FOURTH QUARTER
AND FULL-YEAR 2002 RESULTS
Resultados do 3º Trimestre/2002
1
Contacts
Paulo Roberto Cruz Cozza
Chief Financial Officer and Director of Investor Relations
...
Management Comments
“Tele Celular Sul – TIM Sul’s strategy was fully and successfully
...
In 2002, traffic revenues (usage) remained essentially unchanged relative to
the previous year. ARPU (A...
General and administrative expenses reached R$ 61.7 million in 2002, an
increase of 7.9% relative to 2001....
EBITDA
2002: 47.1% At the end of 2002, EBITDA reached R$ 352.4 million, or were 10.0% higher
Ebitda than ...
Indebtedness
On December 31, 2002, the Company’s debt was R$ 321.1 million, with a
R$ 440.5 million cash position, r...
Anatel authorizes the adjustment of tariffs
Anatel authorized the operators controlled by Tele Celular Sul to adjust...
Highlights
4Q02 4Q01 3Q02 2002 2001
To...
TELE CELULAR SUL PARTICIPAÇÕES S.A.
Balance Sheets
De...
TELE CELULAR SUL PARTICIPAÇÕES S.A.
Balance Sheets
...
Statements of Income
December 31, 2002 and 2001
...
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Press Release 4 Q02 Tele Celular Sul En

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


Transcripts - Press Release 4 Q02 Tele Celular Sul En

  • 1. FOURTH QUARTER AND FULL-YEAR 2002 RESULTS Resultados do 3º Trimestre/2002 1
  • 2. Contacts Paulo Roberto Cruz Cozza Chief Financial Officer and Director of Investor Relations Joana Dark Fonseca Serafim Investor Relations (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 FOURTH QUARTER AND FULL-YEAR 2002 CONSOLIDATED RESULTS Curitiba, February, 2003 – 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., the leading providers of cellular telecommunication services in Southern Brazil, announced its results for the 4th quarter and full-year of 2002. Highlights ü Focus on profitability, resulting in EBITDA of R$ 81.6 million in the 4Q02 and R$ 352.4 million in 2002, with EBITDA margins of 42.1% and 47.1% over net services revenues, respectively, for these two periods. ü Net income of R$ 17.3 million for the 4Q02 and of R$ 65.8 million for the full year of 2002. ü Stricter cost controls. ü Low level of indebtedness and strong cash flow generation. ü Promotional campaigns focused on stimulating traffic. ü Increase in Value Added Services (VAS). .. 2
  • 3. Management Comments “Tele Celular Sul – TIM Sul’s strategy was fully and successfully implemented. We maintained our focus on innovative services and client satisfaction, on the segmentation of our customer base and on maintaining cost controls (especially regarding the acquisition of new users), safeguarding the Company’s economic and financial health and fostering high cash generation”. Alvaro P. de Moraes Filho President Highlights In R$ thousands 4Q02 4Q01 % 3Q02 Acrrued Acrrued 4Q02/4Q01 2002 2001 Gross Handset Sales Revenues 70,996 58,373 21.6% 45,136 174,879 116,026 Gross Services Revenues 248,053 235,328 5.4% 243,617 971,069 940,320 Total Gross Revenues 319,049 293,701 8.6% 288,753 1,145,948 1,056,346 Total Net Revenues 251,921 227,332 10.8% 226,550 891,264 791,429 EBITDA 81,630 78,962 3.4% 93,033 352,416 320,611 EBITDA Margin 32.4% 34.7% -6.7% 41.1% 39.5% 40.5% EBITDA Margin (ex. Net Serv. Revs.) 42.1% 44.4% -5.2% 49.0% 47.1% 45.8% Net Profit 17,343 16,851 2.9% 18,437 65,774 59,889 Net Profit per 1,000 shares - R$ 0.05 0.05 1.2% 0.04 0.19 0.17 Profit per ADR (10,000 shares) - R$ 0.51 0.50 1.2% 0.40 1.90 1.70 Free Cash Flow 67,848 26,090 160.1% 101,241 345,242 105,152 Operating Revenue Gross revenue for 2002 reached R$ 1,145.9 million, vs. R$ 1,056.3 million in Increase in 2001, an increase of 8.5%. In 4Q02, gross revenue reached R$ 319.0 million, revenues from an 8.6% increase over 4Q01. The expansion that took place in both these handset sales periods is related to the increase in the customer base and to the sale of handsets, which the Company started selling directly to the dealers in August 2001. Total Gross Operating Revenue – 2002 Total Gross Operating Revenue - 2001 R$ 1,145.9 million R$ 1,056.3 million 15.1 932.1 948.6 5.8 174.8 116.0 7.4 2.4 Usage VAS Usage VAS Handset Sales Others Handset Sales Others 4
  • 4. In 2002, traffic revenues (usage) remained essentially unchanged relative to the previous year. ARPU (Average Net Revenue per User) was R$ 38 for the year and 4Q02 and R$ 39 for 2001. Expansion of VAS revenues VAS (Value Added Service) revenues amounted to R$15.1 million, tripling vs. the previous year. In 2002, Other Revenues, which mainly included the fees for services such blocked calls, plan changes , etc, represented R$ 7.4 million. Costs In R$ thousands 4Q02 4Q01 % 3Q02 Accrued Accrued. % 4Q02/4Q01 2002 2001 Accrued Cost of Services 1 44,300 40,915 8.3% 39,713 160,824 143,989 11,7% Cost of Handset Sales 67,644 45,107 50.0% 44,347 161,197 111,923 44,0% Total Costs 111,944 86,022 30.1% 84,060 322,021 255,912 25,8% Note.: (1) Does not include depreciation In 2002, the cost of services totaled R$ 160.8 million, a 11.7% increase vs. the previous year. For 4Q02, the costs reached R$ 44.3 million, 8.3% higher than in 4Q01. This increase in costs was primarily due to growth in client base, with a consequent increase in the cost of interconnection, resulting from the greater use of other operators’ networks by the Company’s clients. Additionally, during the year, interconnection tariffs were adjusted. The cost of handset sales amounted to R$161.1 million, vs. R$ 111.9 million in 2001. For 4Q02, cost of handset sales reached R$ 67.6 million, an increase of 50% vs. 4Q01, which is mostly due to the Company selling handsets directly to the dealers in 2002, an activity that had previously been outsourced. General Administrative and Commercial Expenses 4Q02 4Q01 % 3Q02 Accrued Accrued % 4Q02/4Q01 2002 2001 Accrued Sales Expenses 1 and 2 38,116 43,574 -12.5% 33,136 140,883 155,061 -9.1% General & Administratve Expenses-G&A 2 and 3 18,889 20,603 -8.3% 14,498 61,532 57,016 7.9% Sub-Total 57,005 64,177 -11.2% 47,634 202,415 212,077 -4.6% Note: (1) does not include bad debt expenses; (2) does not include depreciation and amortization; and (3) Adjusted in the quarters to include “employees bonus performance premium”, previously recorded as nonoperationing expenses. Commercial expenses for the year totaled R$ 140.9 million, decreasing by 9.1% relative to 2001. 4Q02 commercial expenses were 12.5% lower than the 4Q01 figures; however, they were 15.0% higher than 3Q02 expenses, given year-end promotions, when product and service sales seasonally peak. 5
  • 5. General and administrative expenses reached R$ 61.7 million in 2002, an increase of 7.9% relative to 2001. The increases are connected with information technology expenses. In 4Q02, these expenses amounted to R$ 18.9 million, 8.3% bellow 4Q01. During the course of 2002, bad debt expenses reached R$ 30.7 million, accounting for 2.7% of total gross revenues, vs. 1.7% in 2001. These amounts are in line with domestic industry standards. It should be noted that, in 2001, the Company improved its collection procedures, which resulted in a substantial recovery of bad debt that had fallen due in previous periods. Another factor to be taken into account is the increase in the provision for handset sales, needed because the Company started selling them directly to dealers. Bad Debt (R$ Million) 2.9 9.9 8.4 5.4 7.1 4Q01 1Q02 2Q02 3Q02 4Q02 4Q02 SAC (Subscribers Acquisition Costs) was R$ 108, 2.0% less than in the SAC continues same period of the previous year, and well below average 2001 SAC (which to be under reached R$ 161) in spite of a substantial decline in the local currency. control Relative to the previous quarter, SAC increased by 18.9%, due to specific year-end promotions when opportunities to increase sales are greater. Subscriber Acquisition Cost 11 10 8 9 10 4Q0 1Q0 2Q0 3Q0 4Q0 In 2002, Depreciation and Amortization expenses, including the amortization of the privatization premium, reached R$ 227.0 million, 13.5% higher than in the preceding year, taking into account investments made in recent periods. 6
  • 6. EBITDA 2002: 47.1% At the end of 2002, EBITDA reached R$ 352.4 million, or were 10.0% higher Ebitda than in 2001. EBITDA margin was 47.1% of net services revenues. Margin over Service Revenues In 4Q02, EBITDA reached R$ 81.6 million, whereas EBITDA margin was 42.1% of net services revenues. EBITDA and EBITDA Margin 49% 49% 48% 49% 50% 120 45% 44% 42% 43% 45% 41% 42% 41% 45% 40% 41% 32% 90 35% 30% 60 20% 30 76.4 80.8 84.4 79.0 93.7 84.1 93.0 81.6 10% 0 0% 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 R$ million EBITDA (%) over Total Net Revenue EBITDA (%) over Net Services Revenues Net Profit Profit Increase 4Q02 4Q01 3Q02 Accrued Accrued in 2002 2002 2001 Net Profit 17,343 16,851 18,437 65,774 59,889 Net Profit per 1,000 shares – R$ 0.051 0.050 0.040 0.190 0.170 In 2002, net profit totaled R$ 65.8 million, 9.8% higher than in 2001. In the 4Q02 net profit totaled R$ 17.3 million, 2.9% higher than the 4Q01. Investments In 2002, total investments through subsidiariesreached R$ 68.7 million, of which R$ 46.9 million corresponded to investments during the 4Q02. The funds were primarily used for expanding coverage and enhancing information technology. Free Cash Flow Positive cash Free cash flow for 2002 was R$345.2 million, 228% higher than 2001, when it flow reached R$ 105.2 million. 7
  • 7. Indebtedness On December 31, 2002, the Company’s debt was R$ 321.1 million, with a R$ 440.5 million cash position, resulting in a positive net debt balance of R$ 119.4 million, one of the lowest levels of indebtedness in the mobile telecommunications industry in Brazil. The debt is basically composed of financing by the Eximbank (Export-Import Bank of the United States – R$ 39.1 million) and BNDES (Brazil’s National Economic and Social Development Bank - R$ 69.3 million), as well as the issuance of simple, non-convertible debentures (R$ 208.8 million). R$ 41.6 million of the total debt refers to US dollar-denominated loans, which is totally hedged against foreign exchange rate fluctuations. In 2002, net financial expenses amounted to R$ 18.9 million, a 57% decrease versus 2001. In the 4Q02 the net amount reached R$ 4.1 million, compared to R$ 8.7 million in the 4Q02. This reduction occurred thanks to financial revenues resulting from short-term cash investments. Market The Company ended the year with 1,723,660 users, of which 508,616 are postpaid and 1,215,044 are prepaid, representing 30% and 70% respectively of the total. The prepaid and postpaid bases grew by 22% and 7%, respectively. In terms of gross additions, 395,111 new prepaid customers were acquired, as well as 107,528 postpaid, reflecting growth of 10% and 18%, respectively, vs. 2001 additions. This growth has not hindered the Company’s profitability. At the end of the 4Q02, market share was approximately 61% and the total penetration rate was 18%. The Company covers 248 municipalities and 2.3 thousand kilometers of highways. The Company’s services are available to 81% of the total population in the regions in which it operates. Relevant Facts Personal Mobile Service (SMP) On December 10, 2002, Tele Celular Sul’s management announced that, as part of the implementation of the measures approved in the general meetings of TELEPAR and TELESC, held on November 19, 2002, and of CTMR, held on November 21, 2002, the Operators and the National Telecommunications Agency – Anatel (Agência Nacional de Telecomunicações) signed, on December 10, 2002, a Statement of Migration from the Cellular Mobile Service (SMC) concession to the regulatory system of the Personal Mobile Service (SMP). 8
  • 8. Anatel authorizes the adjustment of tariffs Anatel authorized the operators controlled by Tele Celular Sul to adjust usage tariffs by 21.96%, up to R$0.3443, from R$0.2823 (both figures net of taxes). The new tariffs will go into effect as from 02/06/2003. Services plan tariffs were also adjusted from 02/11/03. The average adjustment was 7.8%, below the rate authorized by Anatel (21.96%), taking in account market conditions and in order to ensure competitiveness. ______________________________________________________________ “This release contains future estimates and/or forward-looking statements. These expectations are based on a number of assumptions. These expectations are subject to the risks and uncertainties inherent to future estimates and/or forward-looking statements. The results may differ materially from the expectations expressed in the future estimates and/or forward looking statements if one or more of those assumptions and expectations proves to be imprecise or fails to materialize.” 9
  • 9. Highlights 4Q02 4Q01 3Q02 2002 2001 Total Subscribers 1,723,660 1,603,913 1,660,164 1,723,660 1,603,913 Postpaid 508,616 605,592 499,536 508,616 605,592 Prepaid 1,215,044 998,321 1,160,628 1,215,044 998,321 Estimated Population in the Region (million) 15 15 15 15 15 Municipalities Served 248 232 235 248 232 Estimated Total Penetration 18% 16% 17% 18% 16% Market Share 61% 66% 63% 61% 66% Marginal Market Share 52% 46% 51% 53% 48% TOTAL ARPU 1 R$ 38 R$ 38 R$ 38 R$ 38 R$ 39 TOTAL MOU 99 118 99 98 115 SAC R$ 108 R$ 110 R$ 91 R$ 96 R$ 161 Investment (million) 47 54 8 69 158 Gross Additions 163,473 131,870 135,628 502,639 449,320 Net Additions 63,496 69,347 24,886 119,747 187,429 Churn 6% 4% 7% 23% 17% Ponts of sale (including own stores) 917 937 844 917 937 Employees 1,150 1,233 1,107 1,015 1,233 Note: (1) Average Net Revenue per Customer (2) Calculated on the Average Customer Base EBITDA Calculation 4Q02 4Q01 3Q02 2002 2001 Net Service Revenues 193,688 177,960 189,798 749,006 700,355 Net Operating Sales Revenues 58,233 49,372 36,752 142,258 91,074 Total Net Revenue 251,921 227,332 226,55 891,264 791,429 Operating Profit (Loss) 1 19,625 16,585 34,840 106,450 76,203 Defered depreciation / amortization 51,194 46,914 49,376 199,978 173,042 Amortization of privatization premium 6,756 6,744 7,638 27,029 26,961 Financial Revenues (28,583) (22,098) (73,071) (143,560) (61,638) Financial Expenses 32,638 30,817 74,25 162,519 106,043 EBITDA 81,630 78,962 93,033 352,416 320,611 EBITDA Margin (%) 32.4% 34.7% 41.1% 39,5% 40.5% EBITDA Margin (%) over net service revenues 42.1% 44.4% 49.0% 47.1% 45.8% Norte: (1) Included interest in TIMNET equity. 10
  • 10. TELE CELULAR SUL PARTICIPAÇÕES S.A. Balance Sheets December 31, 2002 and 2001 In Thousand of Reais Company Consolidated 2002 2001 2002 2001 Assets Current assets Cash and cash equivalents 3,538 1,099 11,147 5,462 Marketable securities 5,388 9,843 421,687 134,397 Trade accounts receivable 165,801 148,862 Inventories 15,573 21,856 Recoverable taxes 1,414 4,900 42,386 30,853 Deferred taxes 7,874 1,522 44,590 22,344 Interest on shareholders' equity 18,523 Other assets 645 832 4,607 12,423 18,859 36,719 705,791 376,197 Long-term assets Subsidiaries 3,150 3,176 Marketable securities 7,705 Recoverable taxes 4,667 5,268 Deferred taxes 1,009 774 184,673 235,986 Judicial deposits 11,148 10,908 Other assets 36 14 774 1,889 4,195 3,964 208,967 254,051 Permanent assets Investments 872,170 810,929 24,320 28,707 Property, plant and equipment 79 96 655,949 775,575 Deferred charges 52,858 67,649 872,249 811,025 733,127 871,931 Total assets 895,303 851,708 1,647,885 1,502,179 The accompanying notes are na integral part of these consolidated financial statements 11
  • 11. TELE CELULAR SUL PARTICIPAÇÕES S.A. Balance Sheets December 31, 2002 and 2001 In thousand of Reais Company Consolidated 2002 2001 2002 2001 Liabilities and shareholders' equity Current Suppliers 2,777 2,330 123,677 63,389 Loans and financing 38,052 21,987 Debentures 210,114 8,860 Payroll 11,943 10,389 14,115 13,083 Taxes and contributions payable 20 854 42,958 20,794 Interest on shareholders' equity 16,415 20,450 17,697 26,636 Dividends payable 12,285 1,755 12,489 2,184 Other liabilities 3,565 5,247 24,968 14,548 47,005 41,025 484,070 171,481 Long-term liabilities Loans and financing 72,919 103,539 Debentures 200,000 Taxes and contributions payable 74,193 60,727 Provision for pension plan 2,833 2,239 2,833 2,239 Provision for contingencies 135 40 8,951 6,095 Other liabilities 75 75 2,968 2,354 158,896 372,675 Minority interests 159,589 149,694 Shareholders' equity Paid-up capital 324,666 245,033 324,666 245,033 Capital reserve 178,062 195,695 178,062 195,695 Revenue reserves 342,602 367,601 342,602 367,601 845,330 808,329 845,330 808,329 Total liabilities 895,303 851,708 1,647,885 1,502,179 The accompanying notes are na integral part of these consolidated financial statements 12
  • 12. Statements of Income December 31, 2002 and 2001 In thousand of Reais Company Consolidated 2002 2001 2002 2001 Gross revenue 1,145,948 1,056,346 Deductions from gross revenues (254,684) (264,917) Net operating revenue 891,264 791,429 Costs of services rendered and goods sold (486,383) (406,033) Operating income 404,881 385,396 Operating revenues (expenses) Selling (185,446) (181,424) General and administrative (7,319) (6,018) (83,346) (71,909) Equity result 62,265 62,580 (4,288) (1,888) Other operating revenues (expenses), net 47 (973) (14,902) (15,584) 54,993 55,589 (287,982) (270,805) Operating income before interest results 54,993 55,589 116,899 114,591 Interest revenues (expenses) Interest revenues 4,908 27,062 121,310 45,278 Interest expenses (789) (22,717) (103,535) (72,045) Foreign exchange gain (losses), net 75 (223) (36,734) (17,638) 4,194 4,122 (18,959) (44,405) Operating income 59,187 59,711 97,940 70,186 Nonoperating revenues (expenses), net (256) (127) 10 Income before income taxes and minority interests 59,187 59,455 97,813 70,196 Income and social contribution taxes 6,587 434 (19,473) 672 Minority interests (12,566) (10,979) Net income 65,774 59,889 65,774 59,889 Number of oustanding shares (thousands) 0.19 0.17 The accompanying notes are na integral part of these consolidated financial statements 13

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