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TIM’s Q2 profit doubles on mobile phone business

Brazilian telecommunications operator TIM on Monday reported a 104% jump in its second-quarter net profit from a year earlier, boosted by the performance of its mobile phone business in addition to cost control measures.

TIM Brasil, controlled by Telecom Italia, posted a profit of 638 million reais ($135 million) in the April-to-June period.

The company’s earnings before interest, taxes, depreciation and amortization landed at 2.914 billion reais, 17% above the year-earlier quarter, according to a securities filing.

Profitability as measured by the EBITDA margin grew 3.7 percentage points from the first quarter to reach nearly 50%, compared to profits in the first quarter using the same metric. Compared to last year’s second quarter, profitability grew 3.4 percentage points.

TIM said its service revenue was the main driver of growth in the quarter “along with better cost control and reduced expense burdens.”

Total revenue for the quarter grew 9.2% to 5.86 billion reais, while revenue from TIM’s main mobile phone services business reached 5.37 billion reais.

Analysts at Citi welcomed the quarterly result, praising TIM’s Brazil unit for healthy top-line trends and better operational efficiency.

“While the price-up adjustments and reduced churn supported healthy top-line trends, expenses normalization led to sizable profitability gains,” said a Citi analyst research note.

Last week, competitor Telefonica Brasil SA reported 50% profit growth for the second quarter, backed by robust figures in its mobile phone business. Reuters

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