February 20, 2019 / 2:23 PM / 9 months ago

Telefonica Brasil Q4 net profit drops 2 percent as expected

SÃO PAULO, Feb 20 (Reuters) - Telefonica Brasil SA on Wednesday reported that net profit in the fourth quarter fell 2 percent from a year earlier to 1.5 billion reais ($404.55 million), pressured by asset depreciation and stagnant revenues, roughly in line with expectations.

In a securities filing, Brazil’s largest wireless carrier said earnings before interest, taxes, depreciation and amortization (EBITDA) rose 7.4 percent to 4.046 billion reais, which was slightly below the average estimate of 4.078 billion reais compiled by Refinitiv.

Quarterly revenue rose 0.5 percent to 11.08 billion reais ($2.99 billion), while operational expenses declined 3.1 percent to 7.039 billion reais ($1.90 billion).

Chief Executive Officer Christian Gebara said the company controlled by Spain’s Telefonica sees room to boost revenues and improve margins this year, as efforts to automate customer service bring cost efficiency and more clients migrate to technologies like high speed cellular Internet access.

“We see a great potential to increase revenues...In wireless, (the performance) of post-paid lines is solid and 4G penetration is growing”, Gebara told journalists in a phone interview on the fourth-quarter results.

In a report, analysts at Credit Suisse considered the results slightly negative and maintained a cautious view on growth in mobile market due to fierce competition. “We note the quality of results came in slightly weaker than expected”, they wrote.

Telefonica Brasil shares rose 1.2 percent in early trading, accumulating gains of almost 7 percent so far this year.

$1 = 3.7078 reais Reporting by Gabriela Mello; Editing by David Gregorio

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