Oi registers a loss of R $ 3.4 billion and a 59% increase in debt | Business

THE Hi released the financial statement for the 2nd quarter of 2020 with a net loss of R $ 3.4 billion, an increase of 118.7% over last year. The company had a 59.4% increase in net debt and a drop in the number of customers. The operator faces a judicial reorganization process and tries to put in place a restructuring plan, which involves the sale of the mobile phone unit and partners to expand the fiber optic network.

Oi store in mall.  Photo: Disclosure

See the main highlights of the 2nd quarter of 2020 and the comparison with the same period of 2019:

Indicator 2nd quarter of 2020 2nd quarter of 2019 Difference
Net loss R $ 3.4 billion R $ 1.55 billion + 118.7%
Total net revenue R $ 4.54 billion R $ 5.09 billion -10.8%
Routine EBITDA (earnings before interest, taxes, depreciation and amortization) R $ 1.35 billion R $ 1.59 billion -15%
Routine EBITDA margin 29.9% 31.4% -1.5 pp
Net debt R $ 20.03 billion R $ 12.5 billion + 59.4%
Capex (investments) R $ 1.75 billion R $ 2.06 billion -14.7%
Revenue Generating Units (accesses) 52.3 million 55.8 million -6.3%

Oi Fibra grows, but is far from exceeding copper

The residential segment was the most affected by the drop in net revenue, with a decrease of 14.8% in relation to the previous year. The services provided on the copper network and satellite pay TV (DTH) were responsible for the negative difference in the indicators, with a drop of 31.2% in the annual comparison.

Oi ended the period with 11.7 million units generating revenue from residential services, down 15.9%. Disconnections are significant in copper, with a drop in the number of fixed lines (-29.5%), broadband (-37.8%) and DTH TV (-20.1%).

The company justifies that the drop was driven by the anticipation of delinquency terminations from 120 to 90 days, in addition to intense competition with small fixed internet providers, which tend to offer higher speeds than in the service provided by ADSL and VDSL.

The Oi Fibra service grew by 515.7% and totaled 1.19 million broadband accesses, 1.14 million fixed telephone lines using VoIP and 72 thousand pay TV customers via IPTV. FTTH coverage reached 6.7 million homes (home passed), serving 1.3 million households (home connected). The operator added that it reached 1.5 million connected homes in July 2020.

The balance sheet shows that there is still a lot to do for Oi to become a fiber operator. Copper-connected customers brought R $ 8.1 billion in revenue to the operator, while FTTH subscribers brought R $ 2.41 billion. Investments in Oi Fibra were dominant in general Capex and totaled R $ 1.12 million in the period, up 49.7% in the year and 4.5% in the quarter.

ARPU (average revenue per user) for residential services grew 0.9%, reaching R $ 79.6.

Oi loses cell lines amid sale of mobile division

The mobile service had a major impact of the pandemic on all operators, and with Oi it was no different: net service revenue fell by 6.5%, leveraged mainly by the prepaid segment, which decreased by 17.7 %.

The operator justifies that social isolation was one of the responsible factors, due to the closings of stores, recharging points and the decrease of people circulating. Total recharges fell 8.6% in the year and 4.8% in the period, while the number of recharge customers fell 16.1% in the year and 5.4% in the quarter.

Postpaid revenue increased by 6.5% in the year, but decreased by 0.7% in the quarterly comparison. The operator ended the period with 33.9 million revenue generating units, of which 9.7 million are postpaid (+ 13.9%) and 24.2 million use prepaid (-7.3 %).

The mobile services ARPU closed at R $ 15.5, down 3.5% in the year and 3.9% in the quarter. The operator invested R $ 282 million in the mobile segment during the period, down 33% in the annual comparison.

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