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SAO PAULO, May 13 (Reuters) - Brazilian phone company Telefonica Brasil SA reported a 12 percent drop in first-quarter profit from a year earlier due to stagnant revenue and rising financial expenses.
Net income fell to 580 million reais ($191 million), according to a securities filing on Wednesday.
Few analysts had given forecasts for the company’s earnings. To prevent conflicts of interest, several bank analysts suspended coverage as their companies were hired for a share offering to fund Telefonica Brasil’s acquisition of broadband provider GVT.
A sharp slowdown in Brazil continued to weigh on earnings, as mobile revenue rose 8 percent, in line with consumer prices over the past year, but fixed-line services fell 4 percent due to disconnected landlines and flat broadband subscriptions.
The Brazilian unit of Spain’s Telefonica said earnings before interest, taxes, depreciation and amortization was little changed from a year earlier at 2.569 billion reais.
Rising interest rates and a sharp tumble in Brazil’s currency, the real, more than doubled net financial expenses to 218 million reais.
$1 = 3.04 reais Reporting by Brad Haynes; Editing by Chizu Nomiyama and W Simon