TIM Brasil reports rise in second-quarter profit on lower debt servicing costs

1 Aug 2013

Brazil’s second largest mobile operator by subscribers TIM Participacoes (TIM Brasil) has reported an 18% year-on-year rise in net income for the three months to 30 June 2013, aided by its efforts to trim its costs of servicing debt. The carrier, which is owned by Telecom Italia, booked net profit of BRL405.8 million (USD178 million) for the period under review, up from BRL344.3 million in the second quarter of 2012. TIM Brasil reported that its total debt servicing charges reached BRL41 million in 2Q13, down sharply from BRL63.6 million a year ago. Net revenue improved by 9.7% year-on-year to BRL4.98 billion and EBITDA was up slightly (1.8%) to BRL1.23 billion, although operating expenses increased by 11.0% y-o-y to BRL3.71 billion. TIM Brasil closed out June with a total of 72.19 million lines in service, up 4.8% on an annualised basis.

In a conference call, TIM chief executive Rodrigo Abreu says his firm intends to stick to its three-year plan despite the weakness of the Brazilian economy, which is undermining consumer confidence. As such, the operator intends to invest BRL10.7 billion in the period, including spending BRL3.6 billion in the current fiscal year. ‘I believe that planning is quite feasible and rational. A big difference that can occur for the next year and for 2015 is about how to allocate this CAPEX, he said, adding ‘The economic environment has some impact on consumption and the impact existed in the second quarter, but there was a dramatic reduction in the growth of EBITDA.’

The CEO also confirmed that TIM Brasil is currently working on a number of projects including the restructuring of the operations of its fixed line subsidiary Intelig, which should be completed by the end of the year and will focus on the operation in product offerings and profitable customers. TIM is also looking to continue its fibre-optic rollout, and expects to cover one million homes by end-2013, up from the 800,000 passed at end-June. It is also considering small cell technology to further boost wireless broadband availability, the deployment of which is part of its 2014 investment plan. Finally, the carrier has confirmed it is planning to roll out 4G coverage ahead of the government’s official launch schedule (December 2013) during the second half of the year.

Brazil, TIM Brasil