Telefonica Brasil 3Q Net Profit Rises on Lower Costs

By Rogerio Jelmayer

SAO PAULO--Telefonica Brasil SA's (VIV, VIVT4.BR) third-quarter net profit increased 34.5% in the period as the company reported lower operating and debt-service costs.

The company, which is controlled by Spain's Telefonica SA (TEF, TEF.MC), posted a net profit of 1.02 billion Brazilian reais ($400 million), up from BRL760 million in the year-ago period.

Telefonica's operating costs decreased 1% in the period to BRL6.17 billion, while company's debt-service costs dropped 3.9% to BRL616.4 million.

The company's net revenue increased just 1.2% in the period to BRL8.7 billion. Revenue from mobile-phone services increased 3.5% to BRL5.63 billion, while revenue from fixed lines fell 3.2% to BRL2.79 billion.

Earnings before interest, taxes, depreciation and amortization increased to BRL2.55 billion from BRL2.38 billion. Ebitda margin fell to 29.5% from 30.3%.

The company had 95.4 million customers at the end of the quarter, up from 91.7 million in the year-ago period.

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

In the third quarter, Telefonica Brasil invested a total of BRL1.56 billion in its operations, down from BRL1.87 billion in the year ago period.

Write to Rogerio Jelmayer at [e-mail]

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