Tele Norte Leste posts US$8.4mn losses

Brazilian telecom holding company Tele Norte Leste (NYSE: TNE) posted a net loss of 24mn reais (US$8.4mn) for the third quarter, compared to a loss of 382mn reais in 3Q02, as revenue soared, the company reported Thursday. "The results were good, due to a good increase in revenues," said Rodrigo Magela, an analyst at Brazil's Banco Pactual. "The results would have been better without the contingencies," he said, referring to provisions of 83mn reais for legal claims and 160mn reais for bad debts. TNL, which controls fixed line operator Telemar and wireless unit Oi, saw net revenues rise to 3.77bn reais, up 22.3% from 3Q02, while EBITDA was 1.66bn reais, up 29.4% from 3Q02. Operating costs were 2.1bn reais, up 17.2% from 3Q02. Total lines reached 15 million at the end of September, up 1.2% from the previous quarter and stable from the same period of the prior year. The tariff hike in June pushed wireline subscriber average revenues (ARPU) to 78 reais, up 12.1% from 2Q03. Mobile unit Oi reached 2.85 million subscribers at the end of the quarter, up 27.4% from the end of 2Q03, but the company reported on October 27 that it has passed the three million mark and aims to reach 3.6 million by year-end. Oi's customer spending fell to an average of 29 reais a month, down 12.4% from 2Q03, due to the introduction of the new bill & keep regulatory system, where users choose their long distance carrier. The company invested 290mn reais during the quarter, of which 80% went to the fixed line business and 20% to the wireless business. Net debt was 8.66bn reais, down 3.9% from 3Q02. On Thursday afternoon, TNL's American depositary receipts (ADRs) on the New York stock exchange were trading at US$14.37 apiece, down 0.9% from Wednesday's close.