Despite disappointing financial results, which fell far short of analysts? expectations, Telesp Celular Participações (TCP) wasn?t badly punished by the São Paulo Stock Exchange (Bovespa) on Wednesday, February 19. The preferred (nonvoting) stock closed on 3.21 Brazilian Reals per 1,000 shares, down 1.53% for the day. An earlier announcement had warned investors that extra allowance would have to be made for acquisition of the 17% Telesp didn?t already own in Global Telecom, but what it reported was actually worse: charges of 266.7m BRL relating to derivatives and a net loss of 580m BRL in the fourth quarter, bringing the overall loss in 2002 to 1.114bn BRL. Analysts had expected a small profit in the year.
The fact is that Telesp Celular is healthy in operating terms. Net revenue (3.39bn BRL) rose 15.1% in 2002, and EBITDA totaled 1.45bn BRL for a margin of 42.8%, beating expectations. The telco has 6.06m subscribers in São Paulo State alone, where it has so far been pleasantly surprised to find Telecom Italia Mobile (TIM) less aggressive a competitor than foreseen.
TCP?s short-term debt totaled 2.068bn BRL at end-2002. It intends to reduce this by about 1bn BRL with cash generated from operations. The rest will be rolled over via bank loans and 700m BRL in commercial paper to be issued by the end of this month.
