Tele Norte Leste Participacoes SA (TNE) posted modest results for the third quarter of 2009. During the quarter, consolidated gross revenue amounted to R$11.6 billion, 3.6% higher than in 2008’s third quarter mainly due to the performance of mobile telephone services, which increased by 15% year-over-year. Increasing revenue from data and value-added services proved by the growth in the number of 3G clients.
Wireline revenue grew slightly benefiting from the performance of data transmission service and advanced voice service and additional service. However, in comparison with the previous quarter, almost all of the revenue items recorded an improvement.
Net income tumbled 71% in the quarter from the year-earlier period on costs related to asset write-downs and the combination of its two parent companies. Net income fell to R$64 million ($37 million) in the three months from R$222 million for the same period a year earlier.
The consolidate recovery of EBITDA amounted to R$2.6 billion accompanied by recovering margin of 35.1% which was a 110 basis points above the same during last year’s period.
Nonrecurring charges of R$290 million in the third quarter pushed sales, general and administrative costs up 4% over the same period of 2008. Total costs were R$4.98 billion.
As the result of most in schedule total debt fell by a little more than R$1 billion closing the third quarter at R$28.5 billion. Net debt in turn fell by around R$500 million representing 2.1 times adjusted EBITDA in the last 12 months. However, we believe that the competition in Brazil’s wireless phone market will remain fierce for the rest of 2009 and in 2010.
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