SECURITIES AND EXCHANGE COMMISSION
For the month of February, 2009
Commission File Number 1-14493
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _______ No ___X____
FOURTH QUARTER AND YEAR 2008 CONSOLIDATED RESULTS
February 13, 2009 – VIVO Participações S.A. announces today its consolidated results for the fourth quarter 2008 (4Q08) and for year 2008. The Company’s operating and financial information, except as otherwise indicated, is presented in Brazilian Reais in accordance with Brazilian Corporate Law, and the comparable figures refer to the fourth quarter 2007 (4Q07), except as otherwise mentioned.
The conclusion of the acquisition of Telemig Celular Participações, the launching of the 3.5G – WCDMA/HSUPA network – with the largest WCDMA coverage in Brazil, the beginning of operation in the Northeast states, among many other achievements, converged to one sole goal: to provide the best services for the individuals to be able to connect themselves – whenever wished, however wished, wherever wished, every time more. Thus, we fostered the company in a network, which brings along a lot of opportunities for people to develop themselves, progress and live better. Thus acting, we fed a virtuous cycle which is reflected on the self-sustainable evolution of our own business, closing year 2008 with the best result since Vivo was organized.
Price as of Per share Free Float- ON Shares 10.5%
Market Cap R$ 10,415 million as of 12/31/2008
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HIGHLIGHTS
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MESSAGE FROM THE PRESIDENT AND CEO
From any view point of analysis, 2008 was an excellent year for Vivo. We reaffirmed our market leadership with a market share of 29.8%. This means that, out of the 150.6 million Brazilians owning cellular phones in the end of December 2008, 44.9 million were our customers. In terms of revenue per user, our share was still higher, approximately 33%. The financial income earned in the year is extremely significant. The net operating revenue grew 14.2% over 2007, recording R$ 15,819.1 million. The EBITDA margin of 30.8% on the operating revenue is 5.2 percentile points higher than it was last year. In the same comparison, the net profit calculated in accordance with the corporate law reverted the negative result recorded in the previous year, totaling R$ 389.7 million.
Undoubtedly, year 2008 was a period of major achievements, among which are our starting to operate in Minas Gerais state, the opening of our operations in the Northeast region, and the launching of 3.5G – WCDMA/HSUPA services. But what is in the core of these and other achievements is something to be sought in a strategy that started to be developed in middle 2005, demanding firm and courageous decisions. We fought fraud and cloning problems, unified systemic platforms and carried out a corporate reorganization. We made a daring decision: to build a GSM network (which technology became the prevailing one) overlapping the CDMA network, in such manner that our customers could be able to talk in the whole domestic territory and in more than 170 countries. In 2007, we acquired Telemig Celular, in order to start operating in Minas Gerais state, as well as the 1.9 (Northeast) and 3G bands. These actions were responsible for giving rise to the 2008 achievements.
Connecting people is our business, doing it with the best quality is our focus. Accordingly, we have become trustworthy to our customers, employees, partners, society, our investors and shareholders. Thus, 2008 results deserve to be reviewed beyond their significant figures. They were generated as from a consistent strategy, pursued by Vivo on a determined and courageous manner in the last years and which serves as basis for its future in a self-supported growth route.
ROBERTO LIMA
President and CEO
Basis for presentation of results
Figures disclosed are subject to differences, due to rounding-up procedures. Information for 4Q07, 2007 year-to-date and 2008 year-to-date was prepared in combination with the results of Telemig Celular Participações, thus allowing comparison with the current quarter results, in which Telemig data are already consolidated and, whenever applicable, re-classified.
HIGHLIGHTS | |||||||||
Combined | |||||||||
Consolidated | Consolidated | Combined | Accumulated | ||||||
R$ million | 4 Q 08 | 3 Q 08 | Δ% | 4 Q 07 | Δ% | 2008 | 2007 | Δ% | |
Net operating revenue | 4,268.3 | 4,078.2 | 4.7% | 3,744.3 | 14.0% | 15,819.1 | 13,853.5 | 14.2% | |
Net service revenues | 3,788.8 | 3,644.0 | 4.0% | 3,316.9 | 14.2% | 14,170.0 | 12,349.7 | 14.7% | |
Net handset revenues | 479.5 | 434.2 | 10.4% | 427.4 | 12.2% | 1,649.1 | 1,503.8 | 9.7% | |
Total operating costs | (2,872.0) | (2,753.9) | 4.3% | (2,765.4) | 3.9% | (10,951.6) | (10,307.1) | 6.3% | |
EBITDA | 1,396.3 | 1,324.3 | 5.4% | 978.9 | 42.6% | 4,867.5 | 3,546.4 | 37.3% | |
EBITDA Margin (%) | 32.7% | 32.5% | 0.2 p.p. | 26.1% | 6.6 p.p. | 30.8% | 25.6% | 5.2 p.p. | |
Depreciation and amortization | (817.7) | (766.9) | 6.6% | (785.7) | 4.1% | (3,030.5) | (2,703.7) | 12.1% | |
EBIT | 578.6 | 557.4 | 3.8% | 193.2 | 199.5% | 1,837.0 | 842.7 | 118.0% | |
Net income | 215.5 | 133.9 | 60.9% | n.a. | n.a. | n.a. | n.a. | n.a. | |
Net income Consolidated | 215.5 | 133.9 | 60.9% | 26.2 | 722.5% | 389.7 | (99.8) | n.a. | |
Capex | 1,319.8 | 868.4 | 52.0% | 1,195.7 | 10.4% | 4,015.6 | 2,212.3 | 81.5% | |
Capex over net revenues | 30.9% | 21.3% | 9.6 p.p. | 31.9% | -1.0 p.p. | 25.4% | 16.0% | 9.4 p.p. | |
Operating cash flow | 76.5 | 455.9 | -83.2% | (216.8) | n.a. | 851.9 | 1,334.1 | -36.1% | |
Change in working capital | (1,186.6) | 524.5 | n.a. | 964.8 | n.a. | (649.8) | 488.9 | n.a. | |
Customers (thousand) | 44,945 | 42,277 | 6.3% | 37,384 | 20.2% | 44,945 | 37,384 | 20.2% | |
Net additions (thousand) | 2,668 | 1,842 | 44.8% | 2,449 | 8.9% | 7,561 | 4,896 | 54.4% |
Operating Cash Flow
EBITDA Growth contributes to generation of Operating Cash Flow. |
The Operating Cash Flow (EBITDA-CAPEX) recorded a positive result of R$ 76.5 million in the quarter and of R$ 851.9 million in the year-to-date, which was stimulated by the growth in the EBITDA, even with increased investment in 4Q08. This fact, added to the variation in the working capital, in the year-to-date, has accounted for a positive result of R$ 202.1 million. |
Capital Expenditures (CAPEX)
Investments in 4Q08 as a result of launching of the WCDMA/HSUPA network, increase of capacity and Northeast coverage. |
The expenditures provided the increase in the GSM/EDGE capacity and continuance with the expansion of the footprint of the WCDMA/HSUPA network (wireless high speed data traffic), allowing Vivo to offer broadband services (Vivo ZAP 3.5 G), Digital TV and Video-Call. The company closed the year with coverage in more than 3,000 cities. CAPEX in 4Q08 represents 30.9% of the net revenue. In the year-to-date, the investments total R$ 4,015.6 million (corresponding to 25.4% of the net revenue), mostly applied to acquisition of the licenses. The coverage of 314 municipalities with 3.5G consolidates the leadership of this technology. |
CAPEX - VIVO | ||||||
Combined | ||||||
Consolidated | Consolidated | Combined | Accum | |||
R$ million | 4 Q 08 | 3 Q 08 | 4 Q 07 | 2008 | 2007 | |
Network | 978.4 | 620.6 | 848.2 | 1,988.7 | 1,380.9 | |
Technology / Information System | 109.8 | 96.0 | 149.4 | 292.6 | 308.4 | |
Licenses | 0.0 | 0.0 | 50.4 | 1,201.2 | 50.4 | |
Adjust of Licenses to Present Value (Inst CVM 469/08) | 74.8 | 0.0 | 0.0 | (3.5) | 0.0 | |
Products and Services, Channels, Administrative and others | 156.8 | 151.8 | 147.7 | 536.6 | 472.6 | |
Total | 1,319.8 | 868.4 | 1,195.7 | 4,015.6 | 2,212.3 | |
% Net Revenues | 30.9% | 21.3% | 31.9% | 25.4% | 16.0% |
CONSOLIDATED OPERATING PERFORMANCE - VIVO | |||||||||
Accumulated | |||||||||
4 Q 08 | 3 Q 08 | Δ% | 4 Q 07 | Δ% | 2008 | 2007 | Δ% | ||
Total number of customers (thousand) | 44,945 | 42,277 | 6.3% | 37,384 | 20.2% | 44,945 | 37,384 | 20.2% | |
Contract | 8,561 | 8,115 | 5.5% | 7,080 | 20.9% | 8,561 | 7,080 | 20.9% | |
Prepaid | 36,384 | 34,162 | 6.5% | 30,304 | 20.1% | 36,384 | 30,304 | 20.1% | |
Market Share (*) | 29.8% | 30.0% | -0.2 p.p. | 30.9% | -1.1 p.p. | 29.8% | 30.9% | -1.1 p.p. | |
Net additions (thousand) | 2,668 | 1,842 | 44.8% | 2,449 | 8.9% | 7,561 | 4,896 | 54.4% | |
Market Share of net additions (*) | 27.1% | 24.2% | 2.9 p.p. | 29.8% | -2.7 p.p. | 25.5% | 23.2% | 2.3 p.p. | |
Market penetration | 79.1% | 73.1% | 6.0 p.p. | 63.5% | 15.6 p.p. | 79.1% | 63.5% | 15.6 p.p. | |
SAC (R$) | 74 | 76 | -2.6% | 98 | -24.5% | 80 | 102 | -21.6% | |
Monthly Churn | 2.5% | 2.6% | -0.1 p.p. | 2.3% | 0.2 p.p. | 2.6% | 2.4% | 0.2 p.p. | |
ARPU (in R$/month) | 29.1 | 29.4 | -1.0% | 30.9 | -5.8% | 29.2 | 30.1 | -3.0% | |
ARPU Inbound | 12.4 | 13.0 | -4.6% | 13.8 | -10.1% | 12.9 | 13.9 | -7.2% | |
ARPU Outgoing | 16.8 | 16.4 | 2.4% | 17.2 | -2.3% | 16.3 | 16.3 | 0.0% | |
Total MOU (minutes) | 85 | 89 | -4.5% | 80 | 6.3% | 87 | 76 | 14.5% | |
MOU Inbound | 31 | 32 | -3.1% | 36 | -13.9% | 32 | 35 | -8.6% | |
MOU Outgoing | 54 | 57 | -5.3% | 44 | 22.7% | 55 | 40 | 37.5% | |
Employees | 8,386 | 8,286 | 1.2% | 8,423 | -0.4% | 8,386 | 8,423 | -0.4% | |
(*) source: Anatel |
OPERATING HIGHLIGHTS
The offers in 2008 were focused on selected growth and value customers, mainly in high end segments.
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Rationality in the acquisition cost and services attractiveness reduce SAC by 21.6% in the year-to-date 2008 |
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Churn of 2.5% in the quarter, relatively constant in 2008
Growth of the customer base arithmetically dilutes the ARPU.
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Stimulation of on-net and mobile-fixed traffic.
Growth of the outgoing traffic due to the campaigns.
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NET OPERATING REVENUES - VIVO | |||||||||
Combined | |||||||||
Consolidated | Consolidated | Combined | Accum | ||||||
R$ million | 4 Q 08 | 3 Q 08 | Δ% | 4 Q 07 | Δ% | 2008 | 2007 | Δ% | |
Access and Usage | 1,804.2 | 1,653.9 | 9.1% | 1,535.8 | 17.5% | 6,494.0 | 5,713.9 | 13.7% | |
Network usage | 1,562.5 | 1,568.6 | -0.4% | 1,440.4 | 8.5% | 6,039.7 | 5,503.8 | 9.7% | |
Data Revenues plus VAS | 379.4 | 364.5 | 4.1% | 314.2 | 20.8% | 1,438.9 | 1,041.7 | 38.1% | |
Other services | 42.7 | 57.0 | -25.1% | 26.5 | 61.1% | 197.4 | 90.3 | 118.6% | |
Net service revenues | 3,788.8 | 3,644.0 | 4.0% | 3,316.9 | 14.2% | 14,170.0 | 12,349.7 | 14.7% | |
Net handset revenues | 479.5 | 434.2 | 10.4% | 427.4 | 12.2% | 1,649.1 | 1,503.8 | 9.7% | |
Net Revenues | 4,268.3 | 4,078.2 | 4.7% | 3,744.3 | 14.0% | 15,819.1 | 13,853.5 | 14.2% |
OPERATING REVENUE
Growth of 14.7% in the net service revenue in the year-to-date 2008
Continuous growth of data revenue and VAS. |
Total net revenue grew 14.0% over 4Q07, due to the growth in the service revenue, which represents growth in all components. Such growth is a result of the natural growth in the customer base, of the actions for stimulation of the recharges and of the sale of products and VAS. In relation to 3Q08, the total net revenue increased by 4.7%, with highlight for the 10.4% increase in the revenue from handsets, as a result of the commercial activity. The increase of 17.5% in "access and usage revenue", when compared to 4Q07, is mainly due to the increase in the total outgoing revenue, by 18.6%. This was due to the quality and the increase of the customer base and the growth in the total outgoing traffic because of the incentive to usage. When compared to 3Q08, there was an increase of 9.1% in the access and usage revenue as a result of the growth in the customer base, in addition to the stimulation for usage in campaigns directed to the customer base. Data revenue plus VAS has continued to represent 10.0% of the Total Service Revenue, having recorded a growth of 20.8% in 4Q08 over 4Q07. Several factors contributed to this: increase in the number of customers with access to Vivo Zap (mobile internet), of customers with Blackberry handsets and SmartMail, and the increase in the use of SMS Interactivity, which recorded a growth of more than 400%. The peer to peer SMS has continued to be the largest selling service, accounting for 46% of the data and VAS revenue. In December, Vivo had more than 7 million sole users and more than 570 million of page views in WAP. The stimulation for usage is achieved by campaigns and broadcast and development of thematic portals, such as “Eu Vivo Cinema” (“Camp Rock” and 007 Quantum of Solace”) and “Vivo na Música”. Mallu Magalhães, who won success in My Space, launched her 1st album in October 2008 only to Vivo customers. |
OPERATING COSTS - VIVO | |||||||||
Combined | |||||||||
Consolidated | Consolidated | Combined | Accum | ||||||
R$ million | 4 Q 08 | 3 Q 08 | Δ% | 4 Q 07 | Δ% | 2008 | 2007 | Δ% | |
Personnel | (205.9) | (194.8) | 5.7% | (221.0) | -6.8% | (795.0) | (810.1) | -1.9% | |
Cost of services rendered | (1,062.4) | (998.9) | 6.4% | (900.4) | 18.0% | (4,025.2) | (3,450.7) | 16.6% | |
Leased lines | (87.1) | (72.2) | 20.6% | (69.2) | 25.9% | (286.8) | (274.6) | 4.4% | |
Interconnection | (571.9) | (571.4) | 0.1% | (509.5) | 12.2% | (2,208.5) | (1,828.0) | 20.8% | |
Rent/Insurance/Condominium fees | (85.4) | (73.7) | 15.9% | (54.9) | 55.6% | (291.4) | (244.1) | 19.4% | |
Fistel and other taxes and contributions | (177.7) | (169.0) | 5.1% | (146.0) | 21.7% | (670.7) | (554.4) | 21.0% | |
Third-party services | (136.1) | (124.7) | 9.1% | (116.7) | 16.6% | (534.7) | (476.3) | 12.3% | |
Others | (4.2) | 12.1 | n.a. | (4.1) | 2.4% | (33.1) | (73.3) | -54.8% | |
Cost of goods sold | (720.6) | (615.0) | 17.2% | (672.1) | 7.2% | (2,473.3) | (2,236.4) | 10.6% | |
Selling expenses | (842.0) | (814.1) | 3.4% | (829.2) | 1.5% | (3,300.4) | (3,000.9) | 10.0% | |
Provision for bad debt | (59.5) | (71.8) | -17.1% | (82.9) | -28.2% | (312.1) | (390.5) | -20.1% | |
Third-party services | (640.0) | (601.4) | 6.4% | (603.2) | 6.1% | (2,390.9) | (2,090.1) | 14.4% | |
Customer loyalty and donatios | (97.7) | (103.6) | -5.7% | (99.6) | -1.9% | (438.2) | (368.0) | 19.1% | |
Others | (44.8) | (37.3) | 20.1% | (43.5) | 3.0% | (159.2) | (152.3) | 4.5% | |
General & administrative expenses | (76.4) | (160.6) | -52.4% | (183.2) | -58.3% | (600.8) | (701.6) | -14.4% | |
Third-party services | (47.3) | (133.5) | -64.6% | (154.2) | -69.3% | (492.0) | (589.5) | -16.5% | |
Others | (29.1) | (27.1) | 7.4% | (29.0) | 0.3% | (108.8) | (112.1) | -2.9% | |
Other operating revenue (expenses) | 35.3 | 29.5 | 19.7% | 40.5 | -12.8% | 243.1 | (107.4) | n.a. | |
Operating revenue | 130.1 | 92.6 | 40.5% | 120.8 | 7.7% | 620.7 | 350.9 | 76.9% | |
Operating expenses | (97.6) | (69.7) | 40.0% | (73.4) | 33.0% | (414.0) | (461.4) | -10.3% | |
Other operating revenue (expenses) | 2.8 | 6.6 | -57.6% | (6.9) | n.a. | 36.4 | 3.1 | 1074.2% | |
Total costs before depreciation / amortization | (2,872.0) | (2,753.9) | 4.3% | (2,765.4) | 3.9% | (10,951.6) | (10,307.1) | 6.3% | |
Depreciation and amortization | (817.7) | (766.9) | 6.6% | (785.7) | 4.1% | (3,030.5) | (2,703.7) | 12.1% | |
Total operating costs | (3,689.7) | (3,520.8) | 4.8% | (3,551.1) | 3.9% | (13,982.1) | (13,010.8) | 7.5% |
OPERATING COSTS
Strict control over structural costs contributes to keeping growth profitable. | The 18.0% increase in the cost of the services rendered in 4Q08, when compared with 4Q07, is the result of a 12.2% increase in the interconnection costs caused by an increase in the total outgoing traffic and an increase in the Fistel fee, due to the growth of the customer base, in addition to an increase in the leased lines. In comparison with 3Q08, which is positively impacted by the end of co-billing renegotiations, it recorded a growth of 6.4% related to the increase in leased lines expenses and third-party services. In the year-to-date 2008, this item recorded an increase of 16.6% due to the growth in interconnection expenses, Fistel Fee and third-party services, mainly in plant maintenance. |
Commercial and operational efficiency.
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Despite the increased commercial activity and the 21.7% growth in gross additions, the cost of goods sold in 4Q08 recorded an increase of 7.2% in relation to 4Q07. Worthy of mention: this rate is lower than the evolution of the commercial activity in the period. The growth is due to the foreign exchange appreciation between the two periods. In the year-to-date 2008, the increase of 10.6% has the same components mentioned above. |
In the 4Q08, the selling expenses grew 1.5% over 4Q07, reflecting the increase in expenses with third-party services, such as: publicity and advertising, outsourced labor and client care. The increase was almost fully offset by a reduction in the allowance for doubtful accounts. In the comparison with 3Q08, selling expenses increased by 3.4%, as a result of expenses with third-party services, especially publicity and advertising, and other expenses with materials for points of sale, having been offset by a reduction in the allowance for doubtful accounts.
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Allowance for doubtful accounts under control, despite the intense commercial activity. |
Both in relation to 4Q07 and to 3Q08, the allowance for doubtful accounts in 4Q08 showed a reduction of 28.2% and of 17.1%, respectively. The amount of R$ 59.5 million represents 1.0% of the total gross revenue, the lowest index since Vivo was organized. The drop is of 0.6 percentile points in relation to the 4Q07 (1.6% of the gross revenue) and of 0.2 percentile points in relation to 3Q08 (1.2% of the gross revenue). In the year-to-date 2008 in comparison to 2007, the allowance for doubtful accounts were reduced by 20.1%. In this quarter besides the collection actions and the strict control when granting credit, the result was positively impacted by the corporate segment credit recovery and by the same strategy through our campaigns that gave incentives to use thirteenth (13th) salary in the individual segment.
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The general and administrative expenses decreased by 58.3% in 4Q08 in relation to 4Q07, mainly due to the decrease in expenses with third-party services, especially technical assistance. In the comparison with 3Q08, the decrease was of 52.4%, reflecting lower expenses with third-party services, especially consulting, and others related to technical-administrative services, as well as settlements with suppliers.
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Other Operating Revenue/Expenses recorded revenue of R$ 35.3 million. This result was possible because of the reduction of expenses with taxes, duties and contributions and the drop in the provisions for contingencies, in addition to the increase in the revenue from fines. The comparison with 3Q08 also presents an increase in the revenues from recovered expenses, impacted by the increase in the provision for contingencies. As set forth in MP 449/08, the amounts which were previously accounted for as non-operating Revenues/Expenses started being posted to this account. The change resulted in a negative impact of R$ 2.3 million in this quarter, causing a direct effect on the EBITDA of the same amount. |
EBITDA
EBITDA margin of 32.7%. EBITDA recorded an increase of 42.6% in the 4Q08 over the 4Q07 and of 37.3% in the year-to-date 2008 |
The EBITDA (earnings before interests, taxes, depreciation and amortization) in the 4Q08 was R$ 1,396.3 million, an increase of 42.6% in relation to 4Q07. The EBITDA margin of 32.7% represents an increase of 6.6 percentile points. When compared to 3Q08, which already recorded an excellent result, the EBITDA had a 5.4% increase, with margin growing 0.2 percentile points. The result recorded in 4Q08 reflects the continued growth in the revenues due to the increase in the customer base, combined to a lower increase of costs, especially the structural costs, which were kept under strict control. This progress is also due to the stability in the cost of goods sold, made possible by the sales of GSM handsets, at lower acquisition cost. |
DEPRECIATION AND AMORTIZATION
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Depreciation and amortization expenses recorded an increase of 4.1% in relation to 4Q07, due to the depreciation of TDMA and CDMA technologies and to the digital ERBs, in addition to the amortization of the goodwill by the acquisition of Telemig. When compared to 3Q08, it recorded an increase of 6.6%, due to the investments made in the period. |
FINANCIAL REVENUES (EXPENSES) - VIVO | |||||||||
Combined | |||||||||
Consolidated | Consolidated | Combined | Accum | ||||||
R$ million | 4 Q 08 | 3 Q 08 | Δ% | 4 Q 07 | Δ% | 2008 | 2007 | Δ% | |
Financial Revenues | 65.2 | 96.6 | -32.5% | 56.3 | 15.8% | 330.3 | 260.7 | 26.7% | |
Other financial revenues | 90.5 | 96.6 | -6.3% | 83.9 | 7.9% | 371.8 | 288.3 | 29.0% | |
(-) Pis/Cofins taxes on financial revenues | (25.3) | 0.0 | n.a. | (27.6) | -8.3% | (41.5) | (27.6) | 50.4% | |
Financial Expenses | (312.7) | (240.2) | 30.2% | (165.9) | 88.5% | (871.0) | (699.9) | 24.4% | |
Other financial expenses | (236.4) | (140.5) | 68.3% | (123.6) | 91.3% | (547.3) | (463.7) | 18.0% | |
Gains (Losses) with derivatives transactions | (76.3) | (99.7) | -23.5% | (42.3) | 80.4% | (323.7) | (236.2) | 37.0% | |
Exchange rate variation / Monetary variation | (35.3) | (48.5) | -27.2% | 6.7 | n.a. | (79.1) | 13.0 | n.a. | |
Net Financial Income | (282.8) | (192.1) | 47.2% | (102.9) | 174.8% | (619.8) | (426.2) | 45.4% |
Charges on the financing of 3G licenses are reflected on the increase of the financial expenses. |
The net financial expenses of Vivo increased in the comparison between 4Q08 and 3Q08 by R$ 90.7 million. This variation is explained, mainly, by the recognition of the additional extraordinary provision made in the 3Q08 in the amount of R$67.0 million due to the recognition of financing charges of 3G licenses (pursuant to the conditions contained in the Invitation to Auction, the amount of the financing is adjusted to the IST – Telecommunication Services Index – added by 1% monthly) acquired by its subsidiary, Vivo S/A, with Anatel arising out of the reversal of the expected payment without charges until December 11, 2008 and by the extraordinary effect of the assessment of PIS/COFINS taxes on the allocation of the Interest on Own Capital in the amount of R$ 25.3 million. |
In relation to 4Q07, Vivo’s financial expense increased by R$ 179.9 million, mainly due to the recognition of the provision for charges on the financing of the 3G licenses acquired from Anatel, as detailed above, and to the increase in the net debt generated by the disbursements in the amount of R$ 2,664.5 million required for the acquisition of Telemig Celular Participações S/A (Control, Voluntary Public Offering and Mandatory Public Offering).
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LOANS AND FINANCING - VIVO | ||||||
CURRENCY | ||||||
Lenders (R$ million) | R$ | URTJLP * | UMBND ** | US$ | Yen | Total |
Structured Operations(1) | 361.6 | 1,422.4 | 9.5 | 862.6 | - | 2,656.0 |
Debentures | 1,078.4 | - | - | - | - | 1,078.4 |
Commercial Papers | 1,091.4 | - | - | - | - | 1,091.4 |
Resolution 2770 | 163.2 | - | - | 357.9 | 1,355.7 | 1,876.8 |
Anatel (Financing of 3G Licenses) | 1,196.1 | - | - | - | - | 1,196.1 |
Working Capital | 254.4 | - | - | - | - | 254.4 |
Others | 0.1 | - | - | 0.3 | - | 0.4 |
Adjust "Law 11.638/07" | (6.5) | - | - | (128.2) | (15.7) | (150.4) |
Total | 4,138.7 | 1,422.4 | 9.5 | 1,092.6 | 1,340.0 | 8,003.1 |
Exchange rate used | 1.971714 | 0.045729 | 2.337000 | 0.025800 | ||
Payment Schedule - Long Term | ||||||
2009 | 1,406.0 | 126.2 | 3.7 | 275.0 | 1,309.0 | 3,119.8 |
as from 2009 | 2,732.8 | 1,296.2 | 5.8 | 817.6 | 30.9 | 4,883.3 |
Total | 4,138.7 | 1,422.4 | 9.5 | 1,092.6 | 1,339.9 | 8,003.1 |
(1) - Structured operations along with development banks for investments: National Bank for Economic and Social Development (BNDES), Bank of the Northeast (BNB) and European Bank of Investments (BEI).
NET DEBT - VIVO | |||
Consolidated | Combined | ||
Dec 30.08 | Sep 30.08 | Dec 30.07 | |
Short Term | 3,119.8 | 2,388.1 | 1,999.5 |
Long Term | 4,883.3 | 3,461.7 | 2,539.8 |
Total debt | 8,003.1 | 5,849.8 | 4,539.3 |
Cash and cash equivalents | (2,271.7) | (1,971.8) | (2,981.1) |
Derivatives | (429.3) | 90.5 | 530.7 |
Net Debt | 5,302.1 | 3,968.5 | 2,088.9 |
(*) BNDES long term interest rate unit
(**) UMBND - prepared by the BNDES, it is a basket of foreign currencies unit, US dollar predominant
The Company has chosen the financing with ANATEL for the 3G licenses |
The Company closed year 2008 with a debt of R$ 8,003.1 million (R$ 4,539.3 million in the end of 2007), of which 31% is denominated in foreign currency, being fully protected by hedge transactions. In the comparison between the net debt in 4Q08 versus 4Q07, there was an increase of R$ 3,213.2 million, due to the large amount of investments along the year, among which worthy of mention are the acquisition of 3G licenses in the amount of R$ 1,201.2 million and the acquisition of Telemig Celular Participações S/A in the amount of R$ 2,664.5 million (R$ 1,233.1 million for the share control, R$ 527.5 million referring to the Voluntary Public Offering and R$ 903.9 million referring to the Mandatory Public Offering), offset by cash generation in the period. Having adhered to the financing of the 3G license, the company managed to keep holding its cash position at a time of market turbulence and also extending its debt profile. The cost of the financing was pursuant to the IST (Telecommunications Industry Index) plus interest of 1% monthly. The payment shall be made in six equal and annual installments, with maturity dates within up to 36, 48, 60, 72, 84 and 96 months counted as from April 29, 2008 (date of execution of the instrument of authorization for use of radiofrequencies). |
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The debt profile has improved. In 4Q07, 56% of the debt was at long term; in 4Q08, 61%. This change in the debt composition has occurred due to increased funding from structured transactions (BNDES and BNB) and use of the credit facility for the 3G license made available at the auction held by Anatel. |
Net Profit of R$ 215.5 million. |
A Net Profit of R$ 215.5 million was recorded in the quarter, pursuant to the corporate law. The operating profit (EBIT) grew 199.5% when compared to the 4Q07, recording R$ 578.6 million in the quarter. In the year-to-date, the net profit was R$ 389.7 million. This result is stated according to the corporate law. |
Capital Market. |
The shares of Vivo Participações were traded in 100% of the trading floor sessions of the São Paulo Stock Exchange and of the New York Stock Exchange in this quarter. The common shares devaluated by 16.8% while the preferred shares recorded a decrease of 9.4%, always in comparison with the last trading day in the quarter. |
Dividends and Interest on Own Capital. |
On December 17, 2008, the Board of Directors of the Company, approved the crediting of interest on own capital, pursuant to article 9 of Law 9.249/95 and Resolution n.º 207/96 of the Brazilian Securities and Exchange Commission, in the total amount of R$ 161,113,275.00 (R$ 0.438528010149 per common and preferred share), with deduction of 15% withholding income tax, resulting in total net interest of R$ 136,946,283.75 (R$ 0.372748808626 per common and preferred share, except for shareholders proven to be tax-immune or exempted). The amount of the interest on own capital, net of the applicable withholding income tax, shall be deducted from the amount of the mandatory dividend and of the statutory dividend of the common and preferred shares, for fiscal year 2008, for all effects provided for in the corporate law. The Management has further proposed the payment of dividends in the amount of R$ 265,685,315.22 (R$ 0.723158613772 per common and preferred share), resulting in a total net amount of Interest on Own Capital plus Dividends of R$ 1.095907422398 per common and preferred share, which shall be confirmed at the General Shareholders Meeting to be held in 2009. |
Shareholding Structure and Capital Stock Composition
Summarized
Shareholding
Structure
CAPITAL STOCK OF VIVO PARTICIPAÇÕES S.A. on Dec 31, 2008 | ||||||
Shareholders | Common Shares |
Preferred Shares |
TOTAL |
|||
Portelcom Participações S.A. | 19,193,624 | 14.3% | 4,206,362 | 1.8% | 23,399,986 | 6.3% |
Brasilcel, N.V. | 55,719,376 | 41.5% | 91,087,513 | 38.9% | 146,806,889 | 39.8% |
Sudestecel Participações LTDA | 22,547,496 | 16.8% | 1,169,552 | 0.5% | 23,717,048 | 6.4% |
Avista Participações LTDA | 2,407,614 | 1.8% | 11,653,452 | 5.0% | 14,061,066 | 3.8% |
TBS Celular Participações LTDA | 17,204,638 | 12.8% | 291,449 | 0.1% | 17,496,087 | 4.7% |
Tagilo Participações LTDA | 3,015,261 | 2.2% | 5,656,432 | 2.4% | 8,671,693 | 2.4% |
Controlling Shareholder Group | 120,088,009 | 89.5% | 114,064,760 | 48.7% | 234,152,769 | 63.5% |
Treasury shares | 0 | 0.0% | 1,123,725 | 0.5% | 1,123,725 | 0.3% |
Others shareholders | 14,062,336 | 10.5% | 119,180,526 | 50.9% | 133,242,862 | 36.2% |
TOTAL | 134,150,345 | 100.0% | 234,369,011 | 100.0% | 368,519,356 | 100.0% |
CONSOLIDATED INCOME STATEMENTS - VIVO | |||||||||
Consolidated | Consolidated | Combined | Combined | ||||||
Accum | |||||||||
R$ million | 4 Q 08 | 3 Q 08 | Δ% | 4 Q 07 | Δ% | 2008 | 2007 | Δ% | |
Gross Revenues | 6,002.9 | 5,750.6 | 4.4% | 5,282.9 | 13.6% | 22,211.7 | 19,576.3 | 13.5% | |
Gross service revenues | 5,055.9 | 4,898.5 | 3.2% | 4,410.5 | 14.6% | 18,925.5 | 16,353.1 | 15.7% | |
Deductions – Taxes and others | (1,267.1) | (1,254.5) | 1.0% | (1,093.6) | 15.9% | (4,755.5) | (4,003.4) | 18.8% | |
Gross handset revenues | 947.0 | 852.1 | 11.1% | 872.4 | 8.6% | 3,286.2 | 3,223.2 | 2.0% | |
Deductions – Taxes and others | (467.5) | (417.9) | 11.9% | (445.0) | 5.1% | (1,637.1) | (1,719.4) | -4.8% | |
Net Revenues | 4,268.3 | 4,078.2 | 4.7% | 3,744.3 | 14.0% | 15,819.1 | 13,853.5 | 14.2% | |
Net service revenues | 3,788.8 | 3,644.0 | 4.0% | 3,316.9 | 14.2% | 14,170.0 | 12,349.7 | 14.7% | |
Access and Usage | 1,804.2 | 1,653.9 | 9.1% | 1,535.8 | 17.5% | 6,494.0 | 5,713.9 | 13.7% | |
Network usage | 1,562.5 | 1,568.6 | -0.4% | 1,440.4 | 8.5% | 6,039.7 | 5,503.8 | 9.7% | |
Data Revenues plus VAS | 379.4 | 364.5 | 4.1% | 314.2 | 20.8% | 1,438.9 | 1,041.7 | 38.1% | |
Other services | 42.7 | 57.0 | -25.1% | 26.5 | 61.1% | 197.4 | 90.3 | 118.6% | |
Net handset revenues | 479.5 | 434.2 | 10.4% | 427.4 | 12.2% | 1,649.1 | 1,503.8 | 9.7% | |
Operating Costs | (2,872.0) | (2,753.9) | 4.3% | (2,765.4) | 3.9% | (10,951.6) | (10,307.1) | 6.3% | |
Personnel | (205.9) | (194.8) | 5.7% | (221.0) | -6.8% | (795.0) | (810.1) | -1.9% | |
Cost of services rendered | (1,062.4) | (998.9) | 6.4% | (900.4) | 18.0% | (4,025.2) | (3,450.7) | 16.6% | |
Leased lines | (87.1) | (72.2) | 20.6% | (69.2) | 25.9% | (286.8) | (274.6) | 4.4% | |
Interconnection | (571.9) | (571.4) | 0.1% | (509.5) | 12.2% | (2,208.5) | (1,828.0) | 20.8% | |
Rent/Insurance/Condominium fees | (85.4) | (73.7) | 15.9% | (54.9) | 55.6% | (291.4) | (244.1) | 19.4% | |
Fistel and other taxes and contributions | (177.7) | (169.0) | 5.1% | (146.0) | 21.7% | (670.7) | (554.4) | 21.0% | |
Third-party services | (136.1) | (124.7) | 9.1% | (116.7) | 16.6% | (534.7) | (476.3) | 12.3% | |
Others | (4.2) | 12.1 | n.a. | (4.1) | 2.4% | (33.1) | (73.3) | -54.8% | |
Cost of handsets | (720.6) | (615.0) | 17.2% | (672.1) | 7.2% | (2,473.3) | (2,236.4) | 10.6% | |
Selling expenses | (842.0) | (814.1) | 3.4% | (829.2) | 1.5% | (3,300.4) | (3,000.9) | 10.0% | |
Provision for bad debt | (59.5) | (71.8) | -17.1% | (82.9) | -28.2% | (312.1) | (390.5) | -20.1% | |
Third-party services | (640.0) | (601.4) | 6.4% | (603.2) | 6.1% | (2,390.9) | (2,090.1) | 14.4% | |
Costumer loyalty and donations | (97.7) | (103.6) | -5.7% | (99.6) | -1.9% | (438.2) | (368.0) | 19.1% | |
Others | (44.8) | (37.3) | 20.1% | (43.5) | 3.0% | (159.2) | (152.3) | 4.5% | |
General & administrative expenses | (76.4) | (160.6) | -52.4% | (183.2) | -58.3% | (600.8) | (701.6) | -14.4% | |
Third-party services | (47.3) | (133.5) | -64.6% | (154.2) | -69.3% | (492.0) | (589.5) | -16.5% | |
Others | (29.1) | (27.1) | 7.4% | (29.0) | 0.3% | (108.8) | (112.1) | -2.9% | |
Other operating revenue (expenses) | 35.3 | 29.5 | 19.7% | 40.5 | -12.8% | 243.1 | (107.4) | n.a. | |
Operating revenue | 130.1 | 92.6 | 40.5% | 120.8 | 7.7% | 620.7 | 350.9 | 76.9% | |
Operating expenses | (97.6) | (69.7) | 40.0% | (73.4) | 33.0% | (414.0) | (461.4) | -10.3% | |
Other operating revenue (expenses) | 2.8 | 6.6 | -57.6% | (6.9) | n.a. | 36.4 | 3.1 | 1074.2% | |
EBITDA | 1,396.3 | 1,324.3 | 5.4% | 978.9 | 42.6% | 4,867.5 | 3,546.4 | 37.3% | |
Margin % | 32.7% | 32.5% | 0.2 p.p. | 26.1% | 6.6 p.p. | 30.8% | 25.6% | 5.2 p.p. | |
Depreciation and Amortization | (817.7) | (766.9) | 6.6% | (785.7) | 4.1% | (3,030.5) | (2,703.7) | 12.1% | |
EBIT | 578.6 | 557.4 | 3.8% | 193.2 | 199.5% | 1,837.0 | 842.7 | 118.0% | |
Net Financial Income | (282.8) | (192.1) | 47.2% | (102.9) | 174.8% | (619.8) | (426.2) | 45.4% | |
Financial Revenues | 65.2 | 96.6 | -32.5% | 56.3 | 15.8% | 330.3 | 260.7 | 26.7% | |
Other financial revenues | 90.5 | 96.6 | -6.3% | 83.9 | 7.9% | 371.8 | 288.3 | 29.0% | |
(-) Pis/Cofins taxes on financial revenues | (25.3) | 0.0 | n.a. | (27.6) | -8.3% | (41.5) | (27.6) | 50.4% | |
Financial Expenses | (312.7) | (240.2) | 30.2% | (165.9) | 88.5% | (871.0) | (699.9) | 24.4% | |
Other financial expenses | (236.4) | (140.5) | 68.3% | (123.6) | 91.3% | (547.3) | (463.7) | 18.0% | |
Gains (Losses) with derivatives transactions | (76.3) | (99.7) | -23.5% | (42.3) | 80.4% | (323.7) | (236.2) | 37.0% | |
Exchange rate variation / Monetary variation | (35.3) | (48.5) | -27.2% | 6.7 | n.a. | (79.1) | 13.0 | n.a. | |
Taxes | (67.3) | (210.4) | -68.0% | (38.6) | 74.4% | (574.2) | (338.3) | 69.7% | |
Changes in shareholders´ Equity that do not affect income | 0.0 | 0.0 | n.a. | 0.0 | n.a. | 0.0 | 1.0 | n.a. | |
Minority Interest | (13.0) | (21.0) | -38.1% | 0.0 | n.a. | 0.0 | 0.0 | n.a. | |
Net Income | 215.5 | 133.9 | 60.9% | n.a | n.a. | n.a | n.a | n.a. | |
Net Income Consolidated | 215.5 | 133.9 | 60.9% | 26.2 | 722.5% | 389.7 | (99.8) | n.a. |
CONSOLIDATED BALANCE SHEET - VIVO | ||||
R$ million | Consolidated | Combined | ||
ASSETS | Dec 30. 08 | Dec 30. 07 | Δ% | |
Current Assets | 8,927.3 | 8,140.3 | 9.7% | |
Cash and equivalents cash | 2,182.9 | 2,921.6 | -25.3% | |
Temporary cash investments (collateral) | 41.5 | 32.4 | 28.1% | |
Net accounts receivable | 2,578.5 | 2,411.7 | 6.9% | |
Inventory | 778.7 | 411.9 | 89.1% | |
Prepayment to Suppliers | 1.6 | 1.2 | 33.3% | |
Deferred and recoverable taxes | 2,358.7 | 1,920.1 | 22.8% | |
Derivatives transactions | 347.4 | 1.5 | n.a | |
Prepaid Expenses | 316.6 | 235.7 | 34.3% | |
Other current assets | 321.4 | 204.2 | 57.4% | |
Non- Current Assets | 14,857.8 | 12,426.0 | 19.6% | |
Long Term Assets: | ||||
Temporary cash investments (as collateral) | 47.3 | 27.1 | 74.5% | |
Deferred and recoverable taxes | 2,720.3 | 2,695.7 | 0.9% | |
Derivatives transactions | 285.3 | 9.0 | 3070.0% | |
Prepaid Expenses | 80.2 | 61.1 | 31.3% | |
Other long term assets | 46.3 | 59.9 | -22.7% | |
Investment | 1,424.4 | 667.5 | 113.4% | |
Plant, property and equipment | 7,183.9 | 7,047.4 | 1.9% | |
Net intangible assets | 3,014.7 | 1,799.5 | 67.5% | |
Deferred assets | 55.4 | 58.8 | -5.8% | |
Total Assets | 23,785.1 | 20,566.3 | 15.7% | |
LIABILITIES | ||||
Current Liabilities | 9,379.8 | 7,684.5 | 22.1% | |
Personnel, tax and benefits | 185.5 | 208.3 | -10.9% | |
Suppliers and Consignment | 3,726.3 | 3,453.3 | 7.9% | |
Taxes, fees and contributions | 785.6 | 711.6 | 10.4% | |
Loans and financing | 3,098.3 | 1,459.6 | 112.3% | |
Debentures | 21.5 | 539.9 | -96.0% | |
Interest on own capital and dividends | 545.9 | 81.6 | 569.0% | |
Contingencies provision | 91.1 | 81.4 | 11.9% | |
Derivatives transactions | 105.4 | 438.9 | -76.0% | |
Licence Concession | 0.0 | 5.6 | n.a | |
Other current liabilities | 820.2 | 704.3 | 16.5% | |
Non-Current Liabilities | 5,550.0 | 3,186.6 | 74.2% | |
Long Term Liabilities: | ||||
Taxes, fees and contributions | 263.6 | 193.9 | 35.9% | |
Loans and financing | 3,826.4 | 1,533.6 | 149.5% | |
Debentures | 1,056.9 | 1,006.2 | 5.0% | |
Contingencies provision | 102.9 | 126.6 | -18.7% | |
Derivatives transactions | 98.0 | 102.3 | -4.2% | |
Licence Concession | 0.0 | 70.0 | -100.0% | |
Other long term liabilities | 202.2 | 154.0 | 31.3% | |
Minority interest | 587.8 | 177.6 | 231.0% | |
Shareholder's Equity | 8,267.5 | 9,517.6 | -13.1% | |
Total Liabilities and Shareholder's Equity | 23,785.1 | 20,566.3 | 15.7% |
CONFERENCE CALL – 4Q08
In English
Date: February 13, 2009 (Friday)
Time: 11:00 a.m. (Brasília time) and 08:00 a.m. (New York time)
Telephone number: (+1 412) 858-4600
Conference Call Code: VIVO
Webcast: www.vivo.com.br/ir
The conference call audio replay will be available at telephone number (+1 412) 317-0088
code: 426805#1 or in our website
VIVO – Investor Relations |
Ernesto Gardelliano
|
Av Chucri Zaidan, 860 – Morumbi – SP – 04583-110
Telephone: +55 11 7420-1172 e-mail: ir@vivo.com.br Information available in the website: http://www.vivo.com.br/ir |
This press release contains forecasts of future events. Such statements are not statements of historical fact, and merely reflect the expectations of the company's management. The terms "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects", "aims" and similar terms are intended to identify these statements, which obviously involve risks or uncertainties which may or may not be foreseen by the company. Accordingly, the future results of operations of the Company may differ from its current expectations, and the reader should not rely exclusively on the positions taken herein. These forecasts speak only of the date they are made, and the company does not undertake any obligation to update them in light of new information or future developments. |
GLOSSARY |
Financial Terms: CAPEX – Capital Expenditure. Technology and Services 1xRTT – (1x Radio Transmission Technology) – It is the CDMA 2000 1x technology which, pursuant to the ITU (International Telecommunication Union). and in accordance with the IMT-2000 rules is considered 3G (third generation) Technology. |
Operating indicators: Gross additions – Total of customers acquired in the period.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 17, 2009
VIVO PARTICIPAÇÕES S.A. |
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By: |
/S/ Ernesto Gardelliano
|
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Ernesto Gardelliano
Investor Relations Officer |
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.