2Q17 Results: Telefônica Brasil S.A.

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Jul 26, 2017, 06:03 ET

SAO PAULO, July 26, 2017 /PRNewswire/ -- Telefônica Brasil - (Bovespa: VIVT3 [Common Shares] / VIVT4 [Preferred Shares]; NYSE: VIV), announces its results for the 2Q17. Solid performance in mobile data and ultra-broadband, and continuous efficiency in costs and investments drives to strong 6.9% y-o-y growth in recurring EBITDA and 11.7% y-o-y growth in Operating Cash Flow.

Consolidated in R$ million	2Q17	% y-o-y

Net Operating Revenues	10,697.2	1.8
Net Operating Services Revenues	10,434.6	2.3
Net mobile services revenues	6,271.7	4.8
Net fixed revenues	4,162.9	(1.3)
Net handset revenues	262.6	(15.2)
Recurring Operating costs	(7,168.8)	(0.6)
Operating costs*	(7,168.8)	(1.9)
Recurring EBITDA	3,528.4	6.9
Recurring EBITDA Margin %	33.0%	1.6 p.p.
EBITDA*	3,528.4	10.3
EBITDA Margin %*	33.0%	(2.5 p.p.)
Net Income	872.9	24.8

Number of accesses (thousand)	97,585	0.5
Mobile accesses	74,335	1.4
Fixed accesses	23,250	(2.1)
* Adjusted by the provision for organizational restructuring in 2Q16 in the amount of R$ 101.2 million

Mobile Market share expansion, reaching 30.7% in 2Q17 (+1.8 p.p. y-o-y).

Mobile ARPU recorded y-o-y growth of 3.6% in 2Q17, fueled by a higher share of postpaid clients in the mix and increased data usage. Data ARPU grew 30.8% y-o-y in 2Q17, corresponding for 71.6% of total ARPU.

Broadband accesses totaled 7.4 million customers in 2Q17 (+2.6% y-o-y), with FTTx^[1] connections already accounting for 58.7% of the base after a y-o-y growth of 8.5%. Broadband ARPU increased 10.9% in 2Q17 over 2Q16, influenced by the evolution of ultra-broadband customer base.

Net operating service revenue grew 2.3% in 2Q17 over 2Q16 (4.2% up y-o-y excluding regulatory effects), maintaining the positive trajectory observed in the last quarters.

Mobile services revenue rose 4.8% y-o-y in 2Q17. Excluding the effect from MTR reductions in 2017, this line increased 7.0% over 2Q16. Data and digital services revenues increased 32.4% y-o-y in 2Q17, accounting for 71.8% of mobile services revenue.

Recurring Operating costs fell 0.6% in 2Q17 over 2Q16 (LTM IPCA +3.0%), demonstrating the continued efforts and focus on pursuit of efficiencies, synergy delivery and end-to-end digitalization. Including the non-recurring effect of the organizational restructuring in 2Q16, costs decreased 1.9%.

Recurring EBITDA totaled R$3.5 billion in 2Q17, 6.9% up on 2Q16, yielding an EBITDA margin of 33.0% (+1.6 p.p. y-o-y), fueled by the acceleration of mobile service revenues and efficiency measures adopted by the Company.

CAPEX amounted to R$1.8 billion in 2Q17, focused on 4G coverage (657 new cities added in the quarter, totaling 961 in the first semester) and FTTH expansion (5 new cities with FTTH in the year).

Recurring EBITDA - Capex grew 11.7% in 2Q17 over 2Q16, reaching R$1.7 billion.

Net income totaled R$872.9 million in 2Q17 (+24.8% y-o-y), with IOC for the fiscal year amounting to R$625.0 million in 2017.

To download the complete version of the Company's earnings release, please visit our website: http://www.telefonica.com.br/ir

^[1] FTTx includes FTTH (Fiber to the home), FTTC (Fiber to the cabinet) and cable customers

SOURCE Telefônica Brasil S.A.