Telefónica Brasil (VIVT3) recently published its fourth quarter financial results for 2024, demonstrating solid gains and strategic movements aimed at shareholder value. The company reported impressive net profits and growth metrics, marking significant advancements over the past year.
For the fourth quarter of 2024, Telefónica Brasil recorded a net profit of R$ 1.76 billion, representing a notable 10.1% increase compared to the same period in 2023. This figure exceeded market expectations, as analysts had projected earnings around R$ 1.7 billion. The total revenue for the quarter reached R$ 14.6 billion, reflecting a 7.7% rise year-on-year. A significant contributor to this positive outcome was the growth observed within the post-paid mobile telephony segment, which spiked by 9.1%, indicating strong performance amid fierce competition.
Christian Gebara, the CEO of Telefónica Brasil, emphasized the robustness of their mobile segment during discussions with Valor. He noted, "Out of R$ 9.2 billion [in mobile phone revenue], R$ 7.8 billion came from control and post-paid plans, demonstrating the recurring relationship we have with these customers. Although we remain leaders in pre-paid services, these customers represent a smaller share of our total mobile income." This focus on post-paid plans not only drives revenue but also strengthens customer loyalty.
Alongside these impressive financial results, Telefónica also announced the initiation of a new share buyback program, seeking to repurchase up to 34,676,589 ordinary shares. Set to commence on January 26, 2025, and concluding on February 25, 2026, this program is intended to bolster the company’s share value and demonstrates management's confidence in future growth. The allocated budget for this buyback stands at R$ 1.75 billion.
The new buyback program follows the conclusion of the previous one, which saw the acquisition of nearly 30 million ordinary shares. Such actions are part of Telefónica's broader strategy to optimize capital allocation and increase shareholder value effectively. This approach signals to investors not only the company's healthy operational prowess but also its commitment to return value to shareholders.
During the same financial disclosure, the company reported EBITDA (earnings before interest, taxes, depreciation, and amortization) of R$ 6.19 billion for Q4 2024, exhibiting growth of 7.8% compared to Q4 2023. The EBITDA margin showed stability, remaining at 42.5%. This strong EBITDA performance reflects continual efficiency optimization efforts within the company.
The expansion of the company's customer base was also highlighted, with Telefónica Brasil achieving its highest customer count ever, totaling 116.1 million accesses by the end of 2024. This includes over 102 million mobile accesses, underscoring the effectiveness of its service offerings.
Market analysts have reacted positively to Telefónica’s results, with JPMorgan recently upgrading the stock from 'sell' to 'neutral', citing potential upward momentum fueled by strategic transitions, including the recent migration of fixed-line telephony concessions to authorization. They anticipate incremental benefits for the company going forward, particularly from new revenue streams.
Despite this adjustment, comparisons with competitors remain prevalent, as JPMorgan has indicated its preference for TIM (TIMS3) due to more attractive valuations and growth forecasts. The telecom industry remains fiercely competitive, and it will be interesting to see how Telefónica navigates these challenges moving forward.
Analysts project continued interest from investors, particularly those focusing on high-yield stocks and growth potential. The confidence exhibited by Telefónica Brasil through its quarterly performance and shareholder initiatives positions it as a significant player within the telecommunications sector. With expectations of maintaining or exceeding payout ratios moving forward, as stated by management, the outlook for the company remains optimistic.
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