Telefonica Brasil SA ((VIV)) has held its Q4 earnings call. Read on for the main highlights of the call.
Telefonica Brasil SA, operating under the brand Vivo, showcased a robust performance in its latest earnings call, marked by strong growth in its mobile and fiber segments. The company also highlighted increased shareholder remuneration and significant ESG achievements. However, challenges such as prepaid revenue softness, fixed voice migration costs, and rising operating expenses were also noted, reflecting a mixed sentiment during the call.
Strong Mobile and Fiber Growth
Vivo reported impressive growth in its mobile and fiber segments, reaching 66.5 million postpaid accesses in 2024, a 7.6% increase. The number of homes connected to fiber grew by 12.7%, totaling 7 million accesses. This expansion contributed to Vivo achieving the largest customer base in its history, with over 116 million accesses.
Revenue and EBITDA Growth
The company experienced a 7.7% increase in total revenues in the fourth quarter, with mobile revenues up by 7% and fixed revenues by 8%. This growth in revenue was mirrored by a 7.8% year-over-year increase in EBITDA, underscoring Vivo’s strong financial performance.
Shareholder Remuneration and Cash Flow
Vivo demonstrated its commitment to shareholder value by distributing over BRL 5.8 billion, a 22% increase year-over-year, representing 105% of net income. The operating cash flow also grew by 11% year-over-year to BRL 13.7 billion, accounting for 24.6% of total revenues.
ESG Accomplishments
Vivo’s commitment to sustainability was recognized as it joined the Dow Jones Best-in-Class World Index, the only Brazilian telecom company on the list. The Vivo Recicle program also set a new record by collecting 37 tonnes, tripling last year’s amount.
Prepaid Revenue Challenges
The prepaid segment faced challenges in Q4, with softer performance due to a shift towards hybrid plans and the lack of new price increases, which impacted prepaid revenue growth.
Fixed Voice Migration Costs
The migration of fixed voice services posed significant operational and capital expenditure challenges, with negative free cash flow from copper-based services affecting overall profitability.
Rising Operating Expenses
Operating expenses increased by 7.7% year-over-year, driven by higher commercial and infrastructure costs associated with the fixed voice migration and heightened commercial activity.
Forward-Looking Guidance
Vivo’s forward-looking guidance reflects continued optimism, with expectations of sustained growth in postpaid access and fiber connections. The company aims to maintain its revenue and EBITDA growth trajectory, supported by strategic investments and shareholder remuneration aligned with its guidance for the coming years.
In summary, Telefonica Brasil SA’s earnings call highlighted a strong performance in key growth areas, despite facing some operational challenges. The company’s commitment to shareholder returns and sustainability initiatives further underscores its strategic priorities moving forward.