Telefonica Brasil 2nd-Quarter Net Profit More Than Doubles on Tax Review Gains

   By Rogerio Jelmayer 
 

SAO PAULO--Telefonica Brasil SA's (VIV, VIVT4.BR) second-quarter net profit more than doubled in the period on a one-time gain generated by changes in its tax basis.

The company, which is controlled by Spain's Telefonica SA (TEF, TEF.MC), posted a net profit of 1.99 billion Brazilian reais ($897 million), up from BRL914.2 million in the year-ago period.

Telefonica Brasil said its review of tax basis to reflect certain intangibles from the combination of businesses resulted in a BRL1.19 billion positive effect on earnings.

Telefonica net revenue increased just 1.5% in the period to BRL8.6 billion. Operational costs picked up 2.6% to BRL6.07 billion.

Revenue from mobile-phone services increased 6% to BRL5.53 billion, while revenue from fixed lines fell 5.4% to BRL2.79 billion.

Earnings before interest, taxes, depreciation and amortization decreased to BRL2.54 billion from BRL2.58 billion. Ebitda margin fell to 29.5% from 30.3%.

The company had 93.9 million customers at the end of the quarter, up from 91.13 million in the year-ago period.

Telefonica Brasil is the largest mobile-phone company by market share, according to telecommunications regulator Anatel.

In the second quarter, Telefonica Brasil invested a total of BRL1.61 billion in its operations, up from BRL1.25 billion in the year ago period.

Write to Rogerio Jelmayer at [e-mail]

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