Telefonica Brasil's net profit rises 42% in fourth quarter with post-paid business

Adds details on post-paid and fixed services in paragraphs 4-5, and analyst comments in paragraphs 10-11

SAO PAULO, Feb 20 (Reuters) - Brazilian telecommunications operator Telefonica Brasil VIVT3.SA posted on Tuesday a 42.1% increase in fourth quarter net profit from a year earlier, helped by an increase in revenues in its post-paid operations.

The firm, which is controlled by Spain's Telefonica TEF.MC, posted a 1.60 billion reais ($324.7 million) net profit for the quarter ended in December. By comparison, analysts polled by LSEG expected a 1.41 billion reais net profit for the period.

The company's net operational revenue rose 6.9% in the quarter year-on-year to 13.5 billion reais, as its main mobile services business saw an over 8% increase in revenues.

"The strong post-paid performance is related to the increase in the customer base, both through prepaid migrations and the acquisition of new customers, and annual price adjustments", Telefonica Brasil said. Its post-paid revenues rose about 11% in the quarter from a year earlier.

Meanwhile, Brazil's Telefonica revenues from core fixed services, which include optical fiber, rose 9.5% year-on-year.

The results come after rival TIM Brasil TIMS3.SA posted results earlier this month, which sell-side analysts underscored were strong.

Brazilian telecommunications firms are seeing good momentum, analysts say, boosted by sequential price hikes and recent mobile assets acquisitions.

Telefonica Brasil's earnings before interest, taxes, depreciation and amortization (EBITDA) stood at 5.75 billion reais for the quarter, up almost 10% from a year earlier. Analysts had expected EBITDA of 5.68 billion reais.

EBITDA margin rose 1.1 percentage points year-on-year to 42.5% in the quarter.

"Net income of 1.6 bln reais came in above our estimates mostly on lower income taxes", analysts at Citi led by Gabriel Gusan wrote in a report.

"As expected, Vivo (as the firm is also known in Brazil) reported healthy results and the slight margin beat was related to the leasing negotiation gain," they added.

($1 = 4.9275 reais)

(Reporting by Andre Romani; Editing by Steven Grattan, Anthony Esposito and Aurora Ellis)

((Andre.Romani@thomsonreuters.com; 11 991314109;11 56447500;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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