UPDATE 1-Brazil's Oi aims to lift EBITDA to over $2.6 bln in 2015

lunes 5 de enero de 2015 08:32 GYT
 

(Adds forecast figures, company background)

SAO PAULO Jan 5 (Reuters) - Oi SA, Brazil's most indebted telecom, forecasts a rise in operating profit in 2015 in addition to a one-time cash boost from asset sales, as it shores up its position in negotiations over a possible merger.

Oi projected recurring earnings before interest, taxes, depreciation and amortization between 7 billion and 7.4 billion reais ($2.6 billion - $2.7 billion) in Brazil, according to a securities filing on Monday.

The target known as recurring EBITDA, setting aside cash from asset sales and other one-time effects, suggests a rise of about 7 percent or more from 2014.

From January to September last year, Oi's recurring EBITDA in Brazil totaled 4.9 billion reais, down about 6 percent from a year earlier as net sales declined.

Oi disclosed preliminary earnings in mid-December to show what it called an "inflection point" in operations. The company reported an average recurring EBITDA per month of 544 million reais in October and November.

Stronger earnings will be key for Oi to manage its hefty gross debt, which soared 52 percent in a year to 51.6 billion reais at the end of September. The company's net debt, including cash on hand, was 47.8 billion reais.

Oi shares fell about 3 percent in early Sao Paulo trading, more than a nearly 2 percent drop in the the benchmark Bovespa stock index.

Oi plans to conclude the sale of its Portuguese assets in the first half of 2015 and sell its African assets in the second half, Chief Executive Bayard Gontijo told Reuters in December. The Portuguese deal alone is valued at around 7.4 billion euros ($8.8 billion).

Oi has engaged in talks with Spain's Telefonica SA and Mexico's America Movil SAB to buy and split up rival Brazil wireless carrier TIM Participações SA.

TIM's parent company, Telecom Italia SpA, is also eyeing a takeover of Oi, according to sources familiar with the matter. ($1 = 2.72 reais) ($1 = 0.84 euros) (Reporting by Marcela Ayres and Brad Haynes Editing by W Simon)