May 12, 2016 / 11:07 AM / 2 years ago

Brazilian telecoms group Oi reports bigger than expected loss

BRASILIA, May 12 (Reuters) - Brazilian telecoms group Oi SA reported a net loss on Thursday due to competitive pressures against the backdrop of the country’s economic downturn, plus the cost of a big debt burden that the company is trying to restructure.

Oi reported a first-quarter loss of 1.644 billion reais ($475.86 million) more than a loss of 447 million reais a year earlier and a bigger loss than the average forecast for a 688 million reais loss in a Reuters survey of analysts.

Revenue fell 4 percent as Brazil’s worst recession in decades squeezed consumer spending on communications services, especially on prepaid plans that make up around four fifths of Oi’s mobile customer base.

Oi has been working for over a year to streamline its business to restore profitability, cutting over 1,000 workers early last year and another 2,000 workers this week, according to a source familiar with the matter.

First-quarter earnings before interest, taxes, depreciation and amortization fell 12.2 percent to 1.766 billion reais, in line with an average estimate of 1.780 billion reais.

Last month, Oi started talks with investors represented by Moelis & Co to restructure $14.3 billion of bonds.

Shareholders see a restructuring opening the way for a potential takeover of Oi, which they say could help to narrow the gap with rivals controlled by Spain’s Telefónica SA , Telecom Italia SpA and Mexican billionaire Carlos Slim’s América Móvil SAB.

$1 = 3.4464 Brazilian reais Reporting by Silvio Cascione. Editing by Jane Merriman

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