Oi (OIBR3) reverses losses, posts net profit of R$15 billion in Q2

Oi (OIBR3), in judicial recovery, presented a net profit of R$15 billion in its balance sheet for the second quarter of 2024, reversing a loss of R$845 million in the same period of 2023.

The shift is due to the approval of the company’s judicial recovery plan in April. This plan has reduced the operator’s debt by about 70% through discounts, installments and converting the amounts into shares.

This move generated an accounting profit of R$14.7 billion (without impact on cash) for the company. This gain was reflected in the financial results line (balance between income from financial investments and loan expenses), which was positive at R$15.6 billion.

In contrast, other financial and operational indicators still show a harsher reality for the company.

EBITDA (earnings before interest, taxes, depreciation and amortization) reported in the second quarter was negative at R$318 million, a reversal from a positive figure of R$42 million from the previous year.

“Routine” EBITDA was negative at R$83 million, while it was positive the previous year at R$133 million. The “routine” criterion excludes items that are considered non-recurring. In this case, the company had a negative impact of R$234 million due to the non-litigation agreement with V.tal.

Total consolidated net revenues amounted to R$2.1 billion, down 12.6%. Revenues were impacted by a 23.1% decrease in non-strategic revenues to R$575 million. This includes legacy services that have become obsolete (such as fixed telephony and satellite pay TV).

However, revenue declines were also observed in business divisions considered strategic. Revenue from the corporate communications and IT arm (Oi Soluções) fell by 23.0% to R$449 million. Revenue from the broadband division (Oi Fibra) contracted by 0.9%, to R$1.094 billion.

Total routine costs and expenses amounted to R$2.2 billion, down 4%, driven by the company's restructuring. This resulted in a reduction in staff and a reduction in network maintenance expenses, among other points.

Oi reported that it had a cash consumption of R$226 million in the quarter and that investments of R$137 million were made.

With the approval of the recovery plan, the telecom company reached the end of the second quarter of 2024 with a net debt of R$6.6 billion, a volume 74% lower in the annual comparison.