from 91.11 million at 31 December 2012, but up from the roughly 90 million subscribers reported at end-March 2012.

Brazil, Telefonica Brasil (Vivo)