UPDATE 1-Brazil's Oi to sell assets to repay debt, bolster profit

miércoles 19 de febrero de 2014 11:44 GYT
 

(Adds executive and analyst comments, details about asset sale, earnings, share price)

SAO PAULO Feb 19 (Reuters) - Grupo Oi SA, Brazil's most indebted telecom company, plans to sell more assets to pay down debts, Chief Executive Zeinal Bava said, after the recent disposal of underwater fiber optic cables bolstered its fourth-quarter profit.

The sale helped Oi almost triple profit from a year earlier to 1.183 billion reais ($494 million), the company said on Wednesday. Without the deal, Oi would have posted a net loss due to the flagging performance of its mobile phone unit and ongoing disconnections of fixed-line subscribers.

"We are going to continue looking to sell more assets. Everything we consider non-core we're going to sell," Bava told analysts on a conference call. "Any cash from asset sales will be used to pay debts or create financial flexibility."

Oi is one of many companies in Brazil, from sugar producers to food processors, that are streamlining operations to bolster returns as the economy turns sour. Sliding consumer confidence and tougher competition have weighed especially on the country's phone companies.

"We remain cautious on Oi," wrote J.P.Morgan Securities analysts led by Andre Baggio in a note Wednesday. By selling off business units, Oi has sacrificed about 650 million reais of operating profit next year, the analysts said.

Shares of Oi were little changed on Sao Paulo's stock exchange, edging up 0.2 percent to 4.31 reais.

DODGING ANOTHER LOSS   Continuación...