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Vivo (VIVT3) practically doubles earnings in the fourth quarter, with tax credit, dividend and equity reports

Vivo (VIVT3) practically doubles earnings in the fourth quarter, with tax credit, dividend and equity reports

a vivo (fift 3) reported net income of R$2.628 billion on the balance sheet for the fourth quarter, an increase of 103% year-over-year.

According to the company, the result is mainly due to the recognition of a tax credit of R$1.408 billion, referring to the STF’s decision that the occurrence of IRPJ and CSLL was unconstitutional on Selic rate corrections received due to tax returns. Incorrectly collected.

Recurring earnings before interest, tax, depreciation and amortization (Ebitda) grew 1.2% compared to the same period in 2020, totaling R$4.933 billion.

According to Telefônica, the good performance reflects the 3.2% year-over-year expansion in mobile revenue and continued control over operating costs.

Ebitda’s recurring margin was 42.9% in the fourth quarter of 21, down 0.7 points compared to the same quarter of 2020.

Revenue and EBITDA

Total net revenue was R$11.501 billion in Q421, an increase of 2.8% over the same period in the previous year.

Core business represented 90.6% (+2.7 pp) of total revenue and posted a +6.0% year-over-year revenue increase in Q4 of 21.

Net mobile revenue grew 3.7% YoY in Q421 due to higher revenue from services and mobiles.

Vivo’s Mobile Business Operational Performance

vivo balance

More data from Vivo’s balance sheet (VIVT3)

The financial result recorded a net expense of R$400 million, due to higher indebtedness related to contracts recognized as leasing under IFRS 16, and lower financial restatements of tax credits.

Free cash flow after lease payment was R$737 million in Q421, an increase of 4.1% year over year due to higher recurring EBITDA, a slight decrease in the level of investments, as well as lower lease payments in the period.

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Indebtedness and investments

The company’s total debt amounted to R$5.950 billion at the end of Q421, with an increase arising from the financial liability associated with the 5G licenses obtained at the ANATEL auction. Looking at cash, investments and derivatives, Telefônica recorded a net cash of R$541 million for the year.

Investments in Q421, excluding licenses, amounted to R$2.339 billion between October and December 2021, representing 20.3% of the quarter’s net revenue.

Investments have been directed towards strengthening the mobile network and expanding the fiber network, ensuring greater availability of Vivo services in light of the growing demand for high-quality communications.

Vivo (VIVT3): Dividend Table and JCP

Besides the balance sheet, the operator’s board of directors decided to add interest on shareholders’ equity and dividends in a total amount of R$6.264 billion for the fiscal year 2021, bringing the dividend to 101% and dividend yield 7.7% per year.

Proceeds will be attributed to the minimum mandatory dividend for fiscal year 2021, subject to advice from the general meeting of shareholders to be held on April 26, 2022, and the payments will be made as shown in the following table, wherein the amounts are also flagged per share distributed.

Vivo (VIVT3): Dividend Table and JCP
Vivo (VIVT3): Dividend Table and JCP

Share buy back

Telefónica Board of Directors (fift 3Agree to create a buy-back program for up to 42,383,420 of its common stock.

The program is valid until February 22, 2023.

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