2Q20 Results: Telefônica Brasil S.A.

Rhea-AI Summary

Telefônica Brasil reported its 2Q20 results, highlighting a net income of R$ 1,113 million, down 21.6% year-over-year. Despite a 5.1% decline in net operating revenues at R$ 10,317 million, EBITDA remained relatively stable at R$ 4,103 million with a margin of 39.8%. The company saw strong growth in FTTH subscribers, up 31.9% year-over-year. Free cash flow after lease payments increased significantly by 62.6% to R$ 5,362 million in the first half of 2020. Operating costs decreased by 5.9% due to reduced commercial activities, while investments in network expansion continued with R$ 1,909 million in capex.

AI-generated analysis. Not financial advice.

Positive

• Free cash flow after leases rose by 62.6% to R$ 5,362 million in 6M20.
• EBITDA margin improved by 0.5 p.p. to 39.8%.
• Significant growth in FTTH subscribers (+31.9% y-o-y) with record-breaking additions.
• Capex reached R$ 1,909 million, focusing on network quality and expansion.

Negative

• Net income declined by 21.6% year-over-year to R$ 1,113 million.
• Net operating revenues decreased by 5.1% to R$ 10,317 million.
• Mobile revenues faced interruption due to lower commercial activity from the pandemic.

News Market Reaction – VIV

-0.92%

1 alert

-0.92% News Effect

On the day this news was published, VIV declined 0.92%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

SÃO PAULO, July 29, 2020 /PRNewswire/ -- Telefônica Brasil - (B3: VIVT3 [Common Shares] / VIVT4 [Preferred Shares]; NYSE: VIV), announces its results for 2Q20. 

Investments focused on the future technologies maintaining solid cash generation in the quarter and maximizing shareholder profitability.

R$ million	2Q20	% y-o-y	6M20	% y-o-y
Net Operating Revenues	10,317	(5.1)	21,142	(3.2)
Net Mobile Revenues	6,618	(5.1)	13,688	(2.6)
Net Handset Revenues	373	(40.9)	954	(22.4)
Net Fixed Revenues	3,700	(5.1)	7,454	(4.3)
Operating Costs	(6,214)	(5.9)	(12,532)	(5.2)
Recurring Operating Costs	(6,214)	(5.9)	(12,608)	(4.6)
EBITDA	4,103	(3.8)	8,610	(0.2)
EBITDA Margin	39.8%	0.5 p.p.	40.7%	1.2 p.p.
Recurring EBITDA	4,103	(3.8)	8,534	(1.1)
Recurring EBITDA Margin %	39.8%	0.5 p.p.	40.4%	0.9 p.p.
Net Income	1,113	(21.6)	2,266	(17.9)
Free Cash Flow after Lease Payments	2,772	27.3	5,362	62.6
Total Subscribers (thousand)	92,012	(2.5)	92,012	(2.5)
Mobile subscribers	74,408	0.9	74,408	0.9
Fixed subscribers	17,603	(14.6)	17,603	(14.6)

Broadband accesses reached 6,554 thousand customers in 2Q20 and FTTH had record-breaking 210 thousand net additions, making the fiber subscriber base grow 31.9% y-o-y. Broadband ARPU increased 17.6% versus 2Q19, reaching R$ 74.5.

Mobile market share of 33.0% in May 2020, 8.6 p.p. more than the second player. Postpaid accesses grew 3.4%, accounting for 57.9% of total mobile accesses, with a market share of 38.9% in May 2020, up 14.2% over 2Q18.

FTTH and IPTV revenues continue to grow significantly (+47.6% y-o-y and +22.3% y-o-y, respectively) while the trend of mobile revenue growth was interrupted by lower commercial activity caused by the pandemic.

Operating costs decreased 5.9% y-o-y mainly due to lower commercial activity and lower commercial expenses due to digitalization and automation initiatives.

EBITDA totaled R$ 4,103 million in 2Q20, down 3.8% y-o-y, with an EBITDA margin of 39.8% (+0.5 p.p. y-o-y).

Capex totaled R$ 1,909 million in 2Q20, focused on the expansion of the FTTH network and increased quality and capacity of our 4G and 4.5G networks.

Net income stood at R$ 1,113 million in 2Q20 with profit distribution based on the 2Q20 reaching R$900 million.

Free cash flow after leasing grew 62.6% y-o-y, to R$ 5,362 million in 6M20.

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

View original content:http://www.prnewswire.com/news-releases/2q20-results-telefonica-brasil-sa-301102036.html

SOURCE Telefônica Brasil

FAQ

What were Telefônica Brasil's net income results for 2Q20?

Telefônica Brasil reported a net income of R$ 1,113 million for 2Q20, which is a decrease of 21.6% year-over-year.

How did net operating revenues perform in 2Q20 for VIV?

Net operating revenues decreased by 5.1% to R$ 10,317 million in 2Q20.

What is the EBITDA margin reported by Telefônica Brasil for 2Q20?

The EBITDA margin for Telefônica Brasil in 2Q20 was 39.8%, reflecting an increase of 0.5 percentage points year-over-year.

What significant growth did FTTH subscribers see in 2Q20?

FTTH subscribers grew by 31.9% year-over-year, reaching a record-breaking addition of 210 thousand.

What was the free cash flow after lease payments for VIV in 6M20?

Free cash flow after lease payments for Telefônica Brasil was R$ 5,362 million in the first half of 2020, up 62.6% year-over-year.