Telefonica Brasil SA ((VIV)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Telefonica Brasil SA’s recent earnings call highlighted a generally positive sentiment, with strong performances in key areas such as postpaid mobile and fiber connectivity. The company reported significant growth in revenue and EBITDA, alongside advancements in ESG initiatives and shareholder returns. However, challenges were noted in prepaid mobile revenue and volatility in real estate asset sales.
Postpaid Mobile Growth
The postpaid mobile segment experienced a robust growth of 7.3% year-over-year, now making up 68% of Telefonica Brasil’s total mobile customer base. This translates to approximately 103 million connections, underscoring the company’s successful strategy in this area.
Fiber Connectivity Expansion
Telefonica Brasil reported a 12.7% increase in fiber connections year-over-year, with 7.6 million homes connected. The company’s fiber network now covers 30.5 million homes nationwide, reflecting its commitment to expanding high-speed internet access.
Revenue and EBITDA Growth
The company saw a 6.5% rise in total revenues, driven by a 5.5% increase in mobile service revenues and a 9.6% increase in fixed services. EBITDA grew by 9% year-over-year, with a margin expansion to 43.4%, highlighting efficient operational management.
Strong Cash Flow and Shareholder Returns
Operating cash flow reached BRL 11.2 billion, marking a 12.4% increase year-over-year. Telefonica Brasil returned BRL 5.7 billion to shareholders by September, showcasing its focus on delivering value to investors.
B2B Segment Performance
The B2B segment achieved revenues of BRL 13.2 billion, a 15% increase year-over-year, with digital B2B growing by an impressive 34.2%. This indicates strong demand for business services and digital solutions.
ESG Initiatives
Telefonica Brasil launched the Futuro Vivo Forest initiative aimed at regenerating the Amazon. The company received top rankings in sustainability indices and was recognized for its corporate social responsibility efforts, reinforcing its commitment to ESG principles.
Prepaid Mobile Revenue Challenges
Despite a 7.6% decline in prepaid segment revenues, there is a positive trend due to increased customer base recharging and data usage. The prepaid market remains competitive, impacting revenue growth, but trends are showing signs of improvement.
Volatility in Real Estate Asset Sales
The sale of real estate assets related to concession migration showed volatility, with BRL 199 million generated from real estate sales this quarter. This reflects ongoing challenges in stabilizing this revenue stream.
Guidance
Looking forward, Telefonica Brasil anticipates continued robust financial performance. The company expects ongoing growth in mobile postpaid access and fiber connections, with total revenues projected to rise, driven by increases in both mobile and fixed services. EBITDA and cash flow are also expected to continue their upward trajectory, with a strong focus on returning value to shareholders.
In summary, Telefonica Brasil’s earnings call conveyed a strong performance across key segments, with notable growth in postpaid mobile and fiber connectivity. While challenges persist in prepaid mobile revenue and real estate asset sales, the company’s forward-looking guidance remains optimistic, highlighting its strategic focus on sustainable growth and shareholder value.