(Adds details from analysts’ call)
By Gabriela Mello
SAO PAULO, March 27 (Reuters) - Brazilian telecommunications firm Oi SA, trying to right itself after a string of financial losses, is boosting capital spending in a bid to return to revenue growth by 2021, executives said on Wednesday.
Speaking to analysts following the release of fourth-quarter results, Chief Financial Officer Carlos Brandao said recent losses at Brazil’s largest fixed-line firm were related to underinvestment. Expanding the firm’s broadband networks as well as its 4G and 4.5G offerings, he said, would be key to returning the company to profitability.
Late on Tuesday, Oi reported a fourth-quarter net loss of 3.359 billion reais ($858 million), widening 66 percent from its year-earlier loss. Total revenue fell 7.9 percent.
The results disappointed the market, with Brazil-listed preferred shares down 4.4 percent in early afternoon trade.
“Revenue is connected to underinvestment in recent years, so we’re investing more, and this will be key to reversing this trend,” Brandao said.
“We expect to stabilize in 2020, and start to grow in 2021.”
In 2016, Oi filed for bankruptcy protection, setting off a protracted battle among creditors and shareholders.
A restructuring plan was finally agreed in December 2017 and much of the company’s activities since then have revolved around implementing the terms of the agreement.
In the results release, the firm forecasted capital expenditure of 7 billion reais in 2019, up from 6.1 billion the year before. As part of those investments, the firm aims to add 200,000 customers per month to its high-speed fiber-to-the-home (FTTH) broadband service this year.
Regarding potential asset sales, Brandao said the firm was currently discussing options with adviser Bank of America Merrill Lynch, as previously disclosed by Reuters in January, though no decisions had yet been taken.
The firm recently named two directors to a new five-person board at Angolan telecommunications firm Unitel, including the chief executive job.
Gaining greater board control may open the door to an Oi exit from the firm, though that process will take some time, Brandao said. (Reporting by Gabriela Mello; Writing by Gram Slattery; Editing by Bernadette Baum and Rosalba O’Brien)