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 Business News | October 2007 
Mexico's Telmex 3rd-Qtr Net Profit Up 38%
 Chris Aspin - Reuters
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Mexico City – Telmex, Mexico's dominant fixed-line phone company, posted a better-than-expected 38 percent rise in third-quarter net profit, helped by a one-time charge in the year-ago period and solid growth in Brazil.
Telmex said on Monday its July-September net profit was 9.3 billion pesos ($851 million). In a Reuters survey, analysts forecast Telmex would report a net profit of 7.842 billion pesos.
In the third quarter of 2006, the company's Brazil unit paid a nonrecurrent charge of 515 million real, about $286 million, or about one-third of net profit in peso terms.
Revenue rose 2.1 percent to 48.146 billion pesos and core earnings before interest, taxes, depreciation and amortization (EBITDA) jumped 11 percent to 20.483 billion pesos.
Both revenue and EBITDA were in line with expectations. In the Reuters survey, analysts forecast Telmex revenue of 46.671 billion pesos and EBITDA of 19.535 billion pesos.
Telmex is controlled by billionaire tycoon Carlos Slim.
Telmex's Mexico market continued to be weak, with the number of lines in service dropping 45,000 in three months from the end of June, a mixture of new competition and the cutting off of nonpaying customers.
But Telmex's Brazil operations shone, with the number of lines in service rising 31.5 percent from the same quarter in 2006.
"The net profit increase is mainly from the absence of the charge but what I like most is the growth in Brazil," said one analyst who declined to be named.
Revenues in its Brazil unit climbed 5.8 percent in the quarter while total costs in Brazil dropped 21 percent.
Before Telmex reported its third quarter-results, its shares ended up 2.41 percent on the Mexican stock exchange at 20.36 pesos, not far from 12-month highs. Its American Depositary Receipts ended 2.13 percent higher at $37.46.
Telmex operates in Mexico, Brazil, Chile, Colombia, Peru, Uruguay and Argentina.
($1 = 10.926 pesos at end September.) |
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