News
Troubled Brazilian operator reports 24% decline in Q2 EBITDA, posts sizeable net loss.
Oi this week reported a hefty decline in second-quarter earnings, but there were indications that a reorganisation plan will be presented to creditors within the next month.
The Brazilian mobile operator, which filed for bankruptcy protection in June, reported EBITDA of 1.44 billion reais (€410 million) in Q2, down by 24.4% on the year-ago quarter. Revenues declined by 3.8% to BRL6.52 billion, while the company posted a consolidated net loss of BRL656 million, compared with a BRL442 million loss in the same period of 2015.
Oi’s headline figures were affected to an extent by a declining customer base.
The telco lost 240,000 mobile customers in Brazil in Q2, reducing its base to 45.32 million; net disconnections totalled 2.44 million over 12 months, it admitted, the vast majority of which were prepaid users.
It also saw revenue-generating units decline by 17,000 in its domestic residential fixed-line business during the quarter, with growth in its fixed broadband and pay TV businesses failing to offset a drop in fixed lines in service.
However, ARPU in the residential business grew by 4.5% year-on-year and 1.6% quarter-on-quarter to BRL82.1.
Oi’s available cash plummeted to BRL5.11 billion from BRL16.64 billion a year earlier and BRL8.53 billion at the end of Q1, on the back of amortisation of debt and interest payments. At the end of the quarter Oi’s net debt stood at BRL41.39 billion, up by 19.5% year-on-year and 1.3% sequentially, mainly as a result of the payment of the last instalment of its 3G licence and severance costs, the operator said.
"Under judicial reorganisation Oi continues with its strategic plan focused on digitalisation, convergence, data, cost control and improved user experience, and it has recorded operational advances in its business segments, especially the residential segment," Oi said, in its results announcement, adding that it has "been working on a judicial reorganisation plan, which will be presented to its creditors."
Creditors will receive that plan later this month or early in September, Reuters quoted Oi CEO Marco Schroeder as saying on Wednesday.
The plan will involve a debt-for-equity swap, he added, but did not elaborate.
