Brazilian telecom carrier,
Telefonica Brasil SA
) reported second-quarter 2013 net income of R$914.2 million
($443.1 million), down 15.8% year over year.
Revenues rose 3.0% year over year to R$8,491.5 million
Consolidated EBITDA dropped 16.7% year over year to R$2,575.5
million ($1,248.3 million) in the second quarter, with EBITDA
margin of 30.3% was down 720 basis points (bps). Operating
expenses increased 14.9% year over year to R$5,916.0 million
total revenue climbed 10.1% year over year to R$8,101.1 million
($3,926.6 million) in the reported quarter, primarily driven by
data and value added services (VAS), and access and usage
Average revenue per user (ARPU) grew 3.4% to R$22.8 ($11.1),
driven by a 23.4% rise in Data ARPU. Customer churn rose to 3.9%
from 3.8% recorded in the second quarter of 2012.
As of Jun 30, 2013, the total subscriber base was 76.20
million (up 0.6% year over year). Post-paid subscribers grew
20.4% year over year to 20.685 million, while prepaid decreased
5.2% year over year to 55.515 million customers.
Fixed Line Business
total revenues fell 3.2% year over year to R$4,730.3 million
($2,292.8 million). Pay-TV was the worst performer with a 24.3%
decline in net revenue followed by a 9.5% reduction in fixed
voice and access.
At the end of the second quarter, the total fixed access lines
reached 14.94 million, reflecting a 1.3% year-over-year decrease.
Fixed Broadband customers were 3.837 million compared with 3.717
million a year ago. The Pay-TV subscriber base dropped 17.4% year
over year to 537,000 customers, while fixed voice subscribers
were 10.57 million, down 1.9% year over year.
Telefonica Brasil - a subsidiary of
) - exited the quarter with cash and cash equivalents of
R$7,779.2 million ($3,770.6 million) compared with R$2,049.5
million ($1,048.9 million) in the year-ago quarter. Net debt
decreased to R$523.6 million ($253.8 million) from R$3,174.1
million ($1,625.5 million) in the corresponding year-ago period.
The net debt-to-EBITDA ratio improved to 0.04 times from 0.26
times in the year-ago quarter.
We believe that Telefonica Brasil displays long-term
opportunities for both fixed-line and mobile businesses, leading
to better revenues in the coming quarters. Broadening the
subscriber base along with investments in improving network
activity will also aid the company's profitability.
Telefonica Brasil, which operates with other Latin American
telecom service providers such as
America Movil S.A.B. de C.V.
Hawaiian Telcom Holdco Inc.
) currently holds a Zacks Rank #3 (Hold).
AMER MOVIL-ADR (AMX): Free Stock Analysis
HAWAIIAN TELCOM (HCOM): Free Stock Analysis
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TELEF BRASIL SA (VIV): Free Stock Analysis
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