3rd Quarter 2002 Earnings Release
1
Contacts
Paulo Roberto Cruz Cozza
Chief Financial Officer and Director of Investor Relations
...
Highlights
...
Costs
under
The cost of services, amounting to R$ 81.1 million, remained practically in line with
control ...
Bad debt expenses for 3rd quarter/2002 amounted to R$ 5.4 million, compared to
R$ 8.4 million in the pre...
Net Profit
3Q02 3Q01 2Q02 YTD Sep/02 YTD Sep/01
...
Material Facts
Ownership Restructuring of the Companies controlled by
Tele Celular Sul
The Board of Directors of Telepar...
Highlights
YTD Y...
TELE CELULAR SUL PARTICIPAÇÕES S.A.
Balance Sheet as of September 30,2002 and June 30,2002
...
TELE CELULAR SUL PARTICIPAÇÕES S.A.
Balance Sheet as of September 30,2002 and June 30,2002
...
Income Statement
Years ended September 30
...
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Press Release 3 Q02 Tele Celular Sul En

Published on: Mar 4, 2016
Source: www.slideshare.net


Transcripts - Press Release 3 Q02 Tele Celular Sul En

  • 1. 3rd Quarter 2002 Earnings Release 1
  • 2. Contacts Paulo Roberto Cruz Cozza Chief Financial Officer and Director of Investor Relations Joana Dark Fonseca Serafim Investor Relations (55-41) 312-6862 jserafim@timsul.com.br Rafael J. Caron Bósio Investor Relations (55-41) 9976-0668 rbosio@timsul.com.br Website http://tsu.infoinvest.com.br/ TELE CELULAR SUL PARTICIPAÇÕES S.A. ANNOUNCES ITS CONSOLIDATED RESULTS FOR THE THIRD QUARTER 2002 Curitiba, November 4, 2002 – Tele Celular Sul Participações S.A. (BOVESPA: TCLS3 and TCLS4; NYSE: TSU), the Holding Company of Telepar Celular S.A., Telesc Celular S.A. and CTMR Celular S.A., leading providers of cellular telecommunication services in Southern Brazil, announces its results for the 3rd quarter 2002. Quarter Highlights ü Focus on profitability, resulting in an EBITDA of R$ 93.0 million for the quarter and R$270 million year to date, and a 49% Margin over the net service revenue for both periods. ü R$ 18.4 million net income for the 3rd quarter/2002 and R$ 48.4 million year to date. ü Continued control of costs and operating expenses. ü Low indebtedness level and strong cash generation. ü Promotional campaigns geared to stimulating consumption. ü Telecom Italia Mobile – TIM, the holding company of Tele Celular Sul, is launching its PCS operations nationwide, initially providing the service in 94 cities. TIM’s competitive strengths include the advantages of scale and GSM technology, used by 71% of mobile phone users in the world. With its presence in Brazil, TIM has consolidated its position in mobile telecommunication services in South America, where it is already present in Chile (Entel PCS), Peru (TIM Peru), Venezuela (Digitel), Bolivia (Entel Móvil) and Argentina (Telecom Personal). In 1998, through its Chilean subsidiary, TIM launched the first GSM-based mobile telecommunication network in South America. In a short while, Entel PCS became the leading mobile telecommunications provider in the country. 2
  • 3. Highlights In R$ thousand 3Q02 3Q01 % 2Q02 YTD Sep/02 YTD % YTD 3Q02/3Q01 Sep/01 Gross Handset Revenue 45,136 34,816 29.6% 37,719 103,883 57,653 80.2% Gross Service Revenue 243,617 216,851 12.3% 227,846 723,016 704,992 2.6% Total Gross Revenue 288,753 251,667 14.7% 265,565 826,899 762,645 8.4% Total Net Revenue 226,550 196,235 15.4% 205,019 639,343 564,097 13.3% EBITDA 93,033 84,435 10.2% 84,079 270,786 241,649 12.1% EBITDA Margin 41.1% 43.0% -4.4% 41.0% 42.3% 42.8% -1.2% EBITDA Margin (w/o 49.0% 48.7% 0.6% 48.2% 48.8% 46.2% 5.6% handset sales) Net Income 18,437 10,878 69.5% 12,832 48,431 43,038 12.5% Net Income per 1,000 0.05 0.03 66.7% 0.04 0.14 0.13 7.7% shares – R$ Profit per ADR (10,000 0.50 0.30 66.7% 0.40 1.40 1.30 7.7% shares) – R$ Free Cash Flow 101,241 39,156 158.6% 76,837 277,394 79,062 250.9% Operating Revenue Total Net Revenue for the quarter was R$ 288.7 million, 15% and 9% above the 3rd quarter/2001 and 2nd quarter/2002, respectively. Total Gross Revenue Total Gross Revenue 3Q02 - R$ 288.7 million 3Q01 - R$ 251.7 million Increase in VAS revenues 3.8 238.4 214.1 1.8 45.1 34.8 1.4 1.0 Usage VAS Usage VAS Handset Sales Others Handset Sales Others Traffic grew by 11% over the 3rd quarter 2001, while the VAS (Value Added Services) doubled. As a result, the Average Net Revenue per User (ARPU) was R$ 38, actually improving slightly compared to last quarter and last year, going against the industry trend of declining ARPU over the past several quarters. Costs In R$ thousand YTD YTD 3Q02 3Q01 2Q02 Sep/02 Sep/01 Cost of Services 81,057 70,737 79,487 239,139 214,053 Cost of Goods 44,347 31,233 31,703 93,553 66,816 Total Cost of Goods and Services 125,404 101,970 111,190 332,692 280,869 3
  • 4. Costs under The cost of services, amounting to R$ 81.1 million, remained practically in line with control the preceding quarter figures. The main cost items include Depreciation and Interconnection/Leased line costs, amounting to R$ 74.4 million, i.e. 92% of the Cost of Services for the quarter. R$ Million 41.3 41.1 37.9 31.3 33.1 28.2 3Q01 2Q02 3Q02 Depreciation Interconnection The costs related to the sale of handsets were R$ 44.3 million. The increase over the preceding quarters stems from the greater sales volume in that period, resulting from the attractive sales campaigns carried out in the quarter, such as the fathers’ day promotion in which new handsets were launched giving a package of free messages (SMS). Net Operating Expenses 2 YTD YTD 3Q02 3Q01 2Q02 Sep/02 Sep/01 1 Selling Expenses 42,005 45,268 44,178 136,574 132,016 General and Administrative Expenses – G&A 19,568 15,127 18,731 55,644 48,393 Other Net Operating Expenses 3,554 810 3,446 12,704 7,515 Sub- Total 65,127 61,050 66,355 204,922 187,924 Net Financial Expenses 1,179 18,703 5,638 14,904 35,686 Net Operating Expenses 66,306 79,753 71,993 219,826 223,610 Note: (1) Including bad debt expenses. (2) Reclassification of Selling and G&A Expenses, not affecting the total amount. 8% decrease in net Operating expenses for the quarter were down 8% and 17% quarter-over-quarter operating and year-over-year, respectively. expenses Q-o-Q 4
  • 5. Bad debt expenses for 3rd quarter/2002 amounted to R$ 5.4 million, compared to R$ 8.4 million in the preceding quarter, thanks to a higher rate of collection of overdue bills in that period. 15 5% 3.3% 4% 2.3% bad debt 10 2.6% over the total 3% 2.3% gross revenue 5 2% 6.5 8.4 5.4 1% 0 0% 3Q01 2Q02 3Q02 R$ million % Over Total Gross Revenue Handset prices Subscriber Acquisition Cost (SAC) for the 3rd quarter/2002 was R$ 91, affected by the representing a 12% increase over the preceding quarter, mainly derived from the exchange rate increment in handset prices. However, it was 50% below the SAC for the 3rd quarter/2001. 200 172 181 110 100 81 91 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 EBITDA The EBITDA reached R$ 93.0 million, representing a 49% EBITDA margin over the net services revenue. The strong EBITDA margin in 2002 has been largely a result of improved cost control. 49% 49% 48% 120 45% 44% 49% 50% 42% 49 % EBITDA 41% 41% margin over the 100 45% 35% 45% 40% 41% 43% Revenue from 80 30% Services 60 76.4 80.8 84.4 79.0 93.7 84.1 93.0 20% 40 20 10% 0 0% 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 EBITDA EBITDA Margin (%) Over Total Net Revenue EBITDA Margin (%) Over Serv ice Revenues 5
  • 6. Net Profit 3Q02 3Q01 2Q02 YTD Sep/02 YTD Sep/01 Net Profit –R$ thousand 18,437 10,878 12,832 48,431 43,038 Net Profit per 1,000 shares – R$ 0.05 0.03 0.04 0.14 0.13 Net profit was R$ 18.4 million, 69% and 44% above the results for the 3rd quarter/2001 and 2nd quarter/2002, respectively, because of improved cost control and higher revenues. Investment R$ 8.2 million were invested this quarter through the controlled companies, basically in the maintenance of the mobile telecommunications network and in information technology. Positive Cash Flow Free Cash Flow Cash flow for the quarter was R$ 101.2 million, and R$ 277.4 million for the first nine months of 2002. Indebtedness By the end of the quarter the Company’s debt amounted to R$325.9 million, while cash and equivalents totaled R$ 371.0 million. Of the total debt, R$ 40.9 million represent loans in dollars, fully covered by hedge operations. Net financial expenses for the quarter amounted to R$ 1.2 million, 94% and 79% below the 3rd quarter/01 and 2nd quarter/2002, respectively. The sharply reduced financial expenses derive from a significantly more favorable Cash and mix of interest-bearing debt and interest-earning assets. The total debt is indexed to Debt indexed to the CDI the CDI, due to the contracts or the hedge operations to cover them from the exchange risks. At the same time, the cash and equivalents have been invested on instruments also indexed by the CDI. Market The Company posted 136,000 gross additions in the quarter (82% of which are prepaid customers), versus 75,000 in the 3rd quarter/2001. The additions in the period were for an acquisition cost per subscriber 49% below the cost in the preceding year. At the end of the quarter, the Company had 1,660,164 customers, representing a market share estimated at 62%. The population coverage is 79.3% and the estimated total penetration rate in the concession area is 17%. 6
  • 7. Material Facts Ownership Restructuring of the Companies controlled by Tele Celular Sul The Board of Directors of Telepar Celular S.A. (“Telepar”), Telesc Celular S.A. (“Telesc”) and CTMR Celular S.A. (“CTMR”), companies controlled by Tele Celular Sul, passed the proposed ownership restructuring by means of the swap of Telesc and CTMR by Telepar shares, implying the transfer to the stock of Telepar, by increasing its capital stock, of the shares of Telesc and CTMR stock, those two companies becoming wholly-owned subsidiaries of Telepar. The new Telepar shares issued in the capital increase will be given to Telesc and CTMR shareholders. The ownership restructuring of the Companies by Share Swap stems from the Companies' intention to integrate their operational activities, enabling them to tap the synergies already existing in their businesses, with the ensuing cost reduction, as well as the concentration of the liquidity of the shares of the operators in a single listed company, benefiting all shareholders. The proposal will be submitted to the approval of the Stockholders' Meetings to be held on November 19 and 20, 2002. The details of the operation are available at http://tsu.infoinvest.com.br . ______________________________________________________________ “This release contains forecasts and/or forward-looking statements. Those expectations are based on a number of assumptions. Those expectations are subject to the risks and uncertainties inherent to projections and/ forward-looking statements. The results may differ materially from the expectations expressed in the forecasts and/or forward-looking statements if one or more of those assumptions and expectations prove to be imprecise or unrealized.” 7
  • 8. Highlights YTD YTD 3Q02 3Q01 2Q02 Sep/02 Sep/01 Total Subscribers 1,660,164 1,534,566 1,635,278 1,660,164 1,534,566 Postpaid 499,536 625,022 535,470 499,536 625,022 Prepaid 1,160,628 909,544 1,099,808 1,160,628 909,544 Estimated population in the region (million) 15.0 14.8 15.0 15.0 14.8 Municipalities Served 235 220 232 235 220 Estimated Total Penetration 17% 15% 17% 17% 15% Company Penetration 11% 10% 11% 11% 10% Market share (estimated) 62% 68% 64% 62% 68% Digitalization rate - Plant 100% 100% 100% 100% 100% Digitalization rate - Customer 95% 91% 94% 95% 91% 1 TOTAL ARPU R$38 R$37 R$36 R$38 R$39 TOTAL MOU 99 104 93 99 114 SAC R$91 R$181 R$81 R$90 R$185 Investment (million) R$8 R$35 R$8 R$22 R$102 Net Additions 24,886 26,495 21,022 56,251 118,082 2 7% 3% 6% 17% 14% Churn Dealers (with own shops) 844 825 890 844 825 Employees 1,055 1,243 1,100 1,055 1,186 Note: (1) Average Net Revenue per Customer. (2) Calculated on the average customer base. EBITDA Calculation YTD YTD 3Q02 3Q01 2Q02 Sep/02 Sep/01 Net Services Revenue 189,798 173,369 174,461 555,318 522,395 Net Handset Revenue 36,752 22,866 30,558 84,025 41,702 Total Net Revenue 226,550 196,235 205,019 639,343 564,097 1 Operating profit 34,840 14,357 21,836 86,825 59,618 Depreciation 49,376 44,630 50,714 148,784 126,128 Amortization of the premium 7,638 6,745 5,891 20,273 20,217 Financial income (73,071) (15,460) (28,210) (114,977) (39,540) Financial expenses 74,250 34,163 33,848 129,881 75,226 EBITDA 93,033 84,435 84,079 270,786 241,649 EBITDA Margin (%) 41.1% 43.0% 41.0% 42.3% 42.8% EBITDA Margin (%) - 49.0% 48.7% 48.2% 48.8% 46.2% Over Service Revenues Note: (1) including TIMnet equity as of the 4Q01. 8
  • 9. TELE CELULAR SUL PARTICIPAÇÕES S.A. Balance Sheet as of September 30,2002 and June 30,2002 In thousands of reais (Translation of the original Portuguese) Parent Company Consolidated Assets Sep/2002 Jun/2002 Sep/2002 Jun/2002 Current assets Banks 2,681 1,672 10,227 5,828 Marketable securities 9,945 7,311 360,784 270,345 Receivables from customers 138,896 131,719 Inventories 9,452 8,684 Recoverable taxes 617 572 12,535 14,605 Deferred taxes 1,482 1,278 20,659 20,840 Other 1,648 1,025 10,368 14,708 16,373 11,858 562,921 466,729 Long-term assets Subsidiaries 195 3,727 Marketable securities 7,350 5,809 Recoverable taxes 6,576 5,982 Deferred taxes 844 815 217,157 224,665 Judicial deposits 11,066 10,998 Other 9 14 990 1,272 1,048 4,556 243,139 248,726 Permanent assets Investments 855,953 836,982 24,188 26,553 Property, plant and equipment 84 88 657,917 696,207 Deferred charges 56,833 62,149 856,037 837,070 738,938 784,909 Total 873,458 853,484 1,544,998 1,500,364 9
  • 10. TELE CELULAR SUL PARTICIPAÇÕES S.A. Balance Sheet as of September 30,2002 and June 30,2002 In thousands of reais (Translation of the original in Portuguese) Parent Company Consolidated Sep/2002 Jun/2002 Sep/2002 Jun/2002 Liabilities and stockholders' equity Current liabilities Suppliers 3,983 4,117 64,999 56,889 Debt - current portion 31,097 28,579 Debentures - current portion 218,083 8,601 Salaries, social charges and benefits 11,677 10,120 13,878 12,089 Taxes, charges and contributions 29 99 34,418 26,864 Interest on shareholders' equity payable 1,259 1,257 2,488 2,515 Dividends payable 516 532 726 747 Other 847 753 7,215 5,441 18,311 16,878 372,904 141,725 Long-term liabilities Debt 76,706 90,116 Debentures 200,000 Indirect taxes 69,912 67,486 Provision for pension plan 2,399 2,345 2,399 2,345 Provision for contingencies 137 87 9,262 7,916 2,536 2,432 158,279 367,863 Minority interest 161,204 156,602 Shareholders' equity Paid-up capital 324,666 324,666 324,666 324,666 Capital reserves 173,913 173,913 173,913 173,913 Revenue reserves 305,601 305,601 305,601 305,601 Retained earnings/accumulated deficit 48,431 29,994 48,431 29,994 852,611 834,174 852,611 834,174 Total 873,458 853,484 1,544,998 1,500,364 10
  • 11. Income Statement Years ended September 30 In thousands of reais (Translation of the original in Portuguese) Parent Company Consolidated 3Q02 3Q01 3Q02 3Q01 Gross Revenue from goods sold and services rendered 288,753 251,667 Deductions to gross revenue (62,203) (55,432) Net Revenue from goods sold and services rendered 226,550 196,235 Cost of goods sold and services rendered (125,404) (101,970) Gross profit 101,146 94,265 Operating expenses/income Selling (42,005) (45,268) General and administrative (953) (625) (19,568) (15,127) Equity interest in income of subsidiary and associated companies 19,438 11,224 (1,898) Other operating income (expense), net (238) 167 (3,554) (810) 18,247 10,766 (67,025) (61,205) Operating profit before financial results 18,247 10,766 34,121 33,060 Financial net Financial income 1,153 1,192 73,071 15,460 Financial expenses (166) (583) (74,250) (34,163) 987 609 (1,179) (18,703) Operating profit (loss) 19,234 11,375 32,942 14,357 Non-operating results 20 (2) Income before taxes and participation 19,234 11,375 32,962 14,355 Provision for income tax and social contribution 233 (1) (8,666) (1,003) Profit Sharing (1,030) (496) (1,258) (656) Minority interest (4,601) (1,818) Net income for the period 18,437 10,878 18,437 10,878 Net income per thousands shares (R$) 0.05 0.03 11

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