Investor Presentation • Nov 11, 2021
Investor Presentation
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Announcement | Lisbon | 11 November 2021
PHAROL, SGPS S.A. hereby informs on the 2021 third quarter results disclosed by Oi, S.A., as detailed in the company's document attached hereto.
N o v e m b e r 1 1 , 2 0 2 1 INVESTOR RELATIONS
1
This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and the applicable Brazilian regulations. Statements that are not historical facts, including statements regarding the beliefs and expectations of Oi S.A. – under Judicial Reorganization ("Oi" or "Company"), business strategies, future synergies, cost savings, future costs and future liquidity are forward-looking statements.
The words "anticipates", "intends", "believes", "estimates", "expects", "forecasts", "plans," "aims" and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. There is no guarantee that the expected events, tendencies or expected results will actually occur. Such statements reflect the current views of the Company's management and are subject to a number of risks and uncertainties. These statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, corporate approvals, operational factors and other factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations. All forward-looking statements attributable to the Company or its affiliates, or persons acting on their behalf, are expressly qualified in their entirety by the cautionary statements set forth in this notice. Undue reliance should not be placed on such statements. Forward-looking statements speak only as of the date they are made.
Except as required under the Brazilian and U.S. federal securities laws and the rules and regulations of the CVM, the SEC or other regulatory authorities in other applicable jurisdictions, the Company and its affiliates do not have any intention or obligation to update, revise or disclose any changes to any of the forward-looking statements herein in order to reflect current or future events or their developments, changes in assumptions or changes in other factors affecting the forward-looking statements herein. You are advised, however, to consult any further disclosures the Company makes on related subjects in reports and communications that the Company files with the CVM and the SEC.
highlights
fiber
EARNINGS REVIEW OI – 3Q 2021
2 1
FIBER ARPU, R\$ Upselling continues to play a 200mbps 400mbps 500mbps 1 GBPS
role in boosting ARPU. In 3Q21, 10.5% of the Fiber customer base had speeds ≥ 400Mbps, and 19% of the net additions were ≥ 400Mbps, 3p.p. over last quarter.
Residential
4
1 – Revenue Generating Units; 2 - Impacted by the comparison with 2Q20, the worst quarter of the COVID-19 pandemic.
N O V 2 1
OI SOLUÇÕES REVENUES R\$ MN
~40% in 2024 The growth of ICT revenue has contributed to compensate legacy impacts on Oi Soluções Revenues sequentially.
ICT Data + Legacy ¹
Oi Soluções revenues stable at ~R\$ 2.6Bn.
IT revenues possibly growing its share to
Expanding fiber penetration in the SME segment continued to be the main driver of total SME revenue growth.
b2b
NEW REVENUES
7
2 1
Notes: (1): 3,3 thousand Municipalities served by SEREDE; (2): Door to door partners
CONSOLIDATED REVENUES (R\$ MN) DISCONTINUED¹ 3Q20 2Q21 3Q21 2,364 2,118 2,240 -5.2% +5.8% NEW OI 4,464 3Q20 2Q21 3Q21 4,648 4,333 -4.0% +3.0% (R\$ MN) (R\$ MN) 2,223 2Q21 1,302 (59%) 1,750 (77%) 534 (23%) 3Q20 811 (37%) 1,404 (63%) 922 (41%) 3Q21 2,284 2,215 -2.7% +0.4% Legacy Core: Fiber + ICT + New Revenues +73% yoy increase of core revenue
N O V 2 1
1 – UPI Mobile Assets, UPI Infra Co, UPI Towers, UPI Data Centers and UPI TV Co.
ROUTINE EBITDA (R\$ MN) OPEX (R\$ MN)
OPEX EVOLUTION (% yoy)
1 0
1 1
COSTS LINKED TO REVENUE AND TO
GROWTH (R\$ MN)
OPEX
THE REDUCTION PROGRAM ASSOCIATED WITH THE M&AS AIMS TO TRANSFORM THE COMPANY'S COST STRUCTURE IN ORDER TO MAKE THE NEW OI MUCH LIGHTER, AGILE AND SUSTAINABLE
| STREAMLINING THE NEW O | NEW OI OPERATIONS | LEGACY TURNAROUND |
|---|---|---|
| ORGANIZATIONAL STRUCTURE - Simplified organization - Redesign of the New OL a light, functional and customer centric company . Increased relevance of Shared Services Structure . Reduction of 1300 positions sines by performed in 3021 COSTS OUT - HOBILE AND INFRACO (TO BE EXECUTED WITH THE UPI CARVE- OUTS DURING 2022) - Commercial footprint reduction · Active telesales resizing · Morking capital reduction' stockel |
MARKETING AND DIGITAL · Portfolio simplification li.e. new fiber cloital product) . Botal E-Care, E-Commerce E - Collection E- billing) · Marketing spanding potimization · Channel mix optimization and credit score intelligence Reduced content acquisition costs IT AND NETWORK EFFICIENCY Network maintenance: Efficiency of support Buniet Linear · Switch off: 450 eyebres already shutdown -30 playmed for 2022 . Operation collimization and automation . New IT Stack simplifying core IT . Energy: Cost reduction through 60 plants and free energy market $65-4$ · Procurament officiant initiations . Efficiency's general expenses (e.g. vehicles, third perties services, end others! |
CONCESSION SUSTAINABILITY · Migration legacy services from copper to alternative technologies la q winness public telephony ML VOP and Sterl Reduction of copper operation inefficiency · Network decommissioning (de-average) · Field team-coerational modal review · Contact services digitalization · Reduction in the oublic talenhone- aligned with regulatory obligations - TUP ,,,,,,,,,,,,,,,,,,,,,,,,,, MIGRATION TO AUTHORIZATION ARBITRATION . Multi billion dispute carried out by the CCI arbitration chamber · Unsustainability. · Financial economic balance. · PMSUbalance · approval for investment in regulatory searts . Scope of artistration fully accepted by Anatoli |
| STRONG FINANCIAL DISCIPLINE CULTURE |
1 3
and others) - In progress
| Gross Debt Breakdown IRS MNI |
Fair Value | Proceeds of Payment |
|---|---|---|
| BNDES | 4.496 UPI Mobile sale | |
| Local Banks | 5.616 UPI Mobile / InfraCo sales | |
| FCAs | 4.425 UPI Mobile / InfraCo sales | |
| V. Tal Convertible Deb. | 2.726 UPI InfraCo sale | |
| Mobile Bridge Loan | 2.069 UPI Mobile sale | |
| Bonds 2026 | 4.904 UPI Mobile (Mantatory tender offer) | |
| Qualified Bonds | 8.458 | |
| Facility "Non Qualified" | 398 | |
| General Offering | 1.113 | |
| Other | [174] | |
| Total Gross Debt | 34 031 |
Differentiated fiber network, with coverage, granularity and quality – enabler of 5G in Brazil
Totaling 195 cities in 3Q21 +1.4 M of HPs
~2.3k cities with available technical capacity
~400k km of fiber network!
100x Brazil's distance from North to South
60% of municipalities with network redundancy
Network reliability and SLA as a valueadded service
The company is already a reality and is born with relevant numbers... +1.1Bn EBITDA EOP 2021 ~13.5M HPs >3M HCs ACTIVE BASE OF 340+ NEUTRAL AND WHOLESALE CONTRACTS 10+M HPs WITH MULTI-TENANT CUSTOMER
Differentiated fiber network, with coverage, granularity and quality – enabler of 5G in Brazil
A true neutral network
POTENTIAL
ENVIROMENTAL SOCIAL GOVERNANCE
• We maintain our Reverse Logistics Program, reconditioning 203 thousand units of FTTH equipment by 3Q21.
• Brazil 2021 Protection Award (safe work environment with better quality of life).
• Launch of the Oi Privacy Program, with emphasis on the People come Before Data in service and respect for holders.
4Q21 / 1Q22 InfraCo Cade's approval InfraCo Anatel's preliminary consent Mobile preliminary Cade and Anatel approvals Closing of V·tal Closing of UPI Mobile Assets V·tal preparation activities End of Judicial Reorganization 2022 V·tal and Mobile Assets Transition Processes New Oi and V·tal model execution Migration for authorization SEP/OCT 20 Holding of the General Creditors Meeting Confirmation of the GCM by Judicial Court NOV/DEC 20 Competitive Bidding Process for UPI Towers and UPI Data Center Competitive Bidding Process for UPI Mobile Assets Closing of UPI Towers and UPI Data Center 1Q21 Cash in of UPI Data Centers on March 15th Cash in of UPI Towers on March 30th Signing UPI Mobile Assets Agreement 2Q21 / 3Q21 Agreement with BTG for UPI Infra Co Binding Offer UPI Infra Co Competitive Process Creation of V·tal brand for Infra Co Arbitration Commitment approved by Anatel's Board of Directors on Aug/21 V·tal preparation activities CORE BUSINESS ACCELERATION AND NEW REVENUE SOURCES ORGANIZATIONAL TRANSFORMATION AND COST STRUCTURE READJUSTMENT CONCESSION RESOLUTION INFRA CO DEVELOPMENT COMPLETION OF STRUCTURING M&A OPERATIONS 1 2 3 4 0
Investor Relations November 10, 2021
Oi
| Earnings Release | November 10, 2021 | |
|---|---|---|
Video Conference in English
November 11, 2021 12:00 pm (Brasília) 10:00 am (NY) / 3:00 pm (UK) ZOOM: click here
SIMULTANEOUS TRANSLATION
November 11, 2021 12:00 pm (Brasília) 10:00 am (NY) / 3:00 pm (UK) TEAMS: click here
This report contains the operational and financial performance of Oi S.A. – under Judicial Reorganization ("Oi S.A." or "Oi" or "Company") – and its subsidiaries for the third quarter of 2021.
OPERATIONAL EXECUTION ON TRACK, WITH FIBER KEEPING STRONG PACE, RESIDENTIAL REVENUE CONFIRMING SOLID TURNAROUND, DECLINING COSTS AND MARGIN EXPANSION
| in R\$ million or otherwise stated | 3021 | 3020 | 2021 | YoY | QoQ | 2021 | 2020 | YoY |
|---|---|---|---|---|---|---|---|---|
| Oi S.A. Consolidated | ||||||||
| Total Net Revenues | 4.520 | 4.706 | 4,389 | $-3.9%$ | 3.0% | 13.362 | 13,998 | $-4.5%$ |
| Routine EBITDA | 1.460 | 1.462 | 1.284 | $-0.2%$ | 13.7% | 3.883 | 4.354 | $-10.8%$ |
| Routine EBITDA Margin [%] | 32.3% | 31.1% | 29.3% | 1.2 p.p. | 3.0 p.p. | 29.1% | 31.1% | $-2.0 p.p.$ |
| Net Income [Loss] attributable to owners of the Company | $-4.813$ | $-2.638$ | 1.139 | 82.4% | $-522.5%$ | $-6.711$ | $-12.328$ | $-45.6%$ |
| Net Debt | 29,899 | 21.243 | 25.695 | 40.7% | 16.4% | 29,899 | 21.243 | 40.7% |
| Available Cash | 4.132 | 5.686 | 3.421 | $-27.3%$ | 20.8% | 4.132 | 5,686 | $-27.3%$ |
| CAPEX | 1,825 | 2.018 | 1,896 | $-9.6%$ | $-3.8%$ | 5.584 | 5,576 | 0.2% |
| in R\$ million or otherwise stated | 3021 | 3020 | 2021 | YoY | QoQ | 2021 | 2020 | YoY |
|---|---|---|---|---|---|---|---|---|
| BRAZIL | ||||||||
| Total Net Revenues | 4.464 | 4.648 | 4.333 | $-4.0%$ | 3.0% | 13,192 | 13,837 | $-4.7%$ |
| Routine EBITDA | 1.443 | 1.437 | 1.271 | 0.5% | 13.6% | 3.843 | 4.382 | $-12.3%$ |
| Routine EBITDA Margin [%] | 32.3% | 30.9% | 29.3% | 1.4 p.p. | 3.0 p.p. | 29.1% | 31.7% | $-2.5 p.p.$ |
| CAPEX | 1.812 | 2.005 | 1,883 | $-9.6%$ | $-3.8%$ | 5.555 | 5,536 | 0.3% |
| Routine EBITDA - CAPEX | $-369$ | $-568$ | $-613$ | $-35.1%$ | $-39.8%$ | $-1,712$ | $-1,154$ | 48.4% |
| Quarter | 9 months | Weight % | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| R\$ million | 3021 | 3020 | 2021 | YoY | QoQ | 2021 | 2020 | YoY | 3021 | 3020 |
| Consolidated Total Net Revenues | 4.520 | 4.706 | 4,389 | $-3.9%$ | 3.0% | 13.362 | 13,998 | $-4.5%$ | 100% | 100% |
| Brazil | 4.464 | 4.648 | 4.333 | $-4.0%$ | 3.0% | 13,192 | 13,837 | $-4.7%$ | 98.7% | 98.8% |
| New Oi | 2,223 | 2,284 | 2,215 | $-2.7%$ | 0.4% | 6,652 | 6,949 | $-4.3%$ | 49.2% | 48.5% |
| Residential | 1,335 | 1,303 | 1,308 | 2.4% | 2.1% | 3.953 | 3,877 | 2.0% | 29.5% | 27.7% |
| B 2 B | 869 | 958 | 882 | $-9.3%$ | $-1.5%$ | 2,630 | 2,999 | $-12.3%$ | 19.2% | 20.4% |
| Other services | 20 | 23 | 26 | $-13.4%$ | $-23.7%$ | 69 | 73 | $-5.6%$ | 0.4% | 0.5% |
| Discontinued Operations | 2,240 | 2,364 | 2,118 | $-5.2%$ | 5.8% | 6,540 | 6,888 | $-5.1%$ | 49.6% | 50.2% |
| International Operations | 57 | 58 | 55 | $-1.9%$ | 3.0% | 171 | 161 | 6.1% | 1.3% | 1.2% |
| Revenue Generating Units [RGU] - ['000] | 55.464 | 52.156 | 55.319 | 6.3% | 0.3% | 55.464 | 52.156 | 6.3% | 100% | 100% |
|---|---|---|---|---|---|---|---|---|---|---|
| New Oi | 13,733 | 14,397 | 13,891 | $-4.6%$ | $-1.1%$ | 13,733 | 14,397 | $-4.6%$ | 24.8% | 27.6% |
| Residential | 10.125 | 10,615 | 10.253 | $-4.6%$ | $-1.2%$ | 10,125 | 10.615 | $-4.6%$ | 18,3% | 20.4% |
| B 2 B | 3,475 | 3,626 | 3,503 | $-4.2%$ | $-0.8%$ | 3,475 | 3,626 | $-4.2%$ | 6.3% | 7.0% |
| Public Telephones | 133 | 157 | 136 | $-15.4%$ | $-2.1%$ | 133 | 157 | $-15.4%$ | 0.2% | 0.3% |
| Discontinued Operations | 41,731 | 37,759 | 41,427 | 10.5% | 0.7% | 41,731 | 37,759 | 10.5% | 75.2% | 72.4% |
| Mobile | 40.702 | 36,537 | 40.333 | 11.4% | 0.9% | 40.702 | 36,537 | 11.4% | 73.4% | 70.1% |
| DTH TV | 1,030 | 1.223 | 1,094 | $-15.8%$ | $-5.9%$ | 1,030 | .223 | $-15.8%$ | 1.9% | 2.3% |
Consolidated net revenues totaled R\$ 4,520 million in 3Q21 (+3.0% q.o.q. and +3.9% y.o.y.).
Net revenues from Brazilian operations ("Brazil") totaled R\$ 4,464 million (+3.0% q.o.q. and -4.0% y.o.y.). Net revenue from international operations (Africa and East Timor) totaled R\$ 57 million, up 3.0% over 2Q21 and down 1.9% from 3Q20.
Net revenues from continued operations in Brazil amounted to R\$ 2,223 million in 3Q21 (-2.7% y.o.y. and +0.4% q.o.q.).
| 3021 | 3020 | 2021 | YoY | QoQ | 2021 | 2020 | YoY | |
|---|---|---|---|---|---|---|---|---|
| Residential | ||||||||
| Net Revenues [R\$ million] | 1.335 | 1.303 | 1.308 | 2.4% | 2.1% | 3,953 | 3,877 | 2.0% |
| Fiber | 751 | 383 | 654 | 96.4% | 14.8% | 1.966 | 832 | 136.4% |
| Copper | 583 | 921 | 653 | $-36.6%$ | $-10.7%$ | 1,987 | 3,045 | $-34.7%$ |
| Copper Voice | 393 | 597 | 448 | $-34.2%$ | $-12.3%$ | 1.351 | 1,950 | $-30.8%$ |
| Copper Broadband | 190 | 323 | 205 | $-41.1%$ | $-7.3%$ | 637 | 1.095 | $-41.8%$ |
| Revenue Generating Units [RGU] - ['000] | 10,125 | 10,615 | 10,253 | $-4.6%$ | $-1.2%$ | 10,125 | 10,615 | $-4.6%$ |
| Fiber | 5.946 | 3.276 | 5.345 | 81.5% | 11.2% | 5.946 | 3,276 | 81.5% |
| Fixed Broadband | 2.936 | 1.616 | 2.638 | 81.7% | 11.3% | 2.936 | 1.616 | 81.7% |
| Fixed Line in Service | 2.919 | 1.578 | 2.615 | 85.0% | 11.6% | 2,919 | 1,578 | 85.0% |
| IPTV | 90 | 81 | 93 | 10.6% | $-3.2%$ | 90 | 81 | 10.6% |
| Copper | 4,179 | 7.339 | 4,908 | $-43.1%$ | $-14.8%$ | 4,179 | 7,339 | $-43.1%$ |
| Fixed Line in Service | 2,822 | 4,908 | 3.302 | $-42.5%$ | $-14.6%$ | 2.822 | 4,908 | $-42.5%$ |
| Fixed Broadband | 1,358 | 2.431 | 1.605 | $-44.2%$ | $-15.4%$ | 1.358 | 2.431 | $-44.2%$ |
| FTTH - Homes Connected [HC's] | 2.975 | 1.659 | 2.677 | 79.3% | 11.1% | 2.975 | 1.659 | 79.3% |
Net revenues from continued operations in the Residential segment totaled R\$ 1,335 million in 3Q21 (+2.1% q.o.q. and +2.1% y.o.y.), confirming the segment's turnaround as a result of the successful execution of the expansion strategy of Fiber services. Revenues from Fiber services are already higher than revenues from copper services, reaching R\$ 751 million in the quarter, representing a 56% share of the segment's total revenue.
3Q14 Earnings Release At the end of the period, the Company had 10,125 thousand RGUs in the Residential segment, (-1.2% q.o.q. and -4.6% y.o.y.). RGUs in the Fiber residential segment reached 5,946 thousand and already represent 59% of the RGUs in the segment.
The Company maintained the strong pace of network expansion and FTTH accesses. The quarter ended with 13.5 million homes passed with fiber (HPs), an addition of 1.4 million new HPs to the Company's base, averaging over 468 thousand HPs per month in 3Q21.
In 3Q21, FTTH net additions of homes connected totaled 326 thousand customers (298 thousand in the Residential segment), averaging over 100 thousand new customers per month. Oi closed 3Q21 with around 3.2 million Homes Connected (HCs) to fiber (3.0 million of which in the Residential segment) and a take-up rate of 23.5%. The objective of the fiber plan is to reach a take-up rate above 25% by the end of 2024. This was the sixth consecutive quarter that the Company connected more than 300 thousand HPs to its customer base.
The Company continues executing its FTTH investiment plan and expanding installation, support, sales and marketing initiatives. Cohorts with more than one year of installation have already reached 25% in take-up and cohorts with over 15 months of installation are already close to 30%. The cohorts from September 2019 (24 months) reached a take-up rate of 32.5% at the end of 3Q21.
Fiber ARPU was R\$ 89 in 3Q21, up 1.6% over 3Q20 and 3.1% higher than in 2Q21. The sales strategy continued to obtain impressive results and fiber already accounts for 59% of residential RGUs. In 2Q21, this percentage was approximately 52% and 31% in 2Q20. In 3Q21, 10.5% of Fiber customers had broadband plans of 400MB or higher. In this quarter, 19% of new plans sold were for 400MB or higher. Fiber is already available in 195 municipalities across the country. Oi's market share averages higher than 14.5% in this universe.
Fiber revenues reached R\$ 805 million in 3Q21, with R\$ 751 million from residential customers and R\$ 54 million from companies (B2B), showing 100% annual growth and 17% sequential growth. As a result, the annualized fiber revenue is already at a level above R\$ 3.2 billion.
Fiber revenues already account for 56% of total residential revenues in 3Q21, compared to 29% of the total amount in 3Q20 and 50% in the previous quarter. The success of the fiber project boosted the residential revenue turnaround. Fiber reversed the structural downward trend in residential revenues (due to legacy services) and the segment has already posted annual revenue growth for two consecutive quarters.
Oi closed 3Q21 with 2,822 thousand copper fixed voice customers in the Residential segment (-14.6% q.o.q. and -42.5% y.o.y). In copper broadband, the Company recorded 1,358 thousand RGUs in the segment, down 15.4% in the quarter and 44.2% lower in the annual comparison.
Demand for copper services continue to decline, as these services are been replaced by mobile services and more advanced technologies in residential services, with lower latency and greater reliability, such as Fiber broadband.
3Q14 Earnings Release In addition to the decline in demand for legacy products, the Company continues to reduce its commercial focus on these services and accelerating the replacement of copper with fiber. Commercial and financial efforts are focus to accelerate the FTTH project, maximizing value creation for the Company.
| 3021 | 3020 | 2021 | YoY | QoQ | 2021 | 2020 | YoY | |
|---|---|---|---|---|---|---|---|---|
| B2B | ||||||||
| Net Revenues [R\$ million] | 869 | 958 | 882 | $-9.3%$ | $-1.5%$ | 2.630 | 2.999 | $-12.3%$ |
| Oi Soluções [Corporate] | 571 | 667 | 583 | $-14.5%$ | $-2.1%$ | 1.741 | 2.041 | $-14.7%$ |
| ΙT | 97 | 109 | 95 | $-10.8%$ | 2.4% | 281 | 333 | $-15.6%$ |
| Data | 275 | 323 | 283 | $-14.8%$ | $-2.6%$ | 847 | 1,009 | $-16.1%$ |
| Other | 198 | 235 | 205 | $-15.8%$ | $-3.3%$ | 613 | 700 | $-12.4%$ |
| Small Enterprises | 217 | 204 | 210 | 6.5% | 3.4% | 631 | 634 | $-0.5%$ |
| Fiber | 53 | 19 | 36 | 174.2% | 46.8% | 121 | 43 | 178.8% |
| Other | 164 | 184 | 173 | $-11.1%$ | $-5.6%$ | 510 | 591 | $-13.7%$ |
| Wholesale Legacy | 81 | 87 | 89 | $-7.1%$ | $-9.3%$ | 258 | 324 | $-20.2%$ |
| Revenue Generating Units [RGU] - ['000] | 3.475 | 3.626 | 3.503 | $-4.2%$ | $-0.8%$ | 3.475 | 3.626 | $-4.2%$ |
| Fiber | 344 | 147 | 286 | 134.8% | 20.2% | 344 | 147 | 134.8% |
| Copper Voice | 2.884 | 3,121 | 2,943 | $-7.6%$ | $-2.0%$ | 2,884 | 3,121 | $-7.6%$ |
| Copper Broadband | 246 | 358 | 273 | $-31.2%$ | $-9.8%$ | 246 | 358 | $-31.2%$ |
Net revenues from continued operations in the B2B segment totaled R\$ 869 million in 3Q21, down 9.3% over 3Q20 and 1.5% lower than in 2Q21.
The Company closed 3Q21 with 3,475 thousand RGUs in the segment (-4.2% y.o.y. and -0.8% q.o.q.).
After the launch of the new brand "Oi Soluções", Oi positioned itself as an integrator and a provider of digital solutions for Telecommunications and IT (Information Technology) with customized and consulting services, offering a comprehensive portfolio of ICT (Information and Communication Technology) solutions.
Segment revenues are still impacted by the instability of the brazlian economic scenario, and the restrictions imposed by the COVID-19 pandemic. Data and Copper legacy revenues once again suffered contracts renegotiations with companies and governments who requested price reductions. IT revenues, which are the Company's focus for the segment's turnaround, showed sequential growth, but still timid, as the players of this market are still waiting for solid signs of an economic recovery to return to invest in telecom projects.
Net revenues from continued operations in the Oi Soluções segment totaled R\$ 571 million in 3Q21, down 14.5% over 3Q20 and 2.1% lower than in 2Q21. IT revenues from continued operations totaled R\$ 97 million in 3Q21 (- 10.8% y.o.y. and +2.4% q.o.q.). Data revenues totaled R\$ 275 million in the quarter (-14.8% y.o.y. and -2.6% q.o.q.). Legacy copper revenues totaled R\$ 198 million, maintaining the downward trend, down 15.8% y.o.y. and 3.3% q.o.q.
Net revenues from continued operations in the Small Enterprises segment totaled R\$ 217 million in 3Q21, up 6.5% over 3Q20 and 3.4% higher than in 2Q21. The increase fiber penetration was the main driver for the revenue growth in the Small Enterprises segment.
3Q14 Earnings Release The Company's strategy remais to maintain focus on extending penetration of fiber services as a network solution for small businesses. Oi continues to market regional offerings and intensify its sales initiatives together with FTTH and partnerships to monetize the segment.
According to the Strategic Plan for the next three years, the Company will focus on more simplified and attractive offers and services with higher speeds, therefore leveraging ARPU. Oi expects this business model will undergo major transformation due to greater digitization and analytics. In addition, OI is working on building a partnership ecosystem to offer services dedicated to the retail and small enterprises segments, such as digital marketing, online sales, security, vertical solutions, Oi Expert, and many other products.
The Wholesale segment is already in the transition phase of the structural separation process. As a result, the portion of its revenue that will integrate the V.tal in the future is allocated to the result of discontinued operations. Net revenues from continued operations in the Wholesale segment, which refers to revenues from copper infrastructure that will remain at Nova Oi, totaled R\$ 81 million in 3Q21 (-7.1% y.o.y. and -9.3% q.o.q.). This decline is related to the migration of customers to speeds faster than those regulated by ANATEL.
Since the last quarter of 2020, the Company started to disclose the UPIs provided in the Amendment to the JRP as discontinued operations, as they represent assets available for sale. Accordingly, in the previous sections, in terms of revenue, we sought to provide more details about the continued portion of the Company's business (Nova Oi). However, in order to facilitate the analysis of the market, in this section we are providing as supplementary information an overview of the Personal Mobility segment, which has now been included in the total revenue from discontinued operations.
The Company accumulated R\$ 1,568 million in net revenue from the Personal Mobility segment in 3Q21, down 5.2% over 3Q20. In the sequential comparison, this segment's net revenue increased 3.9%. The acceleration of customer migration from prepaid to postpaid, which has more profitable ARPU, contributed to this growth.
In postpaid, the Company increased its customer base to 13,111 thousand, an annual growth of 32.4% and 1.6% higher than the previous quarter. Postpaid revenue grew both in the sequential comparison (+5.1%), as well as in relation to 3Q20 (+4.7%).
Customer revenues (which exclude interconnection and handsets) from the Personal Mobility segment totaled R\$ 1,501 million in the quarter (-4.2% y.o.y. and +4.2% q.o.q.).
Network usage revenues totaled R\$ 54 million in 3Q21 (-6.5% y.o.y. and -4.7% q.o.q.).
The Company closed 3Q21 with 37,794 thousand RGUs in Personal Mobility, up 12.0% over 3Q20, or 4,056 thousand net additions, of which 3,212 thousand were addition in the postpaid segment and 844 thousand were additions in the prepaid segment. In the sequential comparison, the number of additions increased 1.3%, with a 1.1% growth in prepaid and a 1.6% growth in postpaid.
Oi's mobile customer base (Personal Mobility + B2B) totaled 40,702 thousand RGUs. 2,908 thousand of which in the B2B segment.
| R\$ million | 3021 | 3020 | 2021 | YoY | QoQ | 2021 | 2020 | YoY |
|---|---|---|---|---|---|---|---|---|
| Routine Operating Costs and Expenses | ||||||||
| Brazil | 3.020 | 3.212 | 3.063 | $-6.0%$ | $-1.4%$ | 9.349 | 9.455 | $-1.1%$ |
| Personnel | 553 | 602 | 530 | $-8.1%$ | 4.4% | 1,663 | 1,734 | $-4.1%$ |
| Interconnection | 95 | 113 | 97 | $-16.3%$ | $-2.3%$ | 288 | 343 | $-16.1%$ |
| Third-Party Services | 1.281 | 1,340 | 1,299 | $-4.4%$ | $-1.4%$ | 3,906 | 4,072 | $-4.1%$ |
| Network Maintenance Service | 187 | 216 | 200 | $-13.7%$ | $-6.9%$ | 593 | 669 | $-11.4%$ |
| Handset Costs/Other [COGS] | 19 | 28 | 16 | $-32.9%$ | 17.1% | 51 | 61 | $-15.9%$ |
| Marketing | 95 | 94 | 137 | 2.0% | $-30.5%$ | 334 | 230 | 45.1% |
| Rent and Insurance | 638 | 609 | 662 | 4.8% | $-3.7%$ | 1,948 | 1.762 | 10.6% |
| Provision for Contingencies | 32 | 65 | 31 | $-50.0%$ | 4.5% | 111 | 131 | $-15.2%$ |
| Provision for Bad Debt | 72 | 67 | 58 | 6.9% | 23.7% | 200 | 333 | $-39.8%$ |
| Taxes and Other Expenses [Revenues] | 48 | 78 | 32 | $-38.1%$ | 50.3% | 254 | 120 | 111.8% |
| International Operations | 40 | 32 | 42 | 25.3% | $-4.0%$ | 130 | 189 | $-31.4%$ |
| Routine OPEX | 3,060 | 3.244 | 3.104 | $-5.6%$ | $-1.4%$ | 9,479 | 9.645 | $-1.7%$ |
Consolidated operating costs and expenses, including international operations, totaled R\$ 3,060 million in 3Q21 (-5.6% y.o.y. and -1.4% q.o.q.).
Routine Opex from Brazilian operations amounted to R\$ 3,020 million in 3Q21 (-1.4% q.o.q and -6.0% y.o.y.).
As part of its transformation strategic plan, Oi continues to work on fronts related to cost reductions, simplification of operations, efficiency and digital transformation, preparing the Company to be lighter, more agile and focused on the customer's experience after this operational transition phase.
All of these initiatives were reflected in cost efficiency in the main lines that affect the Company's operation, such as Third Party Services and Network Maintenance Services, for example. On the other hand, this reduction was offset by cost increases related to efforts to commercial expansion (Marketing lines), especially in Fiber and Postpaid, in addition to seasonal inflation and FX variations on rental contracts, particularly in infrastructure for Rent and Insurance.
Personnel expenses totaled R\$ 553 million in 3Q21 (-8.1% y.o.y. and +4.4% q.o.q.). The main reason for the lower results in relation to the previous quarter was the cost of social charges related to the restructuring process, while the improvement in annual results was due to a reduction in provisions for the payment of variable remuneration related to operational, financial and quality goals set for 2021.
Interconnection costs in Brazilian operations amounted to R\$ 95 million in 3Q21 (-16.3% y.o.y. and stable compared to 2Q21). In the annual comparison, there was a reduction in costs with international roaming, in addition to a drop in traffic for fixed and mobile networks.
3Q14 Earnings Release Costs and expenses related to third-party services in Brazilian operations totaled R\$ 1,281 million in 3Q21 (-4.4% y.o.y. and -1.4% q.o.q.). The Company remains focused on cost reduction initiatives through automation and digitization, with a direct impact on the Customer Relations and Billing lines, as well as energy efficiency initiatives through the renewable energy matrix. In addition, contract renegotiations contributed to reducing these costs and expenses both year on year and quarter on quarter.
Network maintenance service costs and expenses totaled R\$ 187 million in 3Q21 (-13.7% y.o.y. and -6.9% q.o.q.). This reduction is mainly a result of the following factors: (i) our continuous efforts to increase efficiency in field operations, as well as process and customer service digitization. The growing use of the virtual technical troubleshooting application is a great example of cost reduction in this line: (ii) growth and expansion of the Fiber network, replacing the legacy network, which is older and deteriorated, and requires more repairs; and (iii) contractual renegotiations with certain suppliers, which allowed us to reduce maintenance costs.
Handset costs in Brazilian operations totaled R\$ 19 million in the second quarter (-32.9% y.o.y. and +17.1% q.o.q.). The drop in the annual comparison is explained by the increase in handset sales volumes in the previous year with the reopening of stores in 3Q20, when restrictions imposed by the first COVID-19 wave were reduced.
Marketing expenses totaled R\$ 95 million in 3Q21, increasing 2% over the same period in the previous year, which the Company resumed its advertising campaigns, which had been suspended or postponed since 2Q20 because of the pandemic. These expenses were 30.5% lower in the sequential comparison, mainly due to the early Mother's Day campaigns in the mobile segment and Fiber campaigns during 2Q21.
Rent and insurance expenses in Brazilian operations totaled R\$ 638 million in 3Q21 (+4.8% y.o.y. and -3.7% q.o.q.). This upturn in the annual comparison was mainly due to contractual adjustments by the IGP-M index in tower rental fees, as well as new expenses with tower rentals and data centers after the sale of two UPIs. In addition to the aforementioned reasons, the increase was also due to the rental capacity of EILD and FX variation on foreing currency contracts had a negative impact on rent expenses during this quarter.
The provision for contingencies in Brazilian operations totaled R\$ 32 million in the quarter (-50.0% y.o.y. and in line with the previous quarter). The drop was due to the increase in reversals for provisions, mainly for labor contingencies.
3Q14 Earnings Release The provision for bad debt totaled R\$ 72 million in 3Q21 (+6.9% y.o.y. and +23.7% q.o.q.). The changes in the annual and quarterly provisions were mainly in the retail segment, due to impacts in defaults observed due to the worsening of the country's macroeconomic scenario.
| 3021 | 3020 | 2021 | YoY | QoQ | 2021 | 2020 | YoY | |
|---|---|---|---|---|---|---|---|---|
| 01 S.A. | ||||||||
| Routine EBITDA [R\$ million] | 1,460 | 1.462 | 1.284 | $-0.2%$ | 13.7% | 3.883 | 4.354 | $-10.8%$ |
| Brazil | 1,443 | 1.437 | 1,271 | 0.5% | 13.6% | 3,843 | 4,382 | $-12.3%$ |
| International Operations | 17 | 26 | 13 | 35.6% | $-24.8%$ | 41 | $-28$ | 244.1% |
| Routine EBITDA Margin [%] | 32.3% | 31.1% | 29.3% | 1.2 p.p. | 3.0 p.p. | 29.1% | 31.1% | $-2.0 p.p.$ |
| Brazil | 32.3% | 30.9% | 29.3% | 1.4 p.p. | 3.0 p.p. | 29.1% | 31.7% | $-2.5 p.p.$ |
| International Operations | 29.3% | 44.6% | 24.2% | $-15.4 p.p.$ | 5.1 p.p. | 24.0% | $-17.7%$ | 41.6 p.p. |
| Non-routine Items (R\$ million) | $-62$ | 22 | $-13$ | n.m. | n.m. | 1,153 | 389 | n.m. |
| EBITDA [R\$ million] | 1.398 | 1.485 | 1,271 | $-5.9%$ | 10.0% | 5,037 | 4,743 | 6.2% |
| Brazil | 1.381 | 1.459 | 1.258 | $-5.4%$ | 9.8% | 4.996 | 4,490 | 11.3% |
| International Operations | 17 | 26 | 13 | $-35.6%$ | 24.8% | 41 | 253 | $-83.8%$ |
| EBITDA Margin [%] | 30.9% | 31.6% | 29.0% | $-0.6 p.p.$ | 2.0 p.p. | 37.7% | 33.9% | 3.8 p.p. |
Consolidated routine EBITDA totaled R\$ 1,460 million in 3Q21, in line with 3Q20 and up 13.7% over 2Q21.
Routine EBITDA from Brazilian operations totaled R\$ 1,443 million in 3Q21 (+0.5% y.o.y. and +13.6% q.o.q.). Routine EBITDA margin from Brazilian operations was 32.3%, increasing 1.4 p.p. over 3Q20 and 3.0 p.p. lower over 2Q21. The recovery in operating results and margin expansion were mainly the result of the strong and continuous growth in fiber revenues, the execution of the strict control and cost efficiency plan, in addition to the recovery in revenues for the personal mobility segment, which is currently part of the revenues from discontinued operations.
Routine EBITDA from international operations (Africa and East Timor) came to R\$ 17 million in 3Q21, versus R\$ 26 million in 3Q20 and R\$ 13 million in 2Q21.
Non-routine items in 3Q21 totaled R\$ 62 million and refer mainly to gains from the sale of assets and organizational restructuring.
| R\$ million | 3021 | 3020 | 2021 | YoY | QoQ | 2021 | 2020 | YoY |
|---|---|---|---|---|---|---|---|---|
| Capex | ||||||||
| Brazil | 1.812 | 2.005 | 1,883 | $-9.6%$ | $-3.8%$ | 5.555 | 5.536 | 0.3% |
| Fiber [1] | 1.302 | 1,390 | 1,318 | $-6.3%$ | $-1.2%$ | 3,946 | 3.584 | 10.1% |
| Copper | 149 | 200 | 207 | $-25.5%$ | $-28.0%$ | 529 | 670 | $-21.0%$ |
| DTH | 12 | 17 | 12 | $-29.2%$ | $-1.9%$ | 35 | 52 | $-31.2%$ |
| Mobile | 185 | 257 | 203 | $-27.9%$ | $-8.7%$ | 574 | 801 | $-28.3%$ |
| B 2 B | 164 | 141 | 144 | 16.5% | 14.2% | 470 | 429 | 9.4% |
| International Operations | 13 | 13 | 13 | $-3.9%$ | 0.0% | 29 | 40 | $-25.8%$ |
| Total | 1.825 | 2,018 | 1,896 | $-9.6%$ | $-3.8%$ | 5.584 | 5.576 | 0.2% |
(1) Includes Fiber + Wholesale.
The Company's consolidated Capex, including international operations, totaled R\$ 1,825 million in 3Q21 (-9.6% y.o.y. and -3.8% q.o.q.). Capex in Brazilian operations amounted to R\$ 1,812 million in 3Q21 (-9.6% y.o.y. and - 3.8% q.o.q.). In the year, investments totaled R\$ 5,555 million in the 9 months of 2021, practically in line with the same period in 2020. As a result, it is possible to observe that the reduction in the quarter was mainly due to the effect of the scheduling of investments, previously accelerated in the 1st semester.
The Company maintains its focus on its transformation plan in order to continue the expansion of the FTTH network in the country, bringing high-speed broadband to the customers' homes. Investments in Fiber totaled R\$ 1,302 million, which representes 72% of the total Capex for the quarter. Fiber investments in the last quarters has already shown results above expectations, being directly responsible for the accelerated operational turnaround process that we are seeing in the residential segment.
| R\$ million | 3021 | 3020 | 2021 | YoY | QoQ | 2021 | 2020 | YoY |
|---|---|---|---|---|---|---|---|---|
| 01 S.A. | ||||||||
| Routine EBITDA | 1,460 | 1,462 | .284 | $-0.2%$ | 13.7% | 3.883 | 4.354 | $-10.8%$ |
| Capex | 1,825 | 2,018 | 1,896 | $-9.6%$ | $-3.8%$ | 5.584 | 5,576 | 0.2% |
| Routine Operational Cash Flow [EBITDA - Capex] |
$-365$ | $-555$ | $-612$ | $-34.3%$ | $-40.4%$ | $-1.701$ | $-1.222$ | 39.2% |
| R\$ million | 3021 | 3020 | 2021 | YoY | QoQ | 2021 | 2020 | YoY |
|---|---|---|---|---|---|---|---|---|
| 01 S.A. | ||||||||
| Routine EBITDA | 1.443 | 1.437 | 1.271 | 0.5% | 13.6% | 3.843 | 4.382 | $-12.3%$ |
| Capex | 1.812 | 2.005 | .883 | $-9.6%$ | $-3.8%$ | 5.555 | 5.536 | 0.3% |
| Routine Operational Cash Flow [EBITDA - Capex) |
$-369$ | $-568$ | $-613$ | $-35.1%$ | $-39.8%$ | $-1.712$ | $-1.154$ | 48.4% |
3Q14 Earnings Release Consolidated routine operational cash flow (routine EBITDA minus Capex) was negative by R\$ 365 million in 3Q21, while routine operational cash flow from Brazilian operations was negative by R\$ 369 million. This result is on schedule and reflects the continuity of the FTTH expansion project, which requires heavy investments to ensure the implementation of the Company's transformation plan.
| R\$ million | 3021 | 3020 | 2021 | YoY | QoQ | 2021 | 2020 | YoY |
|---|---|---|---|---|---|---|---|---|
| Depreciation and Amortization | ||||||||
| Total | 1.087 | 1.740 | 1.015 | $-37.5%$ | 7.1% | 3.275 | 5.176 | $-36.7%$ |
Depreciation and amortization expenses totaled R\$ 1,087 million in 3Q21 (-37.5% y.o.y. and +7.1% q.o.q.). The decline in the annual comparison was basically due to the cessation of depreciation and amortization of assets classified as held for sale in December 2020, as required by IFRS standards.
| R\$ million | 3021 | 3020 | 2021 | 2021 | 2020 |
|---|---|---|---|---|---|
| Oi S.A. Consolidated | |||||
| Net Interest (on fin. investments and loans and financing) | $-809$ | -484 | $-545$ | $-1.919$ | $-1.510$ |
| Amortization of fair value adjustment | $-483$ | $-357$ | 58 | $-901$ | $-1.299$ |
| Net FX Result (on fin. investments and loans and financing) | $-1.224$ | $-440$ | 1.924 | $-675$ | $-3.766$ |
| Other Financial Income / Expenses | $-2.314$ | $-1.045$ | $-237$ | $-4.080.$ | $-5.353$ |
| Net Financial Income [Expenses] | $-4.830$ | $-2.325$ | 1.199 | $-7.576$ | $-11.928$ |
Oi S.A. recorded a consolidated net financial expense of R\$ 4,830 million in 3Q21, versus a net financial income of R\$ 1,199 million in 2Q21 and expense of R\$ 2,325 million in 3Q20. The reversal of the financial income in 3Q21 was mainly due to the negative impact of the depreciation of the real in 3Q21, versus the appreciation of the real in 2Q21. The "Other Financial Income/Expenses" line was impacted by the FX depreciation on onerous liabilities (contracts for data transmission via submarine cables and satellites), in addition to the monetary variation on contingencies. The "Net FX Result" line came in as a financial expense in 3Q21 due to the 8.74% depreciation of the real against the U.S. dollar in the period, compared to a 12.20% appreciation in the previous quarter. In turn, the "Net Interest" line rose due to disbursements made in the quarter, higher interest rates on debts linked to foreign currency due to the weaker Real, as well as increases in CDI and IPCA rates in the period.
In the annual comparison, consolidated net financial expenses increased due to the 8.74% depreciation of the real against the U.S. dollar in 3Q21 compared to a depreciation of 3.01% in 3Q20, resulting in higher financial expenses under the "Other Financial Income/Expenses" and "Net FX Result" lines. Finally, the "Net Interest" line also increased in the sequential and annual comparison periods, mainly due to disbursements during the period arising from higher interest accrued on debt in foreign currency and the increase in the CDI rate.
| R\$ million | 3021 | 3020 | 2021 | YoY | QoQ | 2021 | 2020 | YoY |
|---|---|---|---|---|---|---|---|---|
| Net Earnings [Loss] | ||||||||
| Earnings before interest and taxes [EBIT] | 310 | $-255$ | 256 | n.m. | n.m. | 1.762 | $-433$ | $-507.0%$ |
| Financial Results | $-4.830$ | $-2.325$ | 1,199 | n.m. | $-502.9%$ | $-7.576$ | $-11.928$ | n.m. |
| Income Tax and Social Contribution | $-292$ | $-315$ | n.m. | n.m. | -900 | 34 | n.m. | |
| Consolidated Net Income [Loss] | $-4.811$ | $-2.580$ | 1,139 | 86.5% | $-522.4%$ | $-6.714$ | $-12.327$ | n.m. |
| attributable to owners of the Company | $-4.813$ | $-2.638$ | 1.139 | 82.4% | $-522.5%$ | $-6.711$ | $-12.328$ | n.m. |
| attributable to non-controlling interests | 59 | 0 | n.m. | 349.1% | -3 | n.m. |
The Company's operating results before the financial result and taxes (EBIT) was R\$ 310 million, versus a negative result of R\$ 255 million in 3Q20 and a positive result of R\$ 256 million in 2Q21. In the quarter, the Company recorded a negative result of R\$ 4,830 million and an expense of R\$ 292 million in the Income Tax and Social Contribution line, resulting in a consolidated net loss of R\$ 4,811 million.
| R\$ Million | Sep/21 | Sep/20 | Jun/21 | % Gross Debt |
|---|---|---|---|---|
| Debt | ||||
| Short Term | 2,960 | 195 | 6,401 | 8.7% |
| Long Term | 31.072 | 26,734 | 22.715 | 91.3% |
| Total Debt | 34,031 | 26,929 | 29,116 | 100.0% |
| Local Currency Exposure | 14.884 | 9,300 | 12,418 | 43.7% |
| Foreign Currency Exposure | 19,164 | 17,628 | 16,669 | 56.3% |
| Swaps | $-17$ | 0 | 29 | 0.0% |
| [-] Cash | $-4.132$ | $-5.686$ | $-3.421$ | $-12.1%$ |
| $\left[-\right]$ Net Debt | 29,899 | 21.243 | 25,695 | 87.9% |
Oi S.A. ended with consolidated gross debt of R\$ 34,031 million in 3Q21, increasing by R\$ 4,915 million, or 16.9%, in relation to 2Q21. Compared to 3Q20, debt increased by 26.4%, or R\$ 7,103 million. The increase in the sequential comparison was due to the 8.74% depreciation of the real against the U.S. dollar in 3Q21 and the accrual of interest and amortization on fair value adjustment. As well for the disbursements made in the period, for the issue of the 2 nd Private Debenture, in the amount of R\$ 2.0 billion, and the Senior Bond, in the amount of US\$ 880 million, both at Oi Móvel. The debenture issue was provided in the Judicial Reorganization Plan and serves as a bridge loan, which must be prepaid upon the conclusion of the sale of UPI Móvel. A large portion from the proceeds of the Senior Bond were used to prepay the 1st Private Debenture Issue of Oi Móvel, which matured in January 2022. For this instrument, Oi Móvel must launch a repurchase offer after the conclusion of the sale of UPI Móvel, and each bondholder may adhere to the offer at their sole discretion. In 3Q21, the Company amortized R\$ 4,245 million, which includes the prepayment of the 1st Private Debenture Issue previously mentioned and interest on the Qualified Bond. The increase in indebtedness year on year is
3Q14 Earnings Release mainly related to disbursements made in the period. In addition to the debts detailed above, there was the issue of InfraCo's private debenture in the amount of R\$2.5 billion, which should be prepaid in cash-in from the proceeds from the sale of control of this company.
At the end of 3Q21, debt in foreign currency accounted for 53.5% of fair value debt, with a consolidated average duration of approximately 8 years in the quarter. The Company closed 3Q21 with a consolidated cash position of R\$ 4,132 million, 20.8% higher than in 2Q21 and 27.3% lower than in 3Q20. As a result, net debt totaled R\$ 29,899 million in 3Q21, 16.4% higher than in 2Q21, mainly due to higher gross debt in the period. The increase in the cash position in the quarter was mainly due to the disbursements already mentioned, partially offset by the maintenance of the Capex level, in line with the Company's strategic plan, half-yearly interest on the Qualified Bond and the prepayment of the 1st debenture issued by Oi Móvel in January 2020.
| Gross Debt Breakdown - 3021 | Face Value | Fair Value Adjustment |
Fair Value |
|---|---|---|---|
| BNDES | 4.496 | 4,496 | |
| Local Banks | 9,553 | [3, 937] | 5,616 |
| ECAs | 9.363 | [4,938] | 4.425 |
| Qualified Bonds | 9.156 | (698) | 8,458 |
| Facility "Non Qualified" | 543 | [145] | 398 |
| General Offering | 6,034 | [4, 921] | 1,113 |
| V.Tal Convertible Deb. | 2.726 | ٠ | 2,726 |
| Mobile Bridge Loan | 2.069 | 2.069 | |
| Bonds 2026 | 4.904 | 4.904 | |
| Other | [174] | [174] | |
| Total Gross Debt | 48,671 | [14, 639] | 34,031 |
| 2021 Cash Position | 3,421 |
|---|---|
| Routine EBITDA | 1.443 |
| IFRS16 | $-539$ |
| Capex | $-1.812$ |
| Working capital | $-459$ |
| Onerous liability | $-305$ |
| Judicial Deposits + Taxes | 75 |
| Bond 2026 | 4.465 |
| Mobile Bridge Loan | 2,000 |
| Oi Móbile Debenture | $-3.768$ |
| Financial operations | $-25$ |
| Payments to Creditors JR | -435 |
| Non Core | 72 |
| 3021 Cash Position | 4.132 |
| R\$ million | 3021 | 3020 | 2021 | 2021 | 2020 |
|---|---|---|---|---|---|
| Net Operating Revenues | 4.520 | 4.706 | 4.389 | 13,362 | 13,998 |
| Operating Costs and Expenses | $-3,123$ | $-3.221$ | $-3,118$ | $-8,326$ | $-9.256$ |
| Personnel | $-564$ | $-615$ | $-544$ | $-1,700$ | $-1,771$ |
| Interconnection | $-96$ | $-115$ | $-98$ | $-291$ | $-346$ |
| Third-Party Services | $-1.294$ | $-1.357$ | $-1.314$ | $-3.948$ | $-4.120$ |
| Network Maintenance Service | $-187$ | $-217$ | $-201$ | $-594$ | $-670$ |
| Handset Costs/Other [COGS] | $-21$ | $-33$ | $-19$ | $-60$ | $-73$ |
| Marketing | $-96$ | $-94$ | $-138$ | $-337$ | -232 |
| Rent and Insurance | $-645$ | $-613$ | $-668$ | $-1.965$ | $-1,775$ |
| Provision for Contingencies | $-57$ | $-65$ | $-31$ | $-136$ | $-128$ |
| Provision for Bad Debt | $-73$ | $-67$ | $-58$ | $-202$ | $-333$ |
| Taxes and Other Revenues [Expenses] | $-90$ | $-45$ | $-47$ | 905 | 194 |
| EBITDA | 1.398 | 1.485 | 1.271 | 5.037 | 4.743 |
| Margin % | 30.9% | 31.6% | 29.0% | 37.7% | 33.9% |
| Depreciation and Amortization | $-1.087$ | $-1,740$ | $-1.015$ | $-3.275$ | $-5.176$ |
| EBIT | 310 | $-255$ | 256 | 1,762 | $-433$ |
| Financial Expenses | $-4,817$ | $-2,402$ | 1.159 | $-7,788$ | $-12,705$ |
| Financial Income | $-12$ | 77 | 40 | 213 | 777 |
| Net Earnings [Loss] Before Tax and Social Contribution | $-4.520$ | $-2.580$ | 1.454 | $-5.814$ | $-12.361$ |
| Income Tax and Social Contribution | $-292$ | 1 | $-315$ | $-900$ | 34 |
| Consolidated Net Earnings [Loss] | $-4.811$ | $-2.580$ | 1.139 | $-6.714$ | $-12.327$ |
| Margin % | $-106.4%$ | $-54.8%$ | 26.0% | $-50.2%$ | $-88.1%$ |
| Profit [Loss] attributed to the controlling shareholders | $-4.813$ | $-2,638$ | 1,139 | $-6,711$ | $-12,328$ |
| Profit [Loss] attributed to the non-controlling shareholders | $\mathbf{1}$ | 59 | 0 | $-3$ | 1 |
| 3Q14 Earnings Release | ||
|---|---|---|
| TOTAL LIABILITIES | 75,529 | 74.894 | 72,664 |
|---|---|---|---|
| Current | 15,507 | 18,876 | 12.136 |
| Suppliers | 4.655 | 5.111 | 4.684 |
| Leases | 1,988 | 1.941 | 1,671 |
| Loans and Financing | 2.976 | 6,372 | 195 |
| Credit Assignment - Sistel | 197 | 197 | 197 |
| Financial Instruments | 4 | 37 | 0 |
| Payroll and Related Accruals | 727 | 709 | 942 |
| Provisions | 873 | 546 | 667 |
| Payable Taxes | 11 | 11 | 16 |
| Other Taxes | 1.904 | 1.829 | 1.511 |
| Dividends Payable | 21 | 20 | 6 |
| Liabilities associated to held-for-sale assets | 30 | 30 | 159 |
| Authorizations and Concessions Payable | 58 | 54 | 78 |
| Other Accounts Payable | 2.063 | 2.020 | 2.011 |
| Non-Current Liabilities | 58.944 | 50.142 | 54.526 |
| Suppliers | 3.607 | 3.453 | 3.943 |
| Leases | 8.243 | 8.081 | 7.017 |
| Loans and Financing | 31,072 | 22,715 | 26,734 |
| Credit Assignment - Sistel | 33 | 82 | 230 |
| Payable and Deferred Taxes | 878 | 588 | 0 |
| Other Taxes | 1.320 | 1.318 | 1.375 |
| Contingency Provisions | 4.519 | 4.904 | 4.542 |
| Pension Fund Provision | 779 | 752 | 675 |
| Other Accounts Payable | 8,493 | 8.248 | 10,011 |
| Shareholders' Equity | 1.079 | 5.876 | 6.003 |
3Q14 Earnings Release For accounting purposes, the UPIs set forth in the Amendment to the Judicial Reorganization Plan (Mobile Asset UPI, InfraCo UPI, TVCo UPI and Data Center UPI) are classified as discontinued operations, as they represent assets available for sale. Accordingly, following accounting rules, the Financial Statements presented in the Quarterly Information (ITR) refer only to the Company's continued operations.
To facilitate the analysis of the evolution of the Company's results, in line with the information usually disclosed in previous years, the table below presents a restatement of the consolidated information, which comprises the sum of the results from continued and discontinued operations. For comparison purposes, this Press Release uses the consolidated information in its analysis. For more information, please refer to note 30 of the Quarterly Information (ITR).
It is worth noting that the result of continued operations considers the businesses that will be sold not to be part of the result of the operations on the reporting dates, as it segregates the result of the UPIs that will be sold. This should not be used as an approximation of the Company's results after the completion of the sale of the UPIs. The statement is an accounting document and does not consider all the changes that will happen in the Company's operation and business during its ongoing transformation process.
| R\$ million | 3021 | ||||
|---|---|---|---|---|---|
| Consolidated | Discontinued Operations |
Continued Operations |
|||
| Net Operating Revenues | 4.520 | 2.277 | 2.244 | ||
| Operating Costs and Expenses | $-3.123$ | $-1.346$ | $-1.777$ | ||
| Personnel | $-564$ | $-106$ | $-458$ | ||
| Interconnection | $-96$ | $-59$ | $-37$ | ||
| Third-Party Services | $-1.294$ | $-649$ | $-645$ | ||
| Network Maintenance Service | $-187$ | $-80$ | $-108$ | ||
| Handset Costs/Other [COGS] | $-21$ | $-19$ | -3. | ||
| Marketing | $-96$ | $-15$ | $-81$ | ||
| Rent and Insurance | $-645$ | $-327$ | $-318$ | ||
| Provision for Contingencies | $-32$ | 1. | $-33$ | ||
| Provision for Bad Debt | $-73$ | $-60$ | $-13$ | ||
| Taxes and Other Revenues [Expenses] | $-114$ | $-32$ | -83 | ||
| EBITDA | 1.398 | 931 | 467 | ||
| Margin % | 30.9% | 40.9% | 20.8% | ||
| Depreciation and Amortization | $-1.087$ | 0 | $-1.087$ | ||
| EBIT | 310 | 931 | $-621$ | ||
| Financial Income | $-12$ | 22 | $-35$ | ||
| Financial Expenses | $-4.817$ | $-597$ | $-4.221$ | ||
| Net Earnings [Loss] Before Tax and Social Contribution | $-4,520$ | 357 | $-4,876$ | ||
| Income Tax and Social Contribution | $-292$ | $-291$ | $-1$ | ||
| Consolidated Net Earnings [Loss] | $-4.811$ | 66 | $-4.878$ |
3Q14 Earnings Release CVM INSTRUCTION 358, ARTICLE 12: Direct or indirect controlling shareholders and shareholders who elect members of the Board of Directors or the Fiscal Council, and any other individual or legal entity, or group of persons, acting as a group or representing the same interests, that attains a direct or indirect interest representing five percent (5%) or more of a type or class of shares of the capital of a publicly held company, must notify the Brazilian Securities and Exchange Commission (CVM) and the Company of the fact, in accordance with the above article.
Oi recommends that its shareholders comply with the terms of article 12 of CVM Instruction 358, but it takes no responsibility for the disclosure or otherwise of acquisitions or disposals by third parties of interests corresponding to 5% or more of any type or class of its shares, or of rights over those shares or other securities that it has issued.
| Total | 6.598.224.091 | 645.831.854 | 5,951,639,725 |
|---|---|---|---|
| Preferred | 157.727.241 | 1,811,755 | 155,915,485 |
| Common | 6.440.496.850 | 644,020,099 | 5.795.724.240 |
| Capital | Treasury | Free-Float 1 |
Shareholding position as of September 30, 2021.
(1) The outstanding shares do not consider treasury shares of the shares held by the Board of Directors and by the Executive Board.
The main tables in this Earnings Release will be available in Excel format in the "Financial Information/Quarterly Reports" section of the Company's website (www.oi.com.br/ri).
Definitions of the terms used in the Earnings Release are available in the Glossary section of the Company's website: https://ri.oi.com.br/glossario/
Rio de Janeiro - November 10, 2021. This report includes consolidated financial and operating information for Oi S.A. - Under Judicial Reorganization ("Oi S.A." or "Oi" or "Company") and its direct and indirect subsidiaries as of March 31, 2020. In compliance with CVM instructions, the information is presented in accordance with International Financial Reporting Standards (IFRS). Due to the seasonality of the telecom sector in its quarterly results, the Company will focus on comparing its financial results with the same period of the previous year.
This report contains projections and/or estimates of future events. The projections contained herein were compiled with due care, taking into account the current situation, based on work in progress and the corresponding estimates. The use of terms such as "projects", "estimates", "anticipates", "expects", "plans", "hopes" and so on is intended to indicate possible trends and forward-looking statements, which, clearly, involve uncertainty and risk, so that future results may differ from current expectations. These statements are based on various assumptions and factors, including economic, market, industry conditions, and operational factors. Any changes to these assumptions or factors may lead to practical results that differ from current expectations. Excessive reliance should not be placed on these statements.
Forward-looking statements relate only to the date on which they are made, and the Company is not obliged to update them as new information or future developments arise. Oi takes no responsibility for transactions carried out or investment decisions taken on the basis of these projections or estimates. The financial information contained herein is unaudited and may therefore differ from the final results.
Marcelo Ferreira +55 (21) 3131-1314 [email protected]
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