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VIV - Telefonica Brasil SA News Story

$7.98 0.2  2.7%

Last Trade - 05/03/21

Sector
Telecoms
Size
Large Cap
Market Cap £13.02bn
Enterprise Value £13.97bn
Revenue £5.48bn
Position in Universe 617th / 6651

UPDATE 1-Telefonica Brasil's Q2 profit dips 21.6% but still exceeds expectations

Wed 29th July, 2020 12:10pm
(Adds details, context)
    By Gabriela Mello
    SAO PAULO, July 29 (Reuters) - Telefonica Brasil SA
 VIVT4.SA  on Wednesday reported a 21.6% drop in second-quarter
net income, but exceeded market expectations as lower financial
expenses and cost-control efforts slightly compensated for
smaller revenues amid the coronavirus pandemic.
    Brazil's largest wireless carrier said in a securities
filing that its net profit hit 1.113 billion reais ($215.98
million) in the quarter ended June 30, above a consensus
estimate of 1.008 billion reais compiled by Refinitiv.
    Operating performance measured by recurring earnings before
interest, taxes, depreciation and amortization (EBITDA) was
4.103 billion reais, surpassing a Refinitiv estimate of 4.2
billion reais. EBITDA margin rose 0.5 percentage point to 39.8%.
    The local subsidiary of Spain's Telefonica  TEF.MC , which
operates under the Vivo brand, posted a 5.1% fall in quarterly
net revenue to 10.3 billion reais, driven by both mobile and
landline services. The company also cited an almost 41% drop in
smartphone sales as stores closed amid the COVID-19 outbreak.
    Recurring operating costs dipped by 5.9% to 6.2 billion
reais, mostly as a result of the store closures, while financial
expenses plunged 68.9% as the company reduced its net debt. 
    That offset a 5.3% rise in depreciation and amortization
costs amid the expansion of Telefonica Brasil's fiber network.
    Vivo's total customer base shrank 2.5% to 92 million users,
with 0.9% growth in the mobile segment -- in which the carrier
accounts for a third of the market, the largest level in 14
years -- failing to compensate for a 14.6% drop in fixed-line
business.
    The company invested 1.909 billion reais in the
second-quarter, almost a fifth less than in the same period of
2019, focusing mostly on the expansion of its fiber-to-the-home
(FTTH) network, as well as 4G and 4.5G coverage.
    ($1 = 5.1533 reais)

 (Reporting by Gabriela Mello, editing by Louise Heavens,
Kirsten Donovan)
 ((Gabriela.Mello@thomsonreuters.com; +55 11 5644 7553; Reuters
Messaging: gabriela.mello.reuters.com@reuters.net))
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