3Q16 Results: Telefônica Brasil S.A.

SAO PAULO, Oct. 25, 2016 /PRNewswire/ -- Telefônica Brasil - (Bovespa: VIVT3 [Common Shares] / VIVT4 [Preferred Shares]; NYSE: VIV), announces its results for the 3Q16. In 3Q16, Vivo maintains capture of synergies and efficiency initiatives, with solid margin expansion and cash flow generation.

Consolidated in R$ million	3Q16	% y-o-y	9M16	% y-o-y
Net Operating Revenues	10,693.4	1.1	31,634.8	0.8
Net mobile revenues	6,439.0	2.7	18,945.6	1.3
Net fixed revenues	4,254.4	(1.4)	12,689.2	0.2
Operating costs	(7,283.1)	(2.2)	(21,235.7)	(3.9)
Recurring Operating costs*	(7,283.1)	(1.9)	(21,648.0)	(1.9)
EBITDA	3,410.3	8.8	10,399.1	12.0
EBITDA Margin %	31.9%	2.3 p.p.	32.9%	3.3 p.p.
Recurring EBITDA*	3,410.3	8.1	9,986.8	7.4
Recurring EBITDA Margin %*	31.9%	2.1 p.p.	31.6%	1.9 p.p.
Net income	952.7	9.6	2,870.4	29.5
Number of accesses (thousand)	97,202	(6.2)	97,202	(6.2)
Mobile accesses	73,495	(7.5)	73,495	(7.5)
Fixed accesses	23,707	(2.3)	23,707	(2.3)
(*) Adjusted by the towers sale in 1Q16 in the amount of R$ 513.5 million, provision for organizational restructure in 2Q16 in the amount of R$ 101.2 million and in 3Q15 in the amount of R$ 19.2 million.

Leadership in postpaid, with continued growth (+6.8% y-o-y in 3Q16) and share of net additions reaching 42.9% until August 2016. Postpaid market share stood at 42.4% in August (+0.3 p.p. y-o-y).

Mobile ARPU recorded y-o-y growth of 14.9% in 3Q16, driven by market rationality, the increased mix of postpaid clients and the 35% y-o-y growth in Data ARPU, which corresponded to 58.9% of total ARPU in the period.

Broadband accesses totaled 7.3 million in 3Q16 (+1.8% y-o-y), with FTTx accounting for 56.3% of the total accesses and with an 8.6% y-o-y growth. Broadband ARPU increased by 7.8% y-o-y in 3Q16, influenced by the growth in the ultra-broadband customer base.

Pay TV accesses totaled 1.8 million in 3Q16, with IPTV growth of 38.5%, while pay TV ARPU grew 12.4%, reflecting the Company's strategy of focusing on higher-value clients.

Net operating services revenue grew 2.2% in 3Q16 over 3Q15 (+4.5% y-o-y excluding regulatory effects), maintaining its positive performance.

Mobile services revenue climbed 4.9% y-o-y in 3Q16. Excluding the effect of MTR reductions in 2016, this line increased 7.0% over 3Q15. Data and digital services revenue rose 23.3% y-o-y in 3Q16, driven by the strong increase in mobile internet revenue, which grew 36.4% over 3Q15.

Operating costs fell 2.2% y-o-y in 3Q16. Excluding the effect from the corporate restructuring in 3Q15, the reduction was 1.9%, reflecting the continuous efforts to reduce costs by focusing on increasing efficiency and synergies.

EBITDA totaled R$3.4 billion in 3Q16, 8.8% up on 3Q15, with an EBITDA margin of 31.9% (+2.3 p.p. y-o-y). Excluding the R$19.2 million non-recurring effect in 3Q15, EBITDA climbed 8.1% y-o-y, with a margin increase of 2.1 p.p. over the previous year, driven by the capture of synergies and efficiency initiatives.

Third-quarter investments amounted to R$1.9 billion, accounting for 18.2% of net operating revenue. Recurring EBITDA – Capex grew by 42.3% over 3Q15, with a strong expansion in FCF (+36.7% y-o-y).

The focus on executing synergies guaranteed the capture of 64% of NPV of best case scenario and fully delivering the NPV of the base case scenario.

TELEFÔNICA BRASIL – Investor Relations
Amos Genish
David Melcon
Luis Plaster
Maria Tereza David
[phone] / [e-mail]

To download the complete version of the Company's earnings release, please visit our website: http://www.telefonica.com.br/ir

Contact:
Telefônica Brasil S.A.
Av. Eng. Luis Carlos Berrini, 1376 - 28º andar
São Paulo - 04571-936
Telephone: [phone]
E-mail: [e-mail]

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SOURCE Telefonica Brasil S.A.

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