Boston, MA 05/29/2014 (wallstreetpr) – Oi SA (ADR) (NYSE:OIBR) continued to make progress in its performance during first quarter 2014 through cost control measures, monetization of assets and synergies.
The Revenue Generating Units (RGUs) remained stable at 74.6 million during 1Q2014 as a result of increasing focus on profitability and sales quality. The RGUs includes 17.7 million residential, 48.1 million Personal Mobility and 8.1 million Corporate/SMEs.
Operational Highlights
Net revenues during the quarter were down by 2.3% to R$6.9 billion versus R$7.0 billion in 1Q2013, primarily due to decline in mobile termination rates across Personal Mobility and Corporate/SMEs segments.
Personal mobility represented 31.5% of net revenues in 1Q2014 and decreased due to lower network usage. The decline was partially offset by stable growth in residential (37.1% of net revenues) and Corporate/SMEs (30.4% of net revenue).
However, the gain from the sale of mobile towers and lower operating expenses (down by 4.8%) increased the operating (EBITDA) margin to 43% versus 30.5% a year ego. Excluding the one-time gain, the Company’s adjusted (routine) EBITDA increased by 6% to R$1.7 billion compared to prior year period as a result of business transformation and gain in efficiency. So, the routine EBITDA margin increased to 24.9%, up by 2 percentage points versus 1Q2013.
But, higher financial costs and income tax reduced the year over year net earnings by 13% to R$227 million or R$0.139 per share.
Higher routine EBITDA and controlled capital expenditures of R$1.2 billion (down by 29%) raised the routine operating cash flow to R$502 million.
Financing Highlights
As of March 31, 2014, Oi SA (ADR) (NYSE:OIBR) had cash balance of R$4.2 billion, so, the net debt available for the period R$30.3 billion, including long-term debt of R$30 billion.
Conclusion
Oi SA (ADR) (NYSE:OIBR) continues to work over business transformation across the operating segments. In addition, the synergies between Oi and PT will further improve the operational efficiency going forward.
