3Q20 Results: Telefônica Brasil S.A.

Rhea-AI Summary

Telefônica Brasil announced its 3Q20 results on Oct. 27, showcasing record fiber net adds and a recovery in prepaid services. Net Operating Revenues were R$10,792 million (-2.3% y-o-y), while Net Income rose by 25.5% to R$1,212 million. The company achieved a 40.0% EBITDA margin on R$4,322 million EBITDA. The fiber broadband customer base increased by 34.2%, accounting for nearly half of broadband accesses. Free Cash Flow reached R$3,540 million, up 34.5% y-o-y. The launch of Vivo Money, a digital lending platform, marked the expansion into financial services.

Positive

• Net Income increased by 25.5% to R$1,212 million.
• Free Cash Flow after leasing payments rose by 34.5% to R$3,540 million.
• Record fiber customer additions of 3,130 thousand (+34.2% y-o-y).
• EBITDA margin remained strong at 40.0% despite a slight decline in EBITDA.

Negative

• Net Operating Revenues decreased by 2.3% to R$10,792 million.
• Recurring EBITDA declined by 3.5% year-over-year.

SAO PAULO, Oct. 27, 2020 /PRNewswire/ -- Telefônica Brasil - (B3: VIVT3 [Common Shares] / VIVT4 [Preferred Shares]; NYSE: VIV), announces its results for 3Q20. 

Record fiber net adds and recovery of prepaid confirms Vivo's sequential operating improvement combined with superior cash generation

 

R$ million	3Q20	% y-o-y	9M20	% y-o-y
Net Operating Revenues	10,792	(2.3)	31,934	(2.9)
Net Mobile Revenues	7,163	0.0	20,852	(1.7)
Net Handset Revenues	710	10.1	1,664	(11.2)
Net Fixed Revenues	3,628	(6.6)	11,082	(5.1)
Operating Costs	(6,470)	(0.6)	(19,002)	(3.7)
Recurring Operating Costs	(6,470)	(1.5)	(19,078)	(3.6)
EBITDA	4,322	(4.8)	12,932	(1.8)
EBITDA Margin	40.0%	(1.1) p.p.	40.5%	0.5 p.p.
Recurring EBITDA	4,322	(3.5)	12,856	(1.9)
Recurring EBITDA Margin %	40.0%	(0.5) p.p.	40.3%	0.4 p.p.
Net Income	1,212	25.5	3,478	(6.7)
Capex | Ex- IFRS 16	1,803	(25.8)	5,359	(17.4)
Free Cash Flow after Lease Payments	3,540	34.5	8,901	50.1
Total Subscribers (thousand)	93,718	(0.0)	93,718	(0.0)
Mobile subscribers	76,718	3.9	76,718	3.9
Fixed subscribers	17,000	(14.5)	17,000	(14.5)

 

Fiber-to-the-home broadband customers totaled 3,130 thousand (+34.2% y-o-y), posting record net additions for the third quarter in a row and representing almost 50% of broadband accesses. Overall broadband ARPU increased 17% versus 3Q19, reaching R$77.7.

Mobile market share reached 33.3% in August 2020, 8.7 p.p. more than the second player and the highest level in over 14 years. Postpaid accesses grew 3.9% y-o-y and accounted for 57.3% of total mobile accesses, with a market share of 38.5% in August 2020 and the lowest churn in 5 years.

Fiber-to-the-home and IPTV revenues continue to grow significantly (+56.0% y-o-y and +26.9% y-o-y, respectively) while mobile revenue is showing recovery to pre-pandemic levels, growing 3.3% over 2Q20.

Operating Costs decreased 0.6% y-o-y in 3Q20, due to lower costs with commercial expenses, mainly reflecting the growing digitalization and automation of customer service activities and lower commercial activity.

Recurring EBITDA totaled R$4,322 million (-3.5% y-o-y) in 3Q20, with a recurring EBITDA margin of 40.0%.

Investments of R$1,803 million in 3Q20, focused on the expansion of the fiber-to-the-home network and the quality and capacity of the 4G and 4.5G networks.

Net Income of R$1,212 million in 3Q20, up 25.5% y-o-y. Profit distribution based on 9M20 profit reaches R$2.0 billion.

Free Cash Flow after Leasing payments reached R$3,540 million in the quarter and R$8,901 million in 9M20 (+34.5% y-o-y and 50.1% y-o-y, respectively), as a result of Capex optimization and lower operating, financial and tax payments.

Financial services: launch of Vivo Money, a 100% digital platform, focused on offering fast and simple personal loans to postpaid customers.

TELEFÔNICA BRASIL – Investor Relations
Christian Gebara
David Melcon
Luis Plaster
João Pedro Carneiro
+55 11 3430-3687 / ir.br@telefonica.com 

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/3q20-results-telefonica-brasil-sa-301161218.html

SOURCE Telefônica Brasil

FAQ

What are the key financial results for Telefônica Brasil in 3Q20?

In 3Q20, Telefônica Brasil reported Net Operating Revenues of R$10,792 million, Net Income of R$1,212 million, and EBITDA of R$4,322 million.

How did the fiber broadband customer base perform in 3Q20?

The fiber broadband customer base grew by 34.2% year-over-year, totaling 3,130 thousand customers.

What was the net income increase for Telefônica Brasil in 3Q20?

Net Income increased by 25.5% compared to the same quarter last year.

What was the EBITDA margin for Telefônica Brasil in 3Q20?

The EBITDA margin for 3Q20 was 40.0%.

What is Vivo Money launched by Telefônica Brasil?

Vivo Money is a 100% digital platform offering fast and simple personal loans to postpaid customers.

How much did Free Cash Flow increase in 3Q20 for Telefônica Brasil?

Free Cash Flow increased by 34.5% year-over-year, reaching R$3,540 million.