Brazilian operator Oi, under judicial reorganization, ended the second quarter of 2016 with net revenue of BRL 6.52 billion, down 3.8 percent on the same period in 2015 and 3.4 percent less than in Q1 2016. The company blamed the decline on the poor economic climate, which hurt B2B and prepaid revenues, as well as regulatory price cuts and fewer customers.
The operator had a net loss from continuing operators of BRL 656 million in the quarter, widening from a loss of BRL 442 million a year earlier. EBITDA fell 24.4 percent to BRL 1.43 billion, and capex amounted to BRL 1.21 billion, an increase of 16.7 percent from a year ago.
Net debt totalled BRL 41.4 billion at the end of June, up from BRL 40.84 billion in March due to the last payment for its 3G licence, severance costs and costs for the ongoing judicial reorganisation. Available cash dropped to BRL 5.11 billion from BRL 8.53 billion three months earlier.
Net revenues from the Brazilian operations totalled BRL 6.23 billion, an annual drop of 3.5 percent, and recurring EBITDA in the Brazilian operations stood at BRL 1.44 billion, down 20.5 percent. Operating costs were up 2.9 percent year-on-year, which Oi said is still well below inflation.
Oi had 69.19 million RGUs at the end of Q2, a drop of 5.2 percent from a year ago and 0.4 percent less than in March. Residential RGUs fell by just 17,000 in the three months to 16.15 million, as growth in broadband and pay-TV was offset by losses in fixed telephony. Mobile customers were down by 240,000 compared to March to 45.31 million.
The residential wireline segment recorded the lowest level of net disconnections since 2013, Oi noted. The company said it was reducing churn through offers bundling fixed and mobile services and also recently introduced a TV product that can be paid from prepaid mobile credit. Residential revenues totalled BRL 2.41 billion in Q2, down 2.0 percent year-on-year but a sequential growth of 0.7 percent in the quarter. ARPU grew 4.5 percent year-on-year and 1.6 percent from the previous quarter, to BRL 82.10.
In the mobile market, service revenues fell 3.7 percent to BRL 1.87 billion, mainly due to the cuts in interconnection rates and the decline in pre-paid revenues due to the weaker economic climate. Oi said the prepaid segment started to recover in July, helped by take-up of the Oi Livre bundles with all-net rates. It was also seeing good demand for its new Oi Mais postpaid plans, driving postpaid net adds of 129,000 in the quarter. Data revenues grew 20.3 percent annually to BRL 853 million. Mobile ARPU still fell 4.3 percent year-on-year and by 6.6 percent from the previous quarter to BRL 15.6.
