3Q22 Results: Telefônica Brasil S.A.

Rhea-AI Summary

Telefônica Brasil (NYSE: VIV) reported solid financial results for 3Q22, with Net Operating Revenues reaching R$12,199 million, up 10.6% year-over-year. Mobile Service Revenue grew 13.8%, alongside a significant 25.9% rise in Handset Revenue. Despite disconnecting 3 million inactive mobile accesses, Postpaid and Prepaid Revenues saw growth of 12.0% and 21.5%, respectively. Recurring EBITDA increased by 12.3% to R$4,957 million, with a margin of 40.6%. The company also initiated a share buyback program amounting to R$144 million and reported a 9.2% dividend yield.

Positive

• Net Operating Revenues increased 10.6% YoY to R$12,199 million.
• Mobile Service Revenue grew by 13.8%, driven by expanding customer base.
• Handset Revenue surged 25.9% YoY due to increased demand for 5G smartphones.
• Postpaid Revenue rose 12.0% and Prepaid Revenue increased 21.5% YoY.
• Recurring EBITDA reached R$4,957 million, a 12.3% YoY increase with a 40.6% margin.
• Announced a share buyback program of R$144 million.
• Dividend payout of 113% with a 9.2% dividend yield.

Negative

• Disconnected 3 million inactive mobile accesses, potentially affecting future revenue.
• Costs of Products Sold increased by 39.7% YoY, impacting profitability.

SÃO PAULO, Oct. 26, 2022 /PRNewswire/ -- Telefônica Brasil - (B3: VIVT3; NYSE: VIV), announces its results for 3Q22. 

Solid performances on revenues lead to better margins and higher Net Income

R$ million	3Q22	3Q21	% y-o-y	9M22	9M21	% y-o-y
Net Operating Revenues	12,199	11,033	10.6	35,382	32,532	8.8
Core Revenue	11,256	9,888	13.8	32,380	28,904	12.0
Mobile Revenue	8,480	7,391	14.7	24,172	21,529	12.3
Fixed Core Revenue	2,776	2,496	11.2	8,209	7,375	11.3
Non-Core Revenue	943	1,145	(17.7)	3,002	3,628	(17.3)
Recurring Total Costs	(7,242)	(6,620)	9.4	(21,335)	(19,437)	9.8
Reported Total Costs	(7,242)	(6,203)	16.7	(21,335)	(18,457)	15.6
Recurring EBITDA	4,957	4,414	12.3	14,047	13,095	7.3
Recurring EBITDA Margin	40.6 %	40.0 %	0.6 p.p.	39.7 %	40.3 %	(0.6) p.p.
Reported EBITDA	4,957	4,830	2.6	14,047	14,075	(0.2)
Reported EBITDA Margin %	40.6 %	43.8 %	(3.1) p.p.	39.7 %	43.3 %	(3.6) p.p.
Net Income	1,436	1,315	9.3	2,932	3,602	(18.6)
Capex | Ex- IFRS 16	2,586	2,151	20.2	7,041	6,346	11.0
Operating Cash Flow (OpCF)	2,371	2,262	4.8	7,006	6,749	3.8
OpCF/Net Revenue Margin	19.4 %	20.5 %	0.1	19.8 %	20.7 %	(4.6)
Free Cash Flow after Lease Payments	1,839	2,634	(30.2)	6,473	6,701	(3.4)
Total Subscribers (thousand)	111,688	97,424	14.6	111,688	97,424	14.6
Core Subscribers	104,070	88,601	17.5	104,070	88,601	17.5
Non-Core Subscribers	7,618	8,823	(13.7)	7,618	8,823	(13.7)

 

Net Operating Revenue grew 10.6% YoY led by Mobile Service Revenue which increased 13.8% on a yearly comparison, and by Handset Revenue, which in its turn, grew a robust +25.9% YoY due to higher demand for 5G compatible smartphones. Net Revenues in the period were not impacted by the time difference between the disclosure of the new ICMS rates and the reduction of prices on invoices.

Despite Vivo disconnecting 3 million mobile accesses, considered inactive by Vivo's criteria regarding the acquisition of Oi Mobile, Postpaid Revenue and Prepaid Revenue grew, on an annual comparison, +12.0% and +21.5% respectively. These increases were driven by the expansion of the customer base and annual price adjustments in postpaid.

Net Fixed Revenue rose +2.1% YoY due to a higher representativeness of Core Fixed Revenue, which is corresponding to 74.6% (+6.1 p.p.) of Net Fixed Revenue. FTTH Revenue grew +20.1% YoY as our FTTH network reached 71 new cities YoY, now present in 380 Brazilian cities, with 22.3 million homes passed and 5.3 million homes connected.

When not considering Depreciation and Amortization, Recurring Total Costs expanded +9.4% YoY, as Cost of Services reached 1.4 billion with higher revenues from the sale of licenses and services to companies, and with Costs of Products Sold growing +39.7% YoY, given a solid performance in the sale of handsets, accessories and IT equipment.

Recurring EBITDA totaled R$4,957 million (+12.3% YoY) in 3Q22, with a Recurring EBITDA margin of 40.6%.

In 3Q22, we bought back R$ 144 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 an 9.2% dividend yield, considering the share buyback program.

Net Income totaled R$1,436 million in 3Q22, rising +9.3% YoY, due to higher revenues and the improvement in the financial result.

TELEFÔNICA BRASIL – Investor Relations  
Christian Gebara  
David Melcon  
João Pedro Carneiro  
Gabriel Figueiredo Menezes  
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/3q22-results-telefonica-brasil-sa-301659917.html

SOURCE Telefônica Brasil S.A.

FAQ

What were Telefônica Brasil's earnings in 3Q22?

Telefônica Brasil reported Net Operating Revenues of R$12,199 million for 3Q22.

How much did Mobile Service Revenue increase in 3Q22?

Mobile Service Revenue grew by 13.8% year-over-year in 3Q22.

What is the share buyback amount announced by Telefônica Brasil?

The company announced a share buyback program amounting to R$144 million.

What was the recurring EBITDA margin for Telefônica Brasil in 3Q22?

The recurring EBITDA margin for 3Q22 was 40.6%.

Did Telefônica Brasil experience any subscriber loss in 3Q22?

Yes, Telefônica Brasil disconnected 3 million inactive mobile accesses in 3Q22.