Telefonica Brasil SA , the biggest telecommunications company in the country, raised its forecast for savings from a major merger, although one-time personnel costs from the restructuring triggered a 23 percent drop in quarterly profit.
Second-quarter net income fell to 699.5 million reais ($213.7 million) from 911.3 million reais a year earlier, missing an average forecast of 924 million reais in a Reuters poll of analysts.
The Brazilian unit of Telefonica SA has worked to integrate broadband unit GVT since it was acquired from France’s Vivendi SA, leading to layoff costs and other one-time expenses. Personnel costs jumped 18 percent from a year ago due to the restructuring provision of 101 million reais.
The company also revised the net present value of the synergies deriving from the merger to 25 billion reais, 13 percent above the company’s most optimistic forecast when it announced the merger, according to the filing.
A capital increase to fund that takeover also boosted cash in the second quarter of last year, leading to twice as much income from financial investments compared with this year’s period.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 4 percent to 3.200 billion reais, below an average estimate of 3.3 billion reais. ($1 = 3.27 Brazilian reais) (Reporting by Ana Mano; Editing by Brad Haynes and Matthew Lewis)
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Source: Reuters.com
