3Q21 Results: Telefônica Brasil S.A.

Rhea-AI Summary

Telefônica Brasil (B3: VIVT3; NYSE: VIV) reported strong financial results for 3Q21, with net operating revenues reaching R$11,033 million, a 2.2% increase year-on-year. Mobile service revenue experienced its best annual growth in six years, up 5.7%, leading to a net profit surge of 8.5% to R$1,315 million.

Recurring EBITDA also grew by 2.1% to R$4,414 million, maintaining a steady margin of 40.0%. The company declared R$1.9 billion in interest on capital, realizing a dividend yield of 7.4%, while free cash flow amounted to R$2,634 million.

Positive

• Net operating revenues of R$11,033 million, up 2.2% year-on-year.
• Mobile service revenue growth of 5.7%, the highest annual increase in six years.
• Net profit increased by 8.5% to R$1,315 million.
• Recurring EBITDA rose 2.1% to R$4,414 million, with a margin of 40.0%.
• Declared R$1.9 billion in interest on capital, yielding 7.4%.
• Free cash flow after leasing payments totaled R$2,634 million.

Negative

• Recurring total costs increased by 2.3%, while growth remained below inflation.

SÃO PAULO, Oct. 27, 2021 /PRNewswire/ -- Telefônica Brasil - (B3: VIVT3; NYSE: VIV), announces its results for 3Q21. 

Fixed revenue back to growth and best mobile service revenue annual increase in 6 years, combined with net profit growing 8.5%

R$ million	3Q21	3Q20	% y-o-y	9M21	9M20	% y-o-y
Net Operating Revenues	11,033	10,792	2.2	32,532	31,934	1.9
Core Revenue	9,888	9,337	5.9	28,904	27,202	6.3
Mobile Revenue	7,391	7,163	3.2	21,529	20,852	3.2
Fixed Core Revenue	2,496	2,174	14.8	7,375	6,350	16.1
Non-Core Revenue	1,145	1,455	(21.3)	3,628	4,732	(23.3)
Total Recurring Costs	(6,620)	(6,470)	2.3	(19,437)	(19,078)	1.9
Reported Total Costs	(6,203)	(6,470)	(4.1)	(18,457)	(19,002)	(2.9)
Recurring EBITDA	4,414	4,322	2.1	13,095	12,856	1.9
Recurring EBITDA Margin %	40.0%	40.0%	(0.0) p.p.	40.3%	40.3%	(0.0) p.p.
Reported EBITDA	4,830	4,322	11.8	14,075	12,932	8.8
Reported EBITDA Margin %	43.8%	40.0%	3.7 p.p.	43.3%	40.5%	2.8 p.p.
Net Income	1,315	1,212	8.5	3,602	3,478	3.6
Capex  | Ex- IFRS 16	2,151	1,803	19.3	6,346	6,346	18.4
Free Cash Flow after Lease Payments	2,634	3,540	(25.6)	6,701	6,701	(20.5)
Total Subscribers (thousand)	97,424	93,718	4.0	97,424	97,424	4.0
Core Subscribers	88,601	82,627	7.2	88,601	88,601	7.2
Non-Core Subscribers	8,823	11,091	(20.4)	8,823	8,823	(20.4)

The customer base totaled 97.4 million accesses. The mobile customer base reached 82.3 million accesses, the highest volume since 2Q15. Postpaid accesses came to 48.1 million, an increase of +4.1 million in the last 12 months. 

Mobile market share reached 33.0% in July 2021, reaffirming Vivo's leadership in the mobile business. Vivo's market share in postpaid reached 36.8% in July 2021.

Fiber-to-the-home customers totaled 4.4 million (+39.2% y-o-y), posting strong net additions in 3Q21. Vivo Fibra is available in 309 cities (+65 cities y-o-y) with 18.3 million HPs (+3.8 million HPs in 12 months). FTTH Revenues reached R$1,137 million (+37.2% y-o-y).

Net revenues grew +2.2% y-o-y due to acceleration in mobile service revenue and return of growth in fixed revenue, driven by FTTH and Corporate Data and ICT. Mobile service revenues registered the highest growth in the last 6 years, with an expansion of +5.7% y-o-y. Total fixed revenue grows again after 4 years, with the highest relevance of the core fixed businesses.

Recurring Total Costs went +2.3% up in 3Q21, as cost base is evolving with a higher revenue from core businesses. Nevertheless, growth in costs remained substantially below inflation due to the continuous digitalization efforts.

Recurring EBITDA totaled R$4,414 million (+2.1% y-o-y) in 3Q21, with a recurring EBITDA margin of 40.0%.

Net income equaled R$1,315 million, (+8.5% y-o-y) with improved operating performance. Interest on Capital declared until September-21 reached R$1.9 billion, representing a dividend yield of 7.4% in the last 12 months. The company also accelerated its Share Buyback Program with 5.6 million shares repurchased during 3Q21.

Free Cash Flow after Leasing payments totaled R$2,634 million in 3Q21, due to the Company's efficient financial management.

Vivo and Ânima (B3: ANIM3) are negotiating a 50/50 joint venture to create a business platform focused on lifelong learning and employability.

TELEFÔNICA BRASIL – Investor Relations
Christian Gebara
David Melcon
João Pedro Carneiro
Gabriel Menezes
+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:https://www.prnewswire.com/news-releases/3q21-results-telefonica-brasil-sa-301410425.html

SOURCE Telefônica Brasil S.A.

FAQ

What were Telefônica Brasil's net operating revenues for 3Q21?

Telefônica Brasil reported net operating revenues of R$11,033 million for 3Q21.

How much did Telefônica Brasil's net profit grow in 3Q21?

Net profit for Telefônica Brasil grew by 8.5% to R$1,315 million in 3Q21.

What was the increase in mobile service revenue for Telefônica Brasil in 3Q21?

Mobile service revenue increased by 5.7% in 3Q21, marking its highest growth in six years.

What is the recurring EBITDA for Telefônica Brasil in 3Q21?

The recurring EBITDA for Telefônica Brasil in 3Q21 was R$4,414 million, up 2.1% year-on-year.

What was the dividend yield for Telefônica Brasil in 3Q21?

Telefônica Brasil declared a dividend yield of 7.4% based on R$1.9 billion in interest on capital.

How much free cash flow did Telefônica Brasil generate in 3Q21?

The free cash flow after leasing payments for Telefônica Brasil in 3Q21 was R$2,634 million.