1Q22 Results: Telefônica Brasil S.A.

Rhea-AI Summary

Telefônica Brasil (B3: VIVT3; NYSE: VIV) reported a historic net revenue growth of 4.6% YoY in 1Q22, reaching R$ 11,352 million, marking its highest growth in seven years. The company achieved a total of 100 million accesses, with 91.9% being core subscribers. Mobile service revenue rose by 5.7%, bolstered by 1.3 million new postpaid customers. However, total costs increased by 7.0%, outpacing inflation at 11.3%. EBITDA was R$ 4,511 million, with a margin of 39.7%. The acquisition of Oi’s mobile assets could yield R$ 5.4 billion in synergies.

Positive

• 4.6% YoY net revenue growth, totaling R$ 11,352 million.
• Total accesses increased to 100 million, with core subscribers at 91.9%.
• Mobile revenue grew by 5.7%, driven by 1.3 million new postpaid customers.
• EBITDA increased by 1.3% YoY, reaching R$ 4,511 million.
• Acquisition of Oi's mobile assets expected to generate R$ 5.4 billion in synergies.

Negative

• Total costs rose by 7.0% YoY, higher than the revenue growth rate.

SÃO PAULO, May 10, 2022 /PRNewswire/ -- Telefônica Brasil - (B3: VIVT3; NYSE: VIV), announces its results for 1Q22. 

Highest net revenue growth in 7 years, led by a historic mark of 100 million total accesses.

R$ million	1Q22	1Q21	% YoY
Net Operating Revenues	11,352	10,849	4.6
Core Revenue	10,285	9,563	7.5
Mobile Revenue	7,581	7,147	6.1
Fixed Core Revenue	2,704	2,416	11.9
Non-Core Revenue	1,067	1,286	(17.0)
Total Costs	(6,840)	(6,394)	7.0
EBITDA	4,511	4,455	1.3
EBITDA Margin	39.7%	41.1%	(1.3) p.p.
Net Income	750	942	(20.4)
Capex | Ex- IFRS 16	1,880	1,943	(3.3)
Operating Cash Flow (OpCF)	2,631	2,511	4.8
OpCF/Net Revenue Margin	23.2%	23.1%	0.1
Free Cash Flow after Lease Payments	2,477	2,199	12.6
Total Subscribers (thousand)	99,942	95,809	4.3
Core Subscribers	91,833	85,816	7.0
Non-Core Subscribers	8,109	9,993	(18.8)

 

Mobile Service Revenue grew 5.7% YoY led by Postpaid Revenue which increased 5.9% on a yearly comparison. Revenue expansion was driven by 1.3 million new customers in the postpaid segment during the last quarter.  

Total accesses reached 100 million accesses, +4.1 million compared to 1Q21. Core services subscribers account now for 91.9% of all accesses, a 2.3 p.p. YoY increase.

Vivo reached 4.8 million (+29.1% YoY) homes connected with FTTH. Currently, Vivo's FTTH coverage is available in 341 cities (+14 cities in 1Q22), with 20.5 million homes passed.

Net revenue increased +4.6% YoY, registering Vivo's largest revenue growth in 7 years, with an astonishing representativeness of the core businesses which now accounts for 90.6% (+2.5 p.p.) of total revenues. Core fixed revenue was boosted by the 25.9% YoY increase of FTTH revenues, and core mobile revenue saw a robust increase in handset revenue (+10.0% YoY) and the 5.9% growth in postpaid service.

Total Costs grew 7.0% YoY, while the inflation had an increase of 11.3%. The change in the cost mix is related to the strong revenue growth in handset and digital services.

EBITDA totaled R$4,511 million (+1.3% YoY) in 1Q22, with an EBITDA margin of 39.7%.

In 1Q22, we bought back R$ 115 million in shares with the new Share Buyback Program that will last until Feb-23. In the last 12 months, the Company registered 113% in dividend payout, and a 7.6% dividend yield.

Free Cash Flow after Leasing payments reached R$ 2.5 billion this quarter (+12.6% YoY).

In April 2022, Telefônica Brasil concluded the acquisition of Oi's mobile assets with potential synergies of R$ 5.4 billion. Synergies will come from the optimization of operation costs and efficient allocation of investments due to the integration of incorporated assets, thus benefiting the Brazilian telecommunications sector and reinforcing Vivo's mobile leadership.

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

View original content:https://www.prnewswire.com/news-releases/1q22-results-telefonica-brasil-sa-301544470.html

SOURCE Telefônica Brasil

FAQ

What were Telefonica Brasil's net revenues for 1Q22?

Telefonica Brasil reported net revenues of R$ 11,352 million for 1Q22, marking a 4.6% increase YoY.

How did total accesses change for VIV in 1Q22?

Total accesses for Telefonica Brasil reached 100 million in 1Q22, up by 4.1 million compared to 1Q21.

What is the EBITDA for Telefonica Brasil in 1Q22?

The EBITDA for Telefonica Brasil in 1Q22 was R$ 4,511 million, reflecting a 1.3% increase YoY.

What is the impact of the acquisition of Oi's mobile assets for VIV?

The acquisition of Oi's mobile assets is expected to create potential synergies of R$ 5.4 billion for Telefonica Brasil.

What was the free cash flow after leasing payments for VIV in 1Q22?

The free cash flow after leasing payments reached R$ 2.5 billion in 1Q22, an increase of 12.6% YoY.