Brasil Telecom posts lower 3rd-qtr net profit
Brazilian telephone company Brasil Telecom Participacoes on Wednesday reported its quarterly profit slipped 21 percent as revenue growth from phone rate hikes and growing data transmissions was undercut by higher costs.
The company, which has fixed-line and a nascent mobile phone operation, made a net profit of 116.2 million reais ($41 million) in the third quarter, down from 147.6 million reais a year before, including a premium from its CRT unit.
The result was below market expectations of about 148 million reais, according to an average of five analysts' forecasts collected by Reuters.
The company's earnings were boosted by a telephone rate rise of about 7 percent in the middle of the year and an additional smaller hike in September. The bottom line was also boosted by higher revenues from public telephone services, long-distance calls and data transmissions.
Net revenue totaled 2.4 billion reais, a 15 percent improvement from a year before, while earnings before interest, taxes, depreciation, and amortization, or EBITDA, rose 2.6 percent to 984 million reais.
But higher interconnection costs fueled by a rise in calls between different telecommunications networks helped weigh on the bottom line, Brasil Telecom said.
The company also booked a 65.8 million reais provision -- up 236 percent from a year earlier -- for labor and work issues, and saw its depreciation expenses increase 18.2 percent.
Analysts had expected an increase in depreciation costs to weigh on Brasil Telecom's earnings after it changed the way it accounts for the depreciation of some equipment earlier this year.
The company's shares ended 4.49 percent higher at 18.60 reais on Wednesday, before the results were released. ($1 = 2.829 reais).
(From Reuters, November 04, 2004)
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