NII Holdings says profits will continue to fall

Latin American operator NII Holdings has said financial results for 2012 are likely to miss expectations and provided a disappointing outlook for 2013.

The company – which runs telecoms operations in Argentina, Brazil, Chile, Mexico and Peru – said fourth-quarter revenues were likely to be $1.5 billion, compared with $1.6 billion in the fourth quarter of 2011.

Latin American operator NII Holdings has said financial results for 2012 are likely to miss expectations and provided a disappointing outlook for 2013.

The company – which runs telecoms operations in Argentina, Brazil, Chile, Mexico and Peru – said fourth-quarter revenues were likely to be $1.5 billion, compared with $1.6 billion in the fourth quarter of 2011.

It expects to generate $6.1 billion in full-year revenues for 2012, compared with $6.7 billion in 2011, and operating income before depreciation and amortisation (OIBDA) of between $930 million and $950 million, down from $1.56 billion in 2011.

Not surprisingly, its statement on the recent performance was notably downbeat.

“While 2012 was a pivotal year for NII as we made progress in the deployment of our 3G networks and new service offerings, we fell well short of expectations,” said Steve Shindler, the company’s chairman and interim chief executive. “We recognize the industry challenges facing our business today, and we are taking steps to fortify the company’s operations to generate long-term growth and profitability.”

Despite this, for 2013 NII Holdings (Reston, USA) is forecasting revenues of between $5.7 billion and $5.9 billion and OIBDA of between $600 million and $650 million, which would obviously represent further declines on the previous year’s results.

Analysts polled by Thomson Reuters had expected the company to guide for revenues of $6.12 billion for 2013.

The company’s net debt has soared from $2.2 billion for 2012 to a likely figure of $3.3 billion for 2013.

NII Holdings is pursuing a sale and leaseback of 4,500 towers in Brazil and Mexico through a competitive bidding process, which could help to reduce its debts, but it says “there can be no assurance as to if, or when, any such transaction will occur or the amount of proceeds, if any, that it may raise”.

The operator also said it recently took action to remove unprofitable customers in Brazil and believes this will position it to return to subscriber growth in the first quarter of 2013.

NII Holdings lacks the scale of America Movil (Mexico City, Mexico) and Telefonica (Madrid, Spain), the groups that dominate the Latin American telecoms scene, and has struggled to mount a competitive challenge.