Telefônica Brasil S.A.: 2Q18 Results

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Jul 25, 2018, 06:20 ET

SÃO PAULO, July 25, 2018 /PRNewswire/ -- Telefônica Brasil - (B3: VIVT3 [Common Shares] / VIVT4 [Preferred Shares]; NYSE: VIV), announces its results for the 2Q18.

Growth of Net Mobile Revenue, allied to the digital transformation which contributed to the tenth consecutive quarter of recurring costs reduction, guarantee solid EBITDA evolution in the quarter.

Consolidated in R$ million	2Q18 (Pro forma)	% y-o-y

Net Operating Revenues	10,817.8	1.1
Net Mobile Revenues	6,810.1	4.2
Net Fixed Revenues	4,007.7	(3.7)
Recurring Operating Costs	(7,085.4)	(1.2)
Recurring EBITDA	3,732.4	5.8
Recurring EBITDA Margin %	34.5	1.5 p.p.
Net Income	3,166.3	262.7

Total Accesses (thousand)	97,799	0.2
Mobile Accesses	75,262	1.2
Fixed Accesses	22,537	(3.1)

Mobile Market share expansion, reaching 31.9% in May 2018 (+1.2 p.p. y-o-y). Mobile Postpaid accesses increased 10.8% y-o-y, reaching 41.3% of market share in May 2018 (17.8 p.p. above the second player).

Mobile ARPU recorded y-o-y growth of 0.5% in 2Q18 reaching R$28.3, fueled by a higher share of postpaid clients in the mix and increased data usage, mainly in digital services. As a result, Data ARPU grew 10.0% y-o-y in 2Q18.

Broadband accesses totaled 7.5 million customers in 2Q18 (+0.4% y-o-y), with UBB connections already accounting for 64.2% of the base after a y-o-y growth of 9.8% (with 162 thousand FTTH net additions in the 2Q18 – record level of FTTH net additions). Broadband ARPU increased 12.0% in 2Q18 over 2Q17, influenced by the evolution of the ultra-broadband customer base.

Net Operating Revenues grew 1.1% in 2Q18 over 2Q17.

Net Mobile Revenues rose 4.2% y-o-y in 2Q18. This growth was mainly driven by the expansion of Data and Digital Service Revenues (+11.5% y-o-y), higher Net Handset Revenues (+60.5% y-o-y) and the dissemination of unlimited voice plans in the sector that positively impacted Interconnection Revenues (+22.8% y-o-y).

Recurring Operating Costs fell 1.2% in 2Q18 versus 2Q17 (LTM IPCA +4.4%), driven by the digital transformation process in place at Telefônica Brasil.

Recurring EBITDA totaled R$3.7 billion in 2Q18, 5.8% up on 2Q17, yielding a Recurring EBITDA margin of 34.5% (+1.5 p.p. y-o-y), fueled by the increase in Net Mobile Revenues and cost discipline.

CAPEX amounted to R$2.1 billion in 2Q18, mainly focused on improving network capacity and 4G/4G+ coverage (more than 700 cities with 4G+ coverage), 98 cities with FTTH, launching 10 new cities in the first seven months of the year.

Recurring Operating Cash Flow (Recurring EBITDA – Capex) reached R$3,811.5 million in 6M18, slightly lower than the same period in 2017 due to the higher level of investments in the first half of 2018. Free Cash Flow from Business Activities rose 13.9% in 6M18, reaching R$3.0 billion in the quarter.

Net Income (Reported) totaled R$3.2 billion in 2Q18 (+262.7% y-o-y), on the back of extraordinary judicial gains registered in the quarter, and solid EBITDA expansion.

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

SOURCE Telefônica Brasil S.A.