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Press Release 3 Q01   Tele Nordeste Celular En
 

Press Release 3 Q01 Tele Nordeste Celular En

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    Press Release 3 Q01   Tele Nordeste Celular En Press Release 3 Q01 Tele Nordeste Celular En Document Transcript

    • 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 Leonardo Wanderley 55.81.3216.2813 leonardo.wanderley@timnordeste.com.br TELE NORDESTE CELULAR PARTICIPAÇÕES S.A. ANNOUNCES THIRD QUARTER 2001 RESULTS Recife, Brazil (November 7, 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 third quarter of 2001 in accordance with Brazilian GAAP. = 65% of market share at the end of September 2001; = 44,8% of EBITDA margin in the quarter, reaching R$90 million; = Reduction of 68,4% at the bad debt expenses compared to second quarter 2001, representing 1,3% of gross revenue. Operational Highlights Commercial activities during the third quarter of 2001 resulted in the consolidated gross addition of 124,282 clients, (of which 97,753, or 78.7%, where prepaid). Consolidated net additions during the third quarter of 2001 totaled 56,191 clients, all at prepaid system, as a result of the disconnection of 12,468 clients because of bad debt. The purpose of those disconnection was to clean the clients base, in order to reduce the bad debt levels. Excluding those disconnection, the consolidated net additions for the third quarter was 68,659 clients. Together, Tele Nordeste Celular’s operating companies, had a total of 1,681,025 clients on September 30, 2001, of which 799,993 (47.6%) where post-paid clients and 881,032 (52.4%) were prepaid clients. The market share at the end of the third quarter of 2001 was estimated at 65%. As a result of the intensification of the collections and billing activities and the adoption of rigorous collections and polices, the bad debt levels are showing an improvement. During the third quarter of de 2001, the bad debt was 1.3% of gross revenue, against 4.2% during the second quarter of 2001 and 10.2% during the third quarter of 2000. Accumulated for the year the bad debt was 3.4% over the gross revenue, compared to 9.5% for the same period of 2000. www.timnordeste.com.br 1
    • During the third quarter of 2001, we had the launching of the Timmy Hits, directed to the pre- paid costumer (CD with a selection of songs, having as first subject – “Forró”, buying a R$20,00 pre-paid card plus R$3,00 to acquire the CD. Due to the great reception, we are preparing the launching of the next CD in the next days; the choice was made by research in our site Timnet.com. We also had, a promotional campaign on Father’s day, turned to the pre-paid costumers were we gave free minutes to old and new costumers. As a way to reinforce the view of our site Timnet.com to the teens, some blitzs were done in several schools, gym clubs, pubs of the metropolitan area of Recife and Fortaleza, were the samplers were using computers and cell phones to show to the public the use of site, stimulating the acquisition of this services SAC (not revised) The subscriber acquisition cost was R$112, compared to R$143 during the second quarter of 2001 and R$119 during the third quarter of 2000. Accumulated for the year, the subscriber acquisition cost was R$117, compared to R$140 during the same period of 2000. Financial Highlights Tele Nordeste Celular’s consolidated net income for the third quarter of 2001 was R$14.4 million, or R$0.04 per 1,000 shares, against to R$12.9 million during the second quarter of 2001 and R$1.7 million during the third quarter of 2000. Accumulated consolidated net income for the year 2001 was R$37.3 million, compared to R$13.8 million for the same period of 2000. For the third quarter of 2001, Tele Nordeste Celular reported consolidated EBITDA e EBIT of R$90 million and R$43.5 million, respectively, representing an EBITDA margin of 44.8% and an EBIT margin of 21.7% over the consolidated net revenue, compared to EBITDA of R$75.8 million and EBIT of R$32.4 million, representing an EBITDA margin of 37.6% and EBIT margin of 16.1% over the consolidate net revenue for the second quarter of 2001, and, compared to EBITDA of R$58.8 million and EBIT of R$20.2 million, representing EBITDA margin of 29.1% and EBIT margin of 10% over the consolidated net revenue reported for the third quarter of 2000. Accumulated for the year 2001, consolidated EBITDA and EBIT were R$245.1 million and R$112.9 million, respectively, representing an EBITDA margin of 40.5% and an EBIT of 18.7% over the consolidated net revenue, compared to a consolidated EBITDA and EBIT of R$184.6 million and R$88.4 millions, respectively, representing an EBITDA margin of 29.4% and an EBIT margin of 14.1% 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 3Q/01 www.timnordeste.com.br 2
    • Consolidated net operating revenue for the third quarter of 2001 reached R$200.8 million, against R$201.8 million during the second quarter of 2001 and R$202.1 million during the third quarter of 2000. Accumulated for the year, consolidated net operating revenue reached R$604.8 million, against R$627.3 million during the same period of 2000. It’s important to emphasize that the strong bad debt control impacted in the net operating revenue evolution, but provoked an increase of profitability. Consolidated net operating revenue during the third quarter of 2001 decreased 0.5% when compared to the second quarter of 2001. This reduction was due to the decrease of 36.5% at the handsets’ sales, provoked by the strategic decision of Tele Nordeste Celular’s operating companies to sell handsets only in their own stories. In July, the outsourcing of the distribution of the handsets to the Dealers was discontinued, and so, the Dealers are free to buy handsets in the market. Considering only the telecom services revenue there was an increase of 2.1%, due to the improvement of 9.3% in the usage charges (outgoing traffic, monthly subscription payments and value added services), which compensated the reduction of 8.1% in the interconnection revenue (incoming traffic). Compared to the third quarter of 2000, consolidated net operating revenue decreased 0.6%, also due to the reduction of 75.6% at the handsets’ sales. Considering only the telecom services revenue, there was an increase of 8.1%. Accumulated for the year, consolidated net operating revenue reached R$604.8 million, representing a decrease of 3.6% when compared to the same period of 2000. Net Operating Revenue (in US$000) 220 210 200 190 1Q/00 2Q/00 3Q/00 4Q/00 1Q/01 2Q/01 3Q/01 www.timnordeste.com.br 3
    • Selected Consolidated Financial Data (in thousands of Reais) 2001 2000 9 months 3º Qtr. 2º Qtr. 3º Qtr. 2001 2000 Revenue - Usage charges 107,157 98,449 118,475 319,327 374,504 - Monthly subscription payments 49,382 43,801 39,647 135,916 130,363 - Network usage charges 92,176 100,329 71,366 277,498 199,475 - Sales of handsets 6,315 9,946 25,889 31,452 95,813 - Other 36 960 641 1,918 590 Subtotal 255,066 253,485 256,018 766,111 800,745 - Value added and other indirect taxes (54,264) (51,730) (53,948) (161,294) (173,405) Net Operating revenue 200,802 201,755 202,070 604,817 627,340 Cost of services and of goods sold - Depreciation e amortization (32,748) (31,202) (27,597) (93,923) (79,322) - Personal (2,311) (2,521) (2,420) (7,313) (6,479) - Materials and services (106) (106) (221) (349) (425) - Circuit leasing and related expenses (7,741) (7,166) (7,939) (23,756) (24,558) - Leases and insurance (2,545) (3,377) (2,830) (8,860) (7,477) - Cellular handset costs (8,497) (11,088) (23,304) (32,130) (91,816) - Fistel (263) (242) (234) (687) (634) - Plant support and maintenance (1,536) (1,724) (4,748) (5,021) (4,998) - Network usage charges (33,505) (27,313) (22,044) (88,377) (72,196) - Other (1,341) (1,620) (2,372) (5,075) (5,150) Subtotal (90,593) (86,359) (93,709) (265,491) (293,055) Gross Profit 110,209 115,396 108,361 339,326 334,285 Consolidated gross profit for the third quarter of 2001 reached R$110.2 million, representing a decrease of 4.5% when compared to the second quarter 2001 and an increase of 1.7% when compared to the third quarter of 2000. The decrease compared to the second quarter of 2001 was due to the reduction of 0.5% at the consolidated net operating revenue, together with the improvement of 4.9% at the costs, provoked by the increase of the interconnection and circuits leasing costs, which annul the reduction on the handsets costs. This reduction on the handsets costs was due to the strategic decision of Tele Nordeste Celular’s operating companies to sell handsets only in their own stories. The growth compared to the third quarter of 2000 was due to the decrease of the handsets costs. Accumulated for the year, the gross profit reached R$339.3 million, representing an increase of 1.5% 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 3Q/01 www.timnordeste.com.br 4
    • Selected Consolidated Financial Data (in thousands of Reais) 2001 2000 9 months 3º Qtr. 2º Qtr. 3º Qtr. 2001 2000 Operating Expenses - Selling 36,332 54,820 60,815 139,262 170,148 - General and administrative 24,638 23,179 20,547 72,591 63,016 - Other operating expenses, net 5,725 4,971 5,991 14,594 11,381 Subtotal 66,695 82,970 87,353 226,447 244,545 - Net financing expenses 15,347 10,329 19,003 42,790 62,339 Total 82,042 93,299 106,356 269,237 306,884 Consolidated net operating expenses decreased 12.1% compared to the second quarter of 2001, due to lower consolidated sales expenses, mainly bad debt and commissions, which compensated the increase in the consolidated net financial expenses. When compared to the third quarter of 2000, the reduction was 22.9% due to lower consolidated sales expenses (bad debt, commissions and marketing campaigns) and lower consolidated net financial expenses, which compensated for the increase in the consolidated general and administrative expenses. Accumulated for the year 2001, consolidated net operating expenses reached R$269.2 million, representing a reduction of 12.3%, when compared to the same period of 2000. Consolidated bad debt expenses during the third quarter of 2001 reached R$3.4 million, representing 1.3% over the gross revenue, and showing a reduction of 68.4% (from R$10.7 million to R$3.4 million) when compared to the second quarter of 2001, and a reduction of 87.1% when compared to the third quarter of 2000. Accumulated for the year 2001, consolidated bad debt expenses reached R$26.4 million, representing 3.4% over the gross revenue, that means a reduction of 65.3% 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 3Q/01 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, for 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. www.timnordeste.com.br 5
    • During the third quarter of 2001, the consolidated amortization of the premium, net of the 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$6.1 million. Accumulated for the year 2001, the consolidated amortization of the premium, net of the reversal of the provision for the integrity of shareholder’s equity, was R$18.9 million, generating a fiscal benefit in the order of R$17.7 million. ARPU (not revised) The blended average revenue per user (ARPU), net of taxes, for the third quarter of 2001 was R$40 per month, compared to R$41.42 per month in the second quarter of 2001, and R$42.46 per month for the third quarter of 2000. These reductions when compared to the second quarter of 2001 and the third quarter of 2000, were due to the increase of prepaid clients base. Accumulated for the year 2001, the consolidated average per use (ARPU) was R$41.06, against R$46.22 the same period of 2000. In 2001 blocking is carried out on a partial basis, and as a result, only incoming traffic revenues are generated by these clients. Competition (not revised) The Company estimates that its market share at the end of the third quarter of 2001 was approximately 65% in terms of number of accesses. The penetration rate in the region at the end of September 2001 was estimated at 9.8%, against roughly 19.1% Brazilian average (27 million lines). Debt Profile Consolidated debt on September 30, 2001, was R$385.3 million, with R$63.9 million maturing in the short-term. The debt in foreign currency totaled R$186.3 million, 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. Consolidated net debt profile on September 30, was in the order of R$229.7 million. Capital Expenditures During the third quarter of 2001, the company invested R$28.7 million. The investments were directed to expansion, digitalization and optimization of the network. Accumulated for the year 2001, the investments were R$70.6 million. On September 30, 2001 the Company had 889 radio base stations (RBEs), of which 10 were mobile and provided service in 307 municipalities that corresponded to coverage of 74.5% of the population. Network digitalization was of the order of 74.8%; that is, 74.8% of voice channels were digital, with 93% of its clients using digital handsets. Human Resources The number of employees on September 30, 2001, totaled 1,448, including full-time, internals and temporary employees. www.timnordeste.com.br 6
    • Annexes: - Selected historical statistics - EBITDA calculus - Financial statements as of September 30, 2001 and 2000 This press release contains forward-looking statements. Statements that are not statements of historical fact only reflect the beliefs and expectations of the Company’s management. The words “anticipates,” “believes,” “estimates,” “expects,” forecasts,” predicts,” “plans, ” “projects,” and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties, forecast or not by the Company. Accordingly, the actual results of operations of the Company may be different from the Company’s current expectations, and the reader should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments. www.timnordeste.com.br 7
    • Consolidated Statistics th nd th 3 Qtr/01 2 Qtr/01 3 Qtr/00 Clients - Total 1,681,025 1,624,834 1,482,673 Net Additions 56,191 68,215 121,004 Market share (%) 65 65 65 Market share marginal (%) 58 55 65 Growth over same period of the previous year (%) 13.4 15.1 55.7 Estimated population of region (in million) 27.2 27 26.2 Penetration rate (%) - Tele Nordeste 6.4 6.2 5.6 - Total 9.8 9.5 8.7 Municipalities covered 307 307 307 MOU total 130 132 156 Churn Total (%) 4.1 4.3 4.9 ARPU (R$) - Total 40.00 41.42 42.46 SAC – Client acquisition cost (R$) 112 143 119 Digitalization rate (%) - Network 75 74 73 - Clients 93 92 83 Coverage - Population 75 75 75 - Geographical area 29 29 29 Workforce 1,448 1,570 1,623 EBITDA (in thousands of Reais) th nd th 3 Qtr/01 2 Qtr/01 3 Qtr/00 Net operational revenue 200,802 201,755 202,070 Operational income 28,167 22,097 1,238 Depreciation 40,242 37,118 33,517 Amortization of the goodwill 6,293 6,294 5,053 Financial income (8,120) (8,385) (1,256) Financial expenses 23,467 18,714 20,259 EBITDA 90,049 75,838 58,811 % EBITDA 44.8 37.6 29,1 www.timnordeste.com.br 8
    • Balance Sheet At September 30, 2001 and September 30, 2000 (In Thousands of Reais) Parent Company Consolidated 30.09.2001 30.09.2000 30.09.2001 30.09.2000 Assets Current Assets Cash and cash equivalents 575 2,379 155,517 10,103 Trade accounts receivable – clients 4 - 101,777 164,049 Inventories 41 61 8,562 10,664 Telecommunications companies - - 25,990 27,947 Trade accounts receivable – Subsidiaries - 20,271 - - Recoverable taxes 2,189 2,434 46,320 51.638 Deferred income and social contribution taxes - - 41,343 - Dividends and interest on shareholder’s equity - 80 - - Prepaid expenses 18 - 5,748 4,274 Other assets 1,123 1.915 3,217 13,771 3.950 27.140 388.474 282.446 Noncurrent assets Loan to subsidiaries 6,486 228 - - Tax incentives - - 2.238 1.912 Deferred income and social contribution taxes 405 1.080 147.720 22.789 Legal deposits 22 - 4.795 911 6.913 1.308 154.753 25.612 Permanent assets Investments 618,923 547,593 15,600 1 Property, plant and equipment 4,454 5,340 670,010 714,749 Deferred asset - 1,422 - 198,671 623.377 554.355 685,610 913,421 634.240 582.803 1,228,837 1,221,479 www.timnordeste.com.br 9
    • Balance Sheet At September 30, 2001 and September 30, 2000 (In Thousands of Reais) Parent Company Consolidated 30.09.2001 30.09.2000 30.09.2001 30.09.2000 Liabilities and shareholder’s Equity Current liabilities Suppliers 791 849 25,917 79,767 Loans and financing - - 46,531 294,033 Debentures - - 17,374 - Taxes payable 321 700 42,031 49,271 Salaries and vacation pay 2,516 2,042 6,730 9,032 Subsidiaries 10,526 828 - - Telecommunication companies - 2 11,171 14,637 Dividends and interest shareholder’s equity 2,908 2,359 7,444 6,120 Other liabilities 3,948 2,697 18,954 17,130 21,010 9,477 176,152 469,990 Noncurrent liabilities Loans and financing - - 121,347 74,010 Debentures - - 200,000 - Other liabilities - - 903 1,974 - 322,250 75,984 Minority interest - - 117,205 101,179 Shareholder’s equity Capital 186.054 108.843 186.054 108.843 Capital reserves - - - - Special reserves 193,083 204,068 193,083 204,068 Earnings reserves 170,405 178,922 170,405 178,922 Retained earnings 63,688 81,493 63,688 81,493 613,230 573,326 613,230 573,326 634,240 582,803 1,228,837 1,221,479 www.timnordeste.com.br 10
    • Statement of Income For the quarter ended September 30,2001 and September 30,2000 (In Thousands of Reais) Parent Company Consolidated Quarter 9 moths Quarter 9 moths Quarter 9 moths Quarter 9 moths ended ending ended ending ended ending ended ending 30.09.2001 30.09.2001 30.09.2000 30.09.2000 30.09.2001 30.09.2001 30.09.2000 30.09.2000 Revenue Telecommunication services and - - - - 255,066 766,11 256,018 800,745 sale of goods Deductions (54,264) (161,294) (53,948) (173,405) (taxes and discounts) - - - - Net Revenue 200,802 604,817 202,070) 627,340 - - - - Cost of good sold and services - - - - (90,593) (265,491) (93,709) (293,055) rendered Gross profit - - - - 110,209 339,326 108,361 334,285 Operating revenues (expenses) Selling expenses - - - (36,332) (139,262) (60,815) (170,148) Administrative and general (1,857) (6,297) (1,454) (4,417) (24,638) (72,591) (20,547) (63,016) expenses Financial expenses (1,478) (1,953) (12) (242) (23.467) (63,796) (20,259) (68,091) Financial income 269 380 369 2,512 8,120 21,006 1,256 5,752 Equity in income of subsidiaries 18,537 46,841 3,280 19,55 - - - - Other operating income 1 766 - - 3,568 12,513 59 3,750 Other operating expenses (312) (1,184) (492) (1,651) (9,293) (27,107) (6,817) (16,446) Operating income (loss) 15,160 38,553 1,691 15,257 28,167 70,089 1,238 26,086 Nonoperating income 21 52 10 10 895 2,391 1,176 2,205 Nonoperating expenses (21) (57) - - (943) (3,611) (950) (1,495) Income before income and social contribution taxes 15,160 38,548 1,701 15,267 28,119 68,869 1,464 26,796 Income and social contribution (675) (675) - - (8.090) (16.882) 792 (9,391) taxes Reversal of interest on - - - - - - - 1,227 shareholder’s equity Employees Interest (94) (527) - - (600) (1.689) - - Net income before minority interest 14,391 37,346 1,701 15,267 19,429 50,298 2,256 18,632 Minority interest - - - - (5,038) (12,952) (555) (4,855) Net Income (loss) 14,391 37,346 1,701 15,267 14.391 37,346 1.701 13.777 Net income (loss) per lot of a thousand shares (R$) 0.04 0.11 0.01 0.05 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