UPDATE: Brazil's Vivo Sees 2009 Earnings More Than Double

Brazil's largest cellular operator, Vivo Participacoes (VIV VIVO4.BR), on Wednesday reported that its 2009 profit more than doubled amid rising revenue and cost controls.

The company, which is jointly controlled by Spain's Telefonica (TEF TEF.MC) and Portugal Telecom SGPS SA (PT PTC.LB), posted a net profit of 857.5 million Brazilian reals ($464 million), more than double the BRL389.7 million seen in 2008.

Vivo's net revenue rose 3.4% to BRL16.36 billion from BRL15.82 billion in the year-ago period. Increased sales of data and value-added products offset the decline in revenue from handset sales as the company focused more on selling chips.

The company's client base expanded 15% from the previous year to 51.7 million.

The company's earnings before interest, taxes, depreciation and amortization, or Ebitda, were BRL5.2 billion, up from BRL4.8 billion in 2008. The Ebitda margin, a measure of profitability over net revenue, was 31.9% in 2009, up from 30.8% a year earlier.

Vivo's total operational costs increased less than its revenue in the period. The company's costs totaled BRL11.1 billion in 2009, up 1.8% from 2008.

In the fourth-quarter, the company's net profit totaled BRL221.6 million, down slightly from BRL222.1 million seen in the fourth quarter of 2008.

The company's attributed the slight reduction of its net profit in the quarter, among other factors, to the increase of loss with depreciation and amortization, which totaled BRL834 million in the period, up 3.4% from the same quarter of 2008.

Vivo's fourth-quarter net revenue rose 1.2% to BRL4.32 billion from BRL4.27 billion in the year-ago period.

The company's Ebitda was BRL1.41 billion, up from BRL1.39 billion in the fourth quarter of 2008.

The company said it will invest BRL2.49 billion in its operations this year. By comparison, last year Vivo invested a total of BRL2.37 billion in its operations.

-By Rogerio Jelmayer, Dow Jones Newswires; 5511-2847-4521; [e-mail]