February 21, 2024

Oi has a loss of R$1.25 billion and lays off 2,600 employees

Oi reported a loss of R$1.26 billion in the first quarter of 2023. A year ago, with mobile assets and Infraco in the group, it posted a profit of R$1.62 billion. The value rose after positive financial results at the time due to the sale of assets, such as the Infraco chip and mobile unit. The data is included in the company’s results for the first quarter of this year filed today, the 14th, to CVM.

Despite the loss in this period, the company, which is undergoing judicial recovery, has grown in the part where it is betting on its future. The figures show a 21% growth in revenue from optical fiber, which amounted to R$1.1 billion.

The company ended March with 4 million fiber customers, up 13% from the same quarter in 2022. Average Revenue Per User (ARPU) increased 5% to R$92.4. Despite the expansion in the number of customers, Oi has grown smaller in the broadband market, which has reduced its market share. This decreased from 19.1% in March 2022 to 17.9% in March 2023.

Fiber revenue equals half of Nova Oi’s total revenue, which combines the fixed-line franchise and corporate arm Oi Soluções, ignoring assets sold in 2022, with the cellular unit. Thus, Nova Oi has inflows of R$ 2.22 billion, an increase of 4.8% in the annual comparison.

Oi Soluções earned R$701 million, up 12.9% year-on-year. The landline franchise continues to shrink. It lost 47.2% of revenue, and achieved R$ 312 million in the first quarter of this year. Serede, the group’s infrastructure implementation company that provides fiber installation service to V.tal, generated revenues of R$112 million – previously considered a B2B transaction and, with the restructuring, began to show in the company’s revenues and expenses.

At the same time, as a user of V.tal’s fiber optic network, and having sold the cellular unit, the company reduced its capital investment (Capex) by 86.8%, which amounted to R$219 million in the quarter. Routine operations totaled R$2.3 billion in the first quarter of 2020, down 26.9% year-on-year.

Cost reduction is one of Oi’s strategies for loss reversal. The company is promoting a significant staff reduction. The number of workers decreased by 38.2% year on year, mainly due to the sale of V.tal and Oi Móvel. In the last quarter alone, there was a reduction of 2,600 employees, of which 1,100 are in Oi SA and the remainder in subsidiaries. This separation was expected and job cuts were expected in the company’s restructuring plan.

“Since the beginning of the second quarter of the year 2022, the company has begun the phase of transition to a new, lighter and more flexible organizational structure, with the aim of meeting the growing demand for digital services in the country, and at the same time gaining the size and maturity of a new operating model in fiber,” the company wrote in the financial statement. .

Routine EBITDA from Brazilian operations ended the quarter at R$193 million, down 84.2% year-over-year. The effects of this decline are related to the sale of mobility operations, which had a positive contribution, and fiber infrastructure, in line with Oi’s strategic transformation plan.

The loss prompted Oi to end March with a cash position of R$1.8 billion, down 44% sequentially. Consumption of working capital was the main driver of consumption dynamics, totaling R$894 million in Q1 2013, according to company notification.