Financial Data and Key Metrics Changes - The consolidated routine EBITDA totaled BRL1.2 billion in Q1 2022, representing an 18.1% reduction compared to Q4 2021 but an improvement of 8.1% year-over-year [33] - Routine OpEx increased by 4.4% over the last quarter but reduced by 3.2% year-over-year, indicating a real reduction of 18.5% when considering inflation [32][34] - The EBITDA margin increased by 2.2 percentage points year-over-year, primarily due to cost discipline [33] Business Line Data and Key Metrics Changes - The fiber business continued to grow, albeit with a slight deceleration as internal processes were adjusted for better customer acquisition management [14][15] - The B2B segment saw stable revenues, with ICT services growing at a double-digit rate of 24%, while core telecom revenues remained stable [22] - The fixed telephony business focused on sustainability, disconnecting 1,300 unsustainable central offices in the quarter [9] Market Data and Key Metrics Changes - Oi has covered more than 50% of Brazil's GDP and 42% of the population, leading in fiber access in 17 states with over 30% market share in areas served [17][18] - The residential business showed a slight revenue decline of 1.8% in Q1 2022, but there are expectations for a return to growth [80] Company Strategy and Development Direction - The company is focusing on a transformation plan that emphasizes fiber business and divestment of non-core assets, including the successful sale of V.tal [5][6] - Oi aims to enhance customer experience through digital transformation and improved analytics, targeting a more efficient operational model [11][12] - The company is also expanding its renewable energy investments, aiming for 80% of energy from renewable sources by the end of the year [46] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the future growth trajectory post-V.tal transaction, expecting to accelerate fiber connection growth with reduced cash consumption [27][52] - The competitive environment in the FTTH market remains challenging, but management believes that recent changes will allow for more rational competition [76] Other Important Information - The company ended the quarter with a consolidated cash position of almost BRL2 billion, a reduction of 39% compared to Q4 2021 [40] - The company has made significant progress in its cost reduction program, achieving 94% of its annualized cost reduction target of BRL1 billion [38] Q&A Session Summary Question: Confirmation of Oi's final stake on EBITDA and expectations for net financial expenses - Management confirmed that the target EBITDA stake is 34.7% with no expected adjustments in the near term [56] - Net financial expenses for 2023 are expected to be around BRL1 billion annually, depending on debt prepayment and exchange rates [57] Question: Operational margins and profitability outlook - Management aims for EBITDA margins above 20% in the long run, with expectations of 15% to 20% during the ramp-up phase [60] Question: CapEx expectations and debt repayment - CapEx in Q1 is indicative of future quarters, with a focus on fiber rollout and reduced cash needs due to the new operational model [63] - Discussions regarding the repayment of banks and ECA debt are ongoing, with more information expected in the coming months [62] Question: Update on the sale of pay-TV operations and cash payments - The sale of TV assets to Sky is in final discussions, with expectations that cash inflow will offset satellite costs [67][75] Question: Impact of transitioning from concession to authorization on EBITDA margins - Transitioning is expected to improve EBITDA margins, with potential increases to the 20%-25% range [71] Question: Fiber business growth expectations and market conditions - Management anticipates a return to growth in the fiber business, with adjustments already leading to reduced churn and improved sales [80]
Oi(OIBZQ) - 2022 Q1 - Earnings Call Transcript