Brazilian telecom carrier,
Telefonica Brasil SA
) reported first-quarter 2013 net income of R$810.2 million
($405.4 million), down 15.3% year over year.
Revenues rose 2.9% year over year to R$8,555.5 million
Consolidated EBITDA dropped 3.5% year over year to R$2,747.6
million ($1,375.2 million) in the first quarter, with EBITDA
margin standing at 32.1% was down 210 basis points (bps). The
year-over-year decline was mainly due to restructuring of the
organization that took place in the first quarter of the year.
Operating expenses rose 6.3% year over year to R$5,807.9 million
revenues climbed 10.4% year over year to R$5,636.3 million
($2,820.9 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$23.1 ($11.6),
driven by 14.8% rise in Data ARPU. Customer churn rose to 3.6%
from 2.1% recorded in the first quarter of 2011.
As of Mar 31, 2013, the total subscriber base was 75.99
million (up 1.6% year over year). Post-paid subscribers grew
17.4% year over year to 19.518 million, while prepaid decreased
2.9% year over year to 56.47 million customers.
Fixed Line Business
revenues fell 8.9% year over year to R$2,919.2 million ($1,461.1
million). Pay-TV performed the worst with a 23.1% decline in
revenues followed by a 13.4% reduction in fixed voice and access.
Interconnection revenues also registered a decline of 9.2%.
At the end of the first quarter, the total fixed access lines
reached 14.87 million, reflecting a 2.5% year-over-year decrease.
Fixed Broadband customers stood at 3.75 million compared with
3.69 million a year ago. The Pay-TV subscriber base dropped
17.2% year over year to 566,000 customers, while subscriber base
at fixed voice segment was 10.55 million, down 3.0% year over
Telefonica Brasil - a subsidiary of
) - exited the quarter with cash and cash equivalents of
R$6,751.1 million ($3,378.9 million) compared with R$2,889.5
million ($1,639.2 million) in the year-ago quarter. Net debt
decreased to R$655.2 million ($327.9 million) from R$2,657.7
million ($1,507.7 million) in the corresponding year-ago period.
The net debt-to-EBITDA ratio improved to 0.05 times from 0.22
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 the network
activity will also aid the company's profitability.
Telefonica Brasil, which operates with other Latin American
telecom service providers like
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
TELEFONICA S.A. (TEF): Free Stock Analysis
TELEF BRASIL SA (VIV): Free Stock Analysis
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