In Q4 2024, Telefônica Brasil, the Brazilian unit of Spain’s Telefónica, reported a net profit of R$1.76 billion (around $300 million).
For the full year of 2024, Telefônica Brasil reported a net income of R$5.55 billion (around $950 million), a 10.3% increase.
This marks a 10.1% increase compared to the same quarter last year, aligning with market expectations.
Despite recent macroeconomic challenges, the company maintains a long-term growth trajectory.
The results met LSEG’s consensus estimate of R$1.7 billion.
Revenue surge across segments
The results indicate solid financial performance across all segments. Telefônica Brasil’s Business Adjusted EBITDA was R$ 4.8 billion, representing an 8.3% year-over-year increase.
The company posted net operating revenue of R$14.6 billion in the last quarter, 7.7% higher than in the previous year.
This growth was driven by gains across mobile services, fiber broadband (FTTH), and corporate digital solutions.
Mobile services revenue rose 7% reaching R$9.2 billion, supported by a 9.1% increase in postpaid revenue, as the postpaid subscriber base expanded 7.6% to 66.5 million.
Postpaid churn remained low at 0.99%, while ARPU for postpaid services inched up to R$52.1.
Fixed-line services also contributed significantly, with FTTH revenue surging 12.4% year-over-year as Telefônica Brasil expanded its fiber network to 29.1 million homes (+11.2%), of which 7 million homes were connected (+12.7%).
Meanwhile, corporate data and digital services revenue grew 21.1%, highlighting the company’s focus on diversifying its offerings.
Commitment to shareholder value
Telefônica Brasil reaffirmed its commitment to providing value to shareholders, declaring that for fiscal years 2025 and 2026, it intends to distribute an amount equal to or greater than 100% of its net profit each year.
In 2025, shareholders are expected to get R$4.45 billion in payment, which includes equity interest, share capital reductions, and share buybacks.
To increase shareholder value, the business announced a fresh share buyback program that could include up to 34.7 million shares.
This program, set to begin on Wednesday and last until February 25, 2026, plans to spend a maximum of R$1.75 billion.
This move is viewed as a strategic effort to increase the return on investment for existing shareholders.
Innovative financial strategies
Telefônica Brasil proposed a 40-to-1 reverse stock split in late January, followed by a stock split in which one reverse stock equalled 80 shares.
This novel strategy is intended to raise the liquidity of the company’s shares.
The plan will be discussed in a shareholder’s meeting on March 13, which will be essential in determining the future structure and market perception of Telefônica Brasil’s shares.
Telefônica Brasil’s fourth-quarter 2024 statistics show strong financial health, with increased profits, revenues, and customer base.
By focusing on shareholder returns and developing new financial strategies, the company is well-positioned to handle Brazil’s changing telecoms sector.
As it approaches 2025, the focus remains on sustaining growth and increasing shareholder value, ensuring the company’s competitive advantage in the marketplace.
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