(Recasts with investment plans, details of results)
SAO PAULO, Feb 24 (Reuters) - Telefonica Brasil SA plans to increase investments this year in line with inflation, keeping a lid on spending as a severe recession in Latin America’s largest economy hurts sales.
The Brazilian unit of Spain’s Telefonica SA projected 8.907 billion reais ($2.25 billion) of investments in 2016, up 7.1 percent from last year.
Consumer prices are expected to rise 7.6 percent this year, according to the median forecast of a weekly central bank survey of economists.
Telefonica Brasil laid out its investment plans in an earnings report that showed a fourth-quarter net profit of 1.115 billion reais ($282 million), down 11 percent from a year earlier, due to weak sales growth and rising costs.
Net operating revenue rose just 3.4 percent from a year earlier.
Layoffs helped to bring personnel costs down by 14 percent, but spending on third-party services and a jump in energy costs drove general and administrative expenses 46 percent higher.
Earnings before interest, taxes, depreciation and amortization rose 6 percent to 3.432 billion reais.
$1 = 3.96 Brazilian reais Reporting by Brad Haynes; Editing by James Dalgleish and Andrew Hay