PHAROL, SGPS S.A. PHAROL, SGPS S.A. hereby informs on the Material fact disclosed by Oi, S.A., on the 2015 fourth quarter results, as detailed in the company's document attached hereto.
PHAROL, SGPS S.A.
Public company
Share capital Euro 26,895,375 Registered in the Commercial Registry Office of Lisbon
and Corporation no. 503 215 058
PHAROL is listed on the Euronext (PHR). Information may be accessed on Bloomberg under the symbol PHR PL.
Luis Sousa de Macedo Investor Relations Director ir@pharol.pt
Tel.: +351 212 697 698
Fax: +351 212 697 949
pharol.pt
3/
2015
Investor Relations
QUARTERLY REPORT
Consolidated Information and Earnings Release (Unaudited)This report contains the operating and financial performance of Oi S.A. and its direct and indirect subsidiaries for the fourth quarter and full year of 2015.
24/2016
1
Oi S.A. www.oi.com.br/ir
Oi ended 2015 with routine EBITDA of R$ 7,230 million and Operational Cash Flow (OCF) of R$ 3,182 million (+R$ 1,644 million vs. 2014) for the Brazilian operations, delivering its results above the midpoint of the 2015 guidance ranges (routine EBITDA between R$ 7.0 and 7.4 billion and OCF improvement between R$ 1.2 and 1.8 billion in Brazil). This achievement, despite the unfavorable macroeconomic scenario with a GDP drop of 3.8% and an annual inflation of 10.7%, reinforces Oi'scommitment and success to execute its business transformation process, focusing on the quality and profitability of its customer base, operational efficiency and strict cost control, infrastructure optimization, and commercial recovery with the launch of new portfolio of offerings.
In 4Q15, routine EBITDA of the Brazilian operations reached R$ 1,745 million, an 3.3% increase over the same period last year, as a result of the efforts to increase the profitability of the customer base and the continued focus on cost efficiency, which reduced by 11.0% compared to 4Q14. For the full year, routine Opex fell by 8.5%, a real reduction of over 17%, considering the inflation effect in 2015.
Capex from Brazilian operations reached R$ 1,072 million in this quarter (+1.6% compared to 4Q14), of which 90.1% directed to the network. In 2015, Capex totaled R$ 4,048 million in Brazil, 20.2% lower than the previous year. In 2015, the Company focused on initiatives of investment optimization, such as contract renegotiations, network sharing, and the implementation of structural projects to modernize the infrastructure through technologies to increase network efficiency, generating more capacity of traffic with lower costs per voice minute and per Mbps of data. The execution of these projects allowed the Company to deliver a substantial growth of traffic on its network, at the same time that it reduced network congestion and presented consistent improvement in the network quality metrics. These efforts are aligned to Oi's strategy on prioritizing the improvement of quality of the customer experience.
OCF (routine EBITDA minus Capex) of the Brazilian operations totaled of R$ 673 million in the quarter, up 6.2% compared to 4Q14, explained by the routine EBITDA growth and the efficiency in the allocation of investments.
Total net customer revenues (excluding handset sales and network usage) reached R$ 6,078 million for the Brazilian operations in the quarter (-2.4% vs. 4Q14), reflecting the challenging macroeconomic environment, partially offset by the growth on pay TV and mobile data revenues and the increase in ARPU. In 2015 total net customer revenues totaled R$ 24,478 million, practically stable compared to the previous year.
In the Personal Mobility segment, net customer revenues, which excludes handsets sales and MTR revenues, reached R$ 1,830 million in the quarter, an increase of 1.2% year-on-year, driven by the 34.8% growth in data revenues (including VAS). In 2015 net customer revenues of the segment totaled R$ 7,166 million, a solid increase of 5.3% versus 2014. This performance was due to the increase of 47.6% in data revenues in the year, the highest data growth of the sector in 2015. The data mix on service revenues reached 37.1% in the year, an increase of 12 p.p. in the last twelve months, also the best performance of the market in the year.
The new plans of Personal Mobility have shown promising results, such as the average increase of 17% in recharges of customers who migrated to Oi Livre per week, and the sales increase of 15% and 30% for postpaid and Controle plans, respectively. The Oi Livre offer, for example, has reached more than 10 million customers in January, 26% of total prepaid base, in only three months from its launch.
In the Residential segment, ARPU, which reached R$ 79.6 in the quarter (+ 5.8% y.o.y.), continues to show improvement in all products, as a result of the Company's focus profitability of its customer base. Net revenues reached R$ 2,392 million, down 3.3% compared to 4Q14, due to the decline of fixed-to-mobile tariffs (VC) and the lower fixed line base, partially offset by the pay TV revenues growth. With an all-net model and supported by the launch of VDSL and Oi Play, the Company's convergent offerOi Total, which combines all 4 services offered by the Company (fixed line, broadband, TV and mobile) with, has presented preliminary results that indicates sales increase in all 14 states of the country in which this offer has already been launched.
Net revenues in the Corporate / SMEs segment reached R$ 1,984 million in 4Q15, an annual decrease of 4.8%, mainly impacted by the macroeconomic environment. For the SMEs segment, Oi launched the plan Oi Mais Empresas, with an innovative model of flat-fee charging, easier to understand, buy and use. In parallel, Oi launched the app Oi Mais Empresas, a fully digital customer service for SMEs. The launch of this app is one of the first steps towards Oi's businessdigitization, which is one of the pillars of the Company'stransformation plan.
At the end of 2015, gross debt stood at R$ 54,981 million, of which 70.3% were composed by international capital market securities and the remaining composed by local capital market securities, development banks, ECAs and commercial banks. The Company'scash position amounted to R$ 16.826 million as of December 31, 2015, and net debt registered R$ 38,155 million at year-end (+2.5% versus 3Q15), impacted by the financial results, partially offset in the quarter by the positive accounting effect of R$ 739 million related to the mark-to-market of derivatives and by the operating cash generation of R$ 174 million in Brazil.
The Company recorded consolidated net loss of R$ 4.5 billion in 4Q15 and R$ 5.3 billion for 2015, mainly impacted by 3 accounting adjustments (no cash effect), in the total amount of R$ 3.1 billion, all of them related to the impairment of assets in the balance sheet: (i) the impairment adjustment with a loss of $ 89 million over the fair value of Oi´s financial investments in Africa that are consolidated by the Company, affecting the operational earnings; (ii) the impairment adjustment with a loss of R$ 1,582 million over the fair value of Oi´s financial investments in Africa that are not consolidated by the Company, including Unitel, affecting the financial results; and (iii) the impairment adjustment on deferred income tax assets, in the amount of R$ 1,392 million, for the companies in the group that did not provide expectation of generating sufficient future taxable income to offset tax credits. The proforma net loss for the continuing operations, excluding the impact of these accounting (non-cash) adjustments, would be about R$ 1.5 billion in 4Q15 and R$ 3.4 billion in 2015, basically driven by the financial expenses, whose variation in comparison to the same period of the previous year resulted from the deterioration of the Brazilian financial market conditions, with significant impact on the increase of interest rates.
Pharol SGPS SA issued this content on 24 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 24 March 2016 20:37:17 UTC
Original Document: http://conteudos.pharol.pt/Documents/EN/Announcements/2016/03_March/Com24Mar16_4T15_oi_en.pdf
