Contacts:

      Tele Nordeste Celular Participações S.A.
      Walmir Urbano Kesseli
      55.81.3216.2591
      Fabíola ...
during the first quarter of 2001 and 11.1% during the second quarter of 2000. Accumulated for
      the year the bad debt ...
revenue, roughly 13.3%, provoked by the increase of the special plans in our clients base,
      which offer lower tariffs...
Selected Consolidated Financial Data (in thousands of Reais)
                                                             ...
2º Qtr.   1º Qtr.   2º Qtr.   2001        2000
      Operating Expenses
       - Selling                                  ...
Interest on Own Capital – JSCP
                                               0.0231          0.0231        0.0196        ...
totally converted to Reais with pre-fixed costs, in line with the Company’s policy of minimizing
      exposure to foreign...
Consolidated Statistics
                                                                     nd               st          ...
Balance Sheet

At June 30, 2001 and June 30, 2000
(In Thousands of Reais)

                                               ...
Balance Sheet

At June 30, 2001 and June 30, 2000
(In Thousands of Reais)


                                              ...
Statement of Income

     For the quarters and semesters ended June 30,2001 and June 30,2000
     (In Thousands of Reais)
...
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Press Release 2 Q01 Tele Nordeste Celular En

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Press Release 2 Q01 Tele Nordeste Celular En

  1. 1. Contacts: Tele Nordeste Celular Participações S.A. Walmir Urbano Kesseli 55.81.3216.2591 Fabíola Almeida 55.81.3216.2594 fabiola.almeida@timnordeste.com.br Polyana Maciel 55.81.3216.2593 polyana.maciel@timnordeste.com.br TELE NORDESTE CELULAR PARTICIPAÇÕES S.A. ANNOUNCES SECOND QUARTER 2001 RESULTS Recife, Brazil (August 6, 2001) – Tele Nordeste Celular Participações S.A. (NYSE: TND, BOVESPA: TNEP3, TNEP4) (“Tele Nordeste Celular” or “the Company”), the holding company controlling the operating companies serving Band A cellular telecommunication clients in the states of Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco and Alagoas, under the TIM brand name, announced today its results for the second quarter of 2001 in accordance with Brazilian GAAP. ! 65% of market share at the end of June 2001; ! 37.6% of EBITDA margin in the quarter, reaching R$75.8 million; ! Reduction of 13.3% at the bad debt expenses quarter over quarter. Operational Highlights Commercial activities during the second quarter of 2001 resulted in the consolidated gross addition of 136,680 clients (of which 93,660, or 68.5%, were prepaid). Consolidated net additions during the second quarter of 2001 totaled 68,215 clients (of which 65,784, or 96.4%, were prepaid), as a result of the disconnection of 10,000 clients from the post-paid system because of bad debt. The purpose of those disconnection was to clean the clients base, as a way to reduce and control the bad debt. Excluding those disconnection, the consolidated net additions for the second quarter of 2001 was 78,215 clients. Together, Tele Nordeste Celular’s operating companies, had a total of 1,624,834 clients on June 30, 2001, of which 819,034 (50.4%) were post-paid clients and 805,800 (49.6%) were prepaid clients. The market share at the end of the second quarter of 2001 was estimated at 65%. The subscriber acquisition cost was R$143 in the second quarter of 2001, compared to R$100 during the first quarter of 2001 and R$132 during the second quarter of 2000. Accumulated for the year, the subscriber acquisition cost was R$119, compared to R$151, during the same period of 2000. As a result of the intensification of the collections and billing activities and the adoption of rigorous collections procedures and polices, the bad debt levels are showing an improvement. During the second quarter of 2001, the bad debt was 4.2% of gross revenue, against 4.8% www.timnordeste.com.br 1
  2. 2. during the first quarter of 2001 and 11.1% during the second quarter of 2000. Accumulated for the year the bad debt was 4.5% over the gross revenue, compared to 9.1% during the same period of 2000. During the second quarter, there were two strong campaigns: Mother’s Day (with the sale of subsidized handsets only for the post-paid clients, always linked to one of our special plans, where the client remains at least one year with our plant) and the Valentines’ Day (with the launching of the Timmy Duet, where a prepaid client chooses another client and starts to have a special tariff when calling the chosen number and vice-versa. Timmy Duet is one more initiative of the Company with the intention of developing the traffic in the prepaid system). Financial Highlights Tele Nordeste Celular’s consolidated net income for the second quarter of 2001, was R$ 12.9 million, or R$0.04 per 1,000 shares, against to R$10.1 million during the first quarter of 2001, and R$916 thousands during the second quarter of 2000. Accumulated consolidated net income for the year 2001 was R$23.0 million, compared to R$12.1 million, during the same period of 2000. For the second quarter of 2001, Tele Nordeste Celular reported consolidated EBITDA e EBIT of R$75.8 million and R$32.4 million, respectively, representing an EBITDA margin of 37.6% and an EBIT margin of 16.1% over the consolidated net revenue, compared to EBITDA of R$79.2 million and EBIT of R$36.9 million, representing an EBITDA margin of 39.2% and EBIT margin of 18.3% over the consolidated net revenue reported for the first quarter of 2001, and compared to EBITDA of R$52.9 million e EBIT of R$21.4 million, representing an EBITDA margin of 25.1% and an EBIT margin of 10.2% over the consolidated net revenue reported for the second quarter of 2000. Accumulated for the year 2001, consolidated EBITDA and EBIT were R$155.1 million and R$69.4 million, respectively, representing an EBITDA margin of 38.4% and an EBIT margin of 17.2% over the consolidated net revenue, compared to a consolidated EBITDA and EBIT of R$126.2 million and R$ 68.7 million, respectively, representing an EBITDA margin of 29.7% and an EBIT margin of 16.2%, during the same period of 2000. EBITDA (in US$000) 100 80 60 40 20 00 1Q/00 2Q/00 3Q/00 4Q/00 1Q/01 2Q/01 Consolidated net operating revenue for the second quarter of 2001 reached R$201.8 million, against to R$202.3 million during the first quarter of 2001, and R$210.8 million during the second quarter of 2000. Accumulated for the year, consolidated net operating revenue reached R$404.2 million, against to R$425.3 million during the same period of 2000. Consolidated net operating revenue during the second quarter of 2001 decreased 0.2% when compared to the first quarter of 2001. This reduction was due to a lower usage changes www.timnordeste.com.br 2
  3. 3. revenue, roughly 13.3%, provoked by the increase of the special plans in our clients base, which offer lower tariffs for the post-paid clients which option for these kind of plans and signed a contract with us with the commitment to stay in our plant for a minimum period of 12 months. These special plans are part of a program to fidelity the clients adopted by the Tele Nordeste Celular’s operating companies. Another important factor was the reduction on handsets sales, of roughly 34.5%, caused by the outsourcing of the distribution of the handsets to the Dealers, nowadays the Tele Nordeste Celular’s operating companies sell handsets only in their own stories. Considering only the telecom services revenue there was an increase of 0.5% compared to the first quarter of 2001, provoked by the increase of 18.0% in the interconnection revenue. When compared to the second quarter of 2000, consolidated net operating revenue decreased 4.3%. This reduction was mainly due to the lower volume of handset sales, of roughly 74.2%. Excluding the handsets sales, the telecom services revenue grew 7.3%. Accumulated for the year, consolidated net operating revenue reached R$404,0 million, representing a decrease of 5.0%, when compared to the same period of 2000. Net Operating Revenue (in US$000) 220 215 210 205 200 195 190 1Q/00 2Q/00 3Q/00 4Q/00 1Q/01 2Q/01 www.timnordeste.com.br 3
  4. 4. Selected Consolidated Financial Data (in thousands of Reais) st 2001 2000 1 Semester 2º Qtr. 1º Qtr. 2º Qtr. 2001 2000 Revenue - Usage charges 98,449 113,530 120,184 211,979 256,029 - Monthly subscription payments 43,801 42,733 38,523 86,534 90,716 - Network usage charges 100,329 84,993 66,597 185,322 128,109 - Sale of handsets 9,946 15,191 38,550 25,137 69,924 - Other 960 1,113 1,657 2,073 (51) Subtotal 253,485 257,560 265,511 511,045 544,727 - Value added and other indirect taxes (51,730) (55,300) (54,718) (107,030) (119,457) Net Operating Revenue 201,755 202,260 210,793 404,015 425,270 Cost of services and of goods sold - Depreciation e amortization (31,202) (29,973) (27,368) (61,175) (51,725) - Personnel (2,521) (2,481) (1,315) (5,002) (4,059) - Materials and services (106) (137) (92) (243) (204) - Circuit leasing and related expenses (7,166) (8,849) (8,631) (16,015) (16,619) - Leases and insurance (3,377) (2,938) (2,246) (6,315) (4,466) - Cellular handset costs (11,088) (12,545) (36,793) (23,633) (68,512) - Fistel (242) (182) (293) (424) (400) - Plant support and maintenance (1,724) (1,761) (95) (3,485) (250) - Network usage charges (27,313) (27,559) (24,022) (54,872) (50,152) - Other (1,620) (2,114) (1,497) (3,734) (2,958) Subtotal (86,359) (88,539) (102,352) (174,898) (199,345) Gross Profit 115,396 113,721 108,441 229,117 225,925 Consolidated gross profit for the second quarter of 2001 reached R$115.4 million, representing an increase of 1.5% when compared to the first quarter 2001 and an increase of 6.4% when compared to the second quarter of 2000. These growth were due to a reduction in the cost of handsets sales, provoked by the outsourcing of distribution of handsets to the Dealers. Accumulated for the year 2001, consolidated gross profit reached R$229.1, representing a growth of 1.4%, when compared to the same period of 2000. Gross Profit (in US$000) 150 100 50 00 1Q/00 2Q/00 3Q/00 4Q/00 1Q/01 2Q/01 Selected Consolidated Financial Data (in thousands of Reais) st 2001 2000 1 Semester www.timnordeste.com.br 4
  5. 5. 2º Qtr. 1º Qtr. 2º Qtr. 2001 2000 Operating Expenses - Selling 54,820 48,110 56,866 102,930 109,333 - General and administrative 23,179 24,774 24,222 47,953 42,469 - Other operating expenses, net 4,971 3,897 5,999 8,868 5,391 Subtotal 82,970 76,781 87,087 159,751 157,193 - Net financing expenses 10,329 17,114 22,363 27,443 43,336 Total 93,299 93,895 109,450 187,194 200,529 Consolidated net operating expenses decreased 0.6% compared to the first quarter of 2001, and 14.8% when compared to the second quarter of 2000. The reduction when compared to the first quarter of 2001 was mainly due to lower financial expenses, while the reduction when compared to the second quarter of 2000 was due to lower selling expenses (mainly bad debt) and lower financial expenses. Accumulated for the year 2001, consolidated net operating expenses reached R$187.2 million, representing a reduction of 6.6%, when compared to the same period of 2000. Consolidated bad debt expenses during the second quarter of 2001 reached R$10.7 million, representing 4.2% over the gross revenue and showing a reduction of 13.3% (from R$12.3 million to R$10.7 million) when compared to the first quarter of 2001, and a reduction of 63.9% when compared to the second quarter of 2000. Accumulated for the year 2001, consolidated bad debt expenses reached R$23.0 million, representing 4.5% over the gross revenue, that means a reduction of 53.8% when compared to the same period of 2000. Net Operating Expenses (in US$000) 150 100 50 00 1Q/00 2Q/00 3Q/00 4Q/00 1Q/01 2Q/01 Payment of Dividends and Interest on Shareholders’ Equity Following the instructions of the Ordinary General Shareholders’ Meeting of April 30, 2001, the Company stated at July 2nd, 2001 the payment of Interest on Shareholders’ Equity and Dividends for the fiscal year ended December 31. 2000, in a total amount of R$10.3 million, of this, R$1.2 million were income taxes. The table below shows the amount per a lot of 1,000 shares, adjusted by the “Taxa Referencial – TR – a local interest rate, since the distribution date (12/31/2000) until the payment date (07/02/2001): Event Net Amount (In Reais) Tax Immune/Exempt Taxed Common Preferred Common Preferred www.timnordeste.com.br 5
  6. 6. Interest on Own Capital – JSCP 0.0231 0.0231 0.0196 0.0196 Dividends 0.0079 0.0079 0.0079 0.0079 Amortization of Goodwill On June 30, 2000 Tele Nordeste Celular and its operating companies completed a restructuring that resulted in the transfer of the premium paid during the privatization process from Bitel Participações S.A., the parent company of Tele Nordeste Celular, to each one of the operating companies. This restructuring is aimed at taking advantage of a fiscal benefit estimated at R$200 million over 8 years, through to 2008, which will be incorporated into their share capital by the operating companies, with significant financial benefits for them. A proposal for the merger of the operating companies is awaiting Anatel approval. During the second quarter of 2001 the consolidated amortization of the premium, net of reversal of the provision for the integrity of shareholder’s equity, was R$6.3 million, generating a fiscal benefit on the order of R$5.4 million. Accumulated for the year 2001, the consolidated amortization of the premium, net of reversal of the provision for the integrity of shareholders’ equity, was R$12.6 million, generating a fiscal benefit on the order of R$11.6 million. Capitalization of the Fiscal Benefit and Rerained Profits The Extraordinary General Shareholders Meeting of June 22, 2001 ratified the Company’s capital increase of R$11.0 million, equivalent to the fiscal benefit generated during the year 2000 and the Company’s capital increase in the amount of R$66.2 million, equivalent to a part of the retained profits, in order to comply with Brazilian laws, regarding the limit of the profits reserves in relation to the capital. After the ratification, the Company’ social capital reached R$186,053,906.53. ARPU The blended average revenue per user (ARPU), net of taxes, for the second quarter of 2001 was R$41.42 per month, compared to R$41.83 per month in the first quarter of 2001, and R$45.63 per month for the second quarter of 2000. These reductions when compared to the first quarter of 2001 and the second quarter of 2000, were due to the increase of prepaid clients at out plan. In 2001 blocking is carried out on a partial basis, and as a result, only incoming traffic revenues are generated by these clients. On June 30, the clients base was 49.6% prepaid and 50.4% postpaid. Competition (not revised) The Company estimates that its market share at the end of the second quarter of 2001 was approximately 65% in terms of number of accesses. The penetration rate in the region at the end of June 2001 was estimated at 9.0%, against roughly 16.3% Brazilian average (23 million lines). Debt Profile Consolidated debt at June 30, 2001, was R$373.2 million, with R$34.2 million maturing in the short-term. The debt in foreign currency totaled R$172.0 million, of this R$169.8 million was www.timnordeste.com.br 6
  7. 7. totally converted to Reais with pre-fixed costs, in line with the Company’s policy of minimizing exposure to foreign currency risks and interest rate fluctuations. Capital Expenditures During the second quarter of 2001, the company invested R$26.6 million. The investments were directed to expansion, digitalization and optimization of the network. On June30, 2001 the Company had 887 radio base stations (RBEs), of which 10 were mobile and provided service in 307 municipalities that corresponded to coverage of 74.5% of the population. Network digitalization was of the order of 74.3%; that is, 74.3% of voice channels were digital, with 92% of its clients using digital handsets. Human Resources The number of employees at June 30, 2001, totaled 1,570, including full-time, interns and temporary employees. Annexes: - Selected historical statistics - EBITDA calculus - Financial statements as of June 30, 2001 and 2000 This press release contains forward-looking statements. Statements that are not statements of historical fact only reflect the beliefs and expectations of the Company’s management. The words “anticipates,” “believes,” “estimates,” “expects,” forecasts,” predicts,” “plans, ” “projects,” and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties, forecast or not by the Company. Accordingly, the actual results of operations of the Company may be different from the Company’s current expectations, and the reader should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments. www.timnordeste.com.br 7
  8. 8. Consolidated Statistics nd st nd 2 Qtr/01 1 Qtr/01 2 Qtr/00 Clients - Total 1,624,834 1,556,619 1,361,669 Net Additions 68,215 45,619 98,417 Market share (%) 65 66 66 Market share marginal (%) 55 77 41 Growth over same period of the previous year (%) 15.1 18.5 78.1 Estimated population of region (in million) 26.4 26.3 26.2 Penetration rate (%) - Tele Nordeste 6.2 5.9 5.4 - Total 9.5 9.0 8.1 Municipalities covered 307 307 297 MOU total 132 136 151 Churn Total (%) 4.3 5.8 8.9 ARPU (R$) - Total 41.42 41.83 45.63 SAC – Client acquisition cost (R$) 142.77 100.38 132.43 Digitalization rate (%) - Network 74 74 66 - Clients 92 90 82 Coverage - Population 75 75 74 - Geographical area 29 29 28 Workforce 1,570 1,648 1,177 EBITDA (in thousands of Reais) nd st nd 2 Qtr/01 1 Qtr/01 2 Qtr/00 Net operational revenue 201,755 202,260 210,793 Operational income 22,097 19,826 (1,009) Depreciation 37,118 35,993 29,741 Amortization of the goodwill 6,294 6,297 1,767 Financial income (8,385) (4,501) (464) Financial expenses 18,714 21,615 22,827 EBITDA 75,838 79,230 52,862 % EBITDA 37.6 39.2 25.1 www.timnordeste.com.br 8
  9. 9. Balance Sheet At June 30, 2001 and June 30, 2000 (In Thousands of Reais) Parent Company Consolidated 30.06.2001 30.06.2000 30.06.2001 30.06.2000 Assets Current Assets Cash and cash equivalents 2,091 524 98,015 10,475 Trade accounts receivable – clients - - 103,952 182,022 Inventories 56 37 7,968 13,678 Telecommunications companies - - 49,526 30,671 Trade accounts receivable – Subsidiaries - 14,453 - - Recoverable taxes 2,186 3,171 40,870 44,291 Deferred income and social contribution taxes 1,080 118 42,728 24,756 Dividends and interest on shareholder’s equity - 4,078 - - Prepaid expenses 44 - 11,164 10,728 Other assets 1,177 1,704 10,181 16,784 6,634 24,085 364,404 333,405 Noncurrent assets Loan to subsidiaries 12,509 5,293 - - Tax incentives - - 2,190 1,912 Deferred income and social contribution taxes - - 153,999 - Legal deposits - - 3,230 879 12,509 5,293 159,419 2,791 Permanent assets Investments 597,087 544,312 12,300 1 Property, plant and equipment 4,612 5,297 682,408 704,239 Deferred asset - - - 202,300 601,699 549,609 694,708 906,540 620,842 578,987 1,218,531 1,242,736 www.timnordeste.com.br 9
  10. 10. Balance Sheet At June 30, 2001 and June 30, 2000 (In Thousands of Reais) Parent Company Consolidated 30.06.2001 30.06.2000 30.06.2001 30.06.2000 Liabilities and shareholder’s Equity Current liabilities Suppliers 844 926 36,302 74,753 Loans and financing - - 34,168 350,740 Debentures - - 7,764 - Taxes payable 784 902 35,295 51,098 Salaries and vacation pay 2,304 1,573 5,821 7,322 Subsidiaries 2,973 100 - - Telecommunication companies - - 14,470 14,118 Dividends and interest shareholder’s equity 2,861 2,400 7,809 7,586 Other liabilities 12,237 1,461 25,998 19,979 22,003 7,362 167,627 525,596 Noncurrent liabilities Loans and financing - - 138,995 41,920 Debentures - - 200,000 - Other liabilities - - 903 1,972 - - 339,898 43,892 Minority interest - - 112,167 101,623 Shareholder’s equity Capital 186,054 108,843 186,054 108,843 Special reserves 193,083 204,068 193,083 204,068 Earnings reserves 170,405 178,922 170,405 178,922 Retained earnings 49,297 79,792 49,297 79,792 598,839 571,625 598,839 571,625 620,842 578,987 1,218,531 1,242,736 www.timnordeste.com.br 10
  11. 11. Statement of Income For the quarters and semesters ended June 30,2001 and June 30,2000 (In Thousands of Reais) Parent Company Consolidated Quarter Semester Quarter Semester Quarter Semester Quarter Semester ended ended ended ended ended ended ended ended 30.06.2001 30.06.2001 30.06.2000 30.06.2000 30.06.2001 30.06.2001 30.06.2000 30.06.2000 Revenue Telecommunication services and sale of goods - - - - 253,485 511,045 265,511 544,727 Deductions (taxes and discounts) - - - - (51,730) (107,030) (54,718) (119,457) Net Revenue - - - - 201,755 404,015 210,793 425,270 Cost of good sold and services rendered - - - - (86,359) (174,898) (96,450) (199,345) Gross profit - - - - 115,396 229,117 114,343 225,925 Operating revenues (expenses) Selling expenses - - - - (54,820) (102,930) (62,768) (109,333) Administrative and general expenses (102) (4,440) (1,156) (2,963) (23,179) (47,953) (24,222) (42,469) Financial expenses (559) (475) (173) (230) (44,830) (40,329) (22,827) (47,832) Financial income 200 111 1,409 2,143 34,501 12,886 464 4,496 Equity in income of subsidiaries 12,915 28,304 3,867 15,775 - - - - Other operating income 766 765 - - 3,584 8,945 2,872 3,690 Other operating expenses (77) (872) (1,085) (1,159) (8,555) (17,814) (8,871) (9,081) Operating income (loss) 13,143 23,393 2,862 13,566 22,097 41,922 (1,009) 25,396 Nonoperating income 31 31 (17) - 1,339 1,496 724 1,029 Nonoperating expenses (35) (36) - - (2,527) (2,668) (347) (545) Income before income and social contribution taxes 13,139 23,388 2,845 13,566 20,909 40,750 (632) 25,880 Income and social contribution taxes - - (439) - (3,913) (8,792) 1,407 (10,183) Reversal of interest on shareholder’s equity - - - - - - 1,227 1,227 Employees Interest (244) (433) - - (602) (1,089) (307) (548) Net income before minority interest 12,895 22,955 2,406 13,566 16,394 30,869 1,695 16,376 Minority interest - - - - (3,499) (7,914) (779) (4,300) Net Income (loss) 12,895 22,955 2,406 13,566 12,895 22,955 916 12,076 Net income (loss) per lot of a thousand shares (R$) 0.0382 0.0680 0.0072 0.0406 Number of shares at June 30, 2001 (thousands) 337,768,635 337,768,635 334,399,028 334,399,028 www.timnordeste.com.br 11

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