(Adds details of earnings, comments from executives)
SAO PAULO May 9 Telefonica Brasil SA
reported a 13 percent rise in recurring net income on Tuesday,
citing rigorous cost controls and accelerating demand for mobile
and data services despite a sluggish economic recovery.
Excluding one-time revenue from tower sales a year earlier,
profit at the Brazilian division of Spain's Telefonica SA
rose in the first quarter to 996 million reais ($313
million), according to a securities filing. Including last
year's tower sales, net income fell 18 percent.
"In tough times we've managed to grow," said Chief Executive
Eduardo Navarro. "As the economy recovers the expectation is
that this trend should gain strength."
Net revenue rose nearly 2 percent to 10.590 billion reais,
lifted by 5 percent mobile services revenue growth, the best in
seven quarters, according to investor relations head Luis
Clients migrating from copper landlines to fiber optic
connections also helped to boost fixed broadband revenue by 11
percent despite just 2 percent growth in the subscriber base.
Operating costs declined 1 percent on a recurring basis,
falling for the fifth straight quarter due to personnel cuts and
administrative expense controls.
Capital spending fell 11 percent from a year earlier to
1.328 billion reais, or just 17 percent of the average annual
target in a three-year investment plan. Navarro said investments
should accelerate in the rest of the year to meet forecasts.
Earnings before interest, taxes, depreciation and
amortization (EBITDA) rose 7 percent on a recurring basis to
3.514 billion reais, or 33.2 percent of net revenue. Including
the effect of last year's tower sales, EBITDA fell 7 percent.
($1 = 3.18 reais)
(Reporting by Brad Haynes; Editing by Dan Grebler and Bill