Vivendi (BIT:VIV)
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Portugal Telecom SGPS SA (PT) said Thursday first-quarter net profit rose 19%, bolstered by strong revenue growth at Brazilian joint-venture Vivo Participacoes (VIV) and lower taxes.

PT, as Portugal's biggest telecommunications company by market capitalization and subscribers is also known, also said its board will propose a dividend of EUR0.575 a share for fiscal years 2009, 2010 and 2011, subject to market and financial conditions.

The company reported net profit of EUR166.4 million for the first three months of the year, up from EUR139.8 million a year earlier.

Revenue rose 2.1% to EUR1.60 billion, while earnings before interest, taxes, depreciation and amortization fell 1% to EUR602.6 million. Tax provisions fell to EUR56 million in the first quarter, down from EUR79 million a year earlier.

The company's bright spot continues to be Brazilian mobile company Vivo, which it operates jointly with Spain's Telefonica SA (TEF). Vivo reported earlier this month a 26% rise in first-quarter net profit to $58.5 million, as revenue jumped close to 23%.

PT said its EUR650 million in planned capital expenditures in Portugal for 2009 will rise by 10% with the rollout of a new fiber-optic network, which seeks to cover one million households with high-speed data and telecommunications services this year.

European telecommunications companies have been cutting capital expenditures and operating expenses in order to maintain cash, as a drop in consumer spending hits operations.

At 0725 GMT, Portugal Telecom shares were leading gainers in the Lisbon stock exchange, rising 3.8% to EUR6.76, while Lisbon's key PSI-20 index was down 1%.

Company Web site: www.telecom.pt

-By Santiago Perez, Dow Jones Newswires, 34 913958119, santiago.perez@dowjones.com