3Q23 Results: Telefônica Brasil S.A.

Rhea-AI Summary

Telefônica Brasil announces its 3Q23 results, with double-digit net income and free cash flow growth in 9M23. Net operating revenue increased by 7.5% YoY, reaching R$13,112 million. EBITDA grew by 11.7% YoY, with a margin of 42.2%. Net income reached R$1,472 million, a 2.2% increase YoY. Operating cash flow increased by 22.9% YoY, totaling R$2,913 million. Total subscribers remained stable at 111,582 thousand. The company's mobile segment strengthened its leadership with 98 million accesses and a market share of 43.6%.

Positive

• Double-digit net income and free cash flow growth in 9M23.
• Net operating revenue increased by 7.5% YoY.
• EBITDA grew by 11.7% YoY, with a margin of 42.2%.
• Net income reached R$1,472 million, a 2.2% increase YoY.
• Operating cash flow increased by 22.9% YoY, totaling R$2,913 million.
• The company's mobile segment strengthened its leadership with 98 million accesses and a market share of 43.6%.

Negative

• None.

SÃO PAULO, Oct. 31, 2023 /PRNewswire/ -- Telefônica Brasil - (B3: VIVT3; NYSE: VIV), announces its results for 3Q23. 

Double-digit net income and free cash flow growth in 9M23, combined with strong shareholder remuneration

R$ million	3Q23	3Q22	% Y-o-Y	9M23	9M22	% Y-o-Y
Net Operating Revenue	13,112	12,199	7.5	38,565	35,382	9.0
Core Revenue	12,335	11,256	9.6	36,120	32,380	11.6
Mobile Revenue	9,279	8,480	9.4	27,025	24,172	11.8
Fixed core revenue	3,056	2,776	10.1	9,095	8,209	10.8
Non-core Revenue	777	943	(17.6)	2,445	3,002	(18.5)
Total Costs	(7,573)	(7,242)	4.6	(22,999)	(21,335)	7.8
EBITDA	5,539	4,957	11.7	15,566	14,047	10.8
EBITDA / Net Revenue Margin	42.2 %	40.6 %	1.6 p.p.	40.4 %	39.7 %	0.7 p.p.
Net Income	1,472	1,440	2.2	3,429	2,959	15.9
Earnings per Share (EPS)	0.89	0.86	2.9	2.07	1.77	16.6
CAPEX ex-IFRS 16	2,626	2,586	1.5	6,665	7,041	(5.3)
Operating Cash Flow (OCF)	2,913	2,371	22.9	8,901	7,006	27.1
OCF / Net Revenue Margin	22.2 %	19.4 %	2.8 p.p.	23.1 %	19.8 %	3.3 p.p.
Free Cash Flow	1,918	1,839	4.3	7,556	6,473	16.7
Core Revenue / Net Revenue	94.1 %	92.3 %	1.8 p.p.	93.7 %	91.5 %	2.1 p.p.
Non-core Revenue / Net Revenue	5.9 %	7.7 %	(1.8) p.p.	6.3 %	8.5 %	(2.1) p.p.
Total Subscribers (Thousand)	111,582	111,688	(0.1)	111,582	111,688	(0.1)
Core Subscribers	104,701	104,070	0.6	104,701	104,070	0.6
% / total accesses	93.8 %	93.2 %	0.7 p.p.	93.8 %	93.2 %	0.7 p.p.
Non-core Subscribers	6,881	7,618	(9.7)	6,881	7,618	(9.7)
% / total accesses	6.2 %	6.8 %	(0.7) p.p.	6.2 %	6.8 %	(0.7) p.p.

 

Strengthening of leadership in mobile with 98 million accesses. In the postpaid segment (ex-M2M), market share at the end of August/23 was 43.6% (+1.9 p.p. YoY), while churn in 3Q23 remained at historically low levels, at 1.09%. The FTTH network is currently present in 439 cities (+59 cities YoY) with 25.1 million homes passed (+12.9% YoY) and 6.0 million homes connected (+13.5% YoY).

Net revenues continue to grow above inflation (+7.5% YoY) driven by mobile service revenue (+9.0 YoY). Mobile Service Revenue growth was mainly boosted by Postpaid Revenue (+12.7% YoY), which was positively impacted by the customer base increase, annual price adjustments and churn at historic low levels. Fixed revenue maintained its positive performance, increasing +3.1% YoY, driven by FTTH revenues (+15.1% YoY) and Corporate Data, ICT and Other revenues (+14.7% YoY).

EBITDA grew +11.7% YoY, with a margin of 42.2% (+1.6 p.p. YoY), due to strong performance of core revenues (+9.6% YoY) and cost control (+4.6% YoY) in the quarter, as well as the positive net effect of R$175 million in 3Q23, related to the post-closing price adjustment agreement from the acquisition of part of Oi Mobile's assets.

In 9M23, Operating Cash Flow totaled R$8,901 million (+27.1% YoY), with a margin of 23.1% (+3.3 p.p. YoY) over net revenue. Investments totaled R$6,665 million (-5.3% YoY) or 17.3% of revenues (-2.6 p.p. YoY), maintaining the guided Investment level below R$9 billion in 2023.

Net income reached R$3,429 million in 9M23 (+15.9% YoY). Shareholder remuneration declared up to October 2023 hit R$2,870 million, of which R$1,736 million were in interest on capital, R$827 million in dividends and R$308 million in share buybacks. In September 2023, ANATEL approved the request for prior consent to allow the Company to reduce its capital stock in one or more events, subject to the management's assessment, in a total amount of up to R$5 billion.

New sources of revenue (Digital B2B, Financial Services¹, Video + Music OTTs and Electronics) are growing fast and gaining relevance in our top-line mix. Digital B2B Revenues totaled R$3.2 billion in the LTM (+28.2% YoY), with important upside potential. 

TELEFÔNICA BRASIL – Investor Relations
Christian Gebara
David Melcon
João Pedro Soares Carneiro
Gabriel Figueiredo Menezes
ir.br@telefonica.com 

To download the complete version of the Company's earnings release, please visit our website: https://ri.telefonica.com.br/en

CONTACT: David Melcon Sanchez-Friera, CFO and Investor Relations Officer, Telephone: +55 11 3430-3687, Email: ir.br@telefonica.com 

View original content:https://www.prnewswire.com/news-releases/3q23-results-telefonica-brasil-sa-301973418.html

SOURCE Telefônica Brasil S.A.

FAQ

What are the key financial highlights of Telefônica Brasil's 3Q23 results?

Telefônica Brasil's 3Q23 results include double-digit net income and free cash flow growth in 9M23. Net operating revenue increased by 7.5% YoY, reaching R$13,112 million. EBITDA grew by 11.7% YoY, with a margin of 42.2%. Net income reached R$1,472 million, a 2.2% increase YoY. Operating cash flow increased by 22.9% YoY, totaling R$2,913 million.

How did Telefônica Brasil's mobile segment perform in 3Q23?

In 3Q23, Telefônica Brasil's mobile segment strengthened its leadership with 98 million accesses and a market share of 43.6%. Churn remained at historically low levels, at 1.09%.

What was the growth rate of Telefônica Brasil's net operating revenue in 9M23?

Telefônica Brasil's net operating revenue grew by 7.5% YoY in 9M23.

What was the EBITDA margin for Telefônica Brasil in 3Q23?

Telefônica Brasil achieved an EBITDA margin of 42.2% in 3Q23.

How much did Telefônica Brasil's net income increase in 9M23?

Telefônica Brasil's net income increased by 2.2% YoY, reaching R$1,472 million in 9M23.