TIM had a normalized net profit of BRL 590 million in the fourth quarter of 2022, which represents a 23.2% decrease compared to the same period of 2021. In the full year of 2022, profit shrank by 18.4%, to BRL 1.795 billion.
The decrease was a consequence of the increase in debt and expenses with interest payments. It is worth remembering that TIM had to resort to a loan to participate in the auction of 5G bands and to buy Oi’s mobile network – the latter was an operation worth R$ 16.5 billion alongside Vivo and Claro.
Net income also suffered a negative accounting effect from depreciation. The incorporating network of Oi had, for example, antennas in duplicate with those of TIM and which are being disconnected, generating casualties in the balance sheet.
TIM has been telling investors and analysts that the drop in profit is transitory and will be offset by the growth in operations, with increased revenue and synergy gains that will improve margins in the coming years.
Operating profit, measured by Ebitda (earnings before interest, taxes, depreciation and amortization), reached BRL 2,930 billion in the fourth quarter of 2022, an increase of 19.6% compared to the same period of 2021.
The Ebitda margin dropped 1.1 percentage points to 49.9%. In the accumulated result for the year, Ebitda increased by 17.2%, to R$ 10.236 billion.
Net income also grew. In the quarter, the increase was 22.4%, to R$ 5.874 billion. In the year, there was expansion of 19.5%, to R$ 21.580 billion, driven by higher revenues from mobile telephony, broadband and product sales.
Operating costs and expenses increased 25.2% in the fourth quarter, reaching R$2.944 billion. In the year, they advanced 21.7%, going to R$ 11.344 billion. This line was impacted by the transaction with Oi and by the new cost line with the fiber optic network operator I-Systems, which supports the broadband service.
The financial result (balance between interest income and expenses) was negative by BRL 350 million in the fourth quarter of 2022, a decrease of 94.3%. In the year, it was negative by R$ 1.439 billion, a deterioration of 120%.
The line for depreciation and amortization in the fourth quarter was negative at R$ 1.858 billion, an increase of 29.4%. In the year, it totaled R$6.827 billion, up 19.9%.
Normalized free operating cash flow totaled R$2,253 billion in the fourth quarter, representing an increase of 280%. In the year, it totaled R$6.913 billion, up 27.8%.
TIM made investments of R$ 1.375 billion in the fourth quarter, an increase of 9.6%. In the year, it totaled R$ 4.730 billion, growth of 8%.
The company reached the end of the year with net debt of R$13.835 billion, which represents leverage (measured by the ratio between net debt and normalized Ebitda) of 1.4 times.
The average cost of debt, excluding leases and licenses related to the 5G auction, was 14.2% per annum in the fourth quarter of 2022, an increase when compared to the cost of 9.5% per annum in the same period of the previous year .
Source: CNN Brasil
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