Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
TIM PARTICIPAÇÕES S.A. Announces its
Consolidated Results for Third Quarter of 2005
TIM PARTICIPAÇÕES S.A. October 27, 2005 BOVESPA (lot of 1,000 shares) TCSL3: R$ 4.75 TCSL4: R$ 4.34 NYSE (1 ADR = 10,000 shares) TSU: US$ 19.09 Market Value: R$ 3.9 billion US$ 1.7 billion 3Q05 Earnings Release International Conference Call: October 28, 2005, at 12:00 p.m. Brasília Time (10:00 a.m. US ET). National Conference Call: October 28, 2005, at 13:00 p.m. Brasília Time (11:00 a.m. US ET). SP Meeting: November 07, 2005, at 4:00 p.m. Venue: Bovespa NY Presentation: Brazil Day 2005 November 14, 2005 For further information, please access the Companys website: www.timpartri.com.br. Contacts: Paulo Roberto C. Cozza CFO and Investor Relations Officer Tel: (55 21) 4009 3742 E-mail: pcozza@timsul.com.br Joana Serafim IR Manager Tel: (55 21) 4009-3742/8113-0571 E-mail: jserafim@timbrasil.com.br Leonardo Wanderley IR Analyst Tel: (55 21) 4009-3751/8113-0547 E-mail: lwanderley@timbrasil.com.br Cristiano Pereira IR Analyst Tel: (55 21) 4009-3751/8113-0582 E-mail: cripereira@timbrasil.com.br |
Rio de Janeiro, October 27, 2005 TIM Participações S.A. (BOVESPA: TCLS3 e TCLS4; and NYSE: TSU), TIM Sul S.A. and TIM Nordeste Telecomunicações S.A. holding company announces the results of the third quarter of 2005 (3Q05). TIM Participações S.A. provides mobile telecommunication services through its mobile operators in the states of Paraná, Santa Catarina, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas and in the city of Pelotas (RS). The following financial and operational information, except as otherwise indicated, is presented on a consolidated basis and in Brazilian Reals, pursuant to the terms of Brazilian Corporate Law. The comparisons contained herein refer to the third quarter of 2004 (3Q04), except as otherwise indicated. | |
Highlights | ||
|
Management Message |
In September, 2005, national subscribers in Brazil reached 79.9 million users, a 5.9% expansion over the previous quarter, which represents a 43.37% penetration. This data, provided by Anatel, shows that the mobile telephony market is still quite buoyant.
Notwithstanding the strong competitive environment, we have maintained our leadership position in the regions where we operate, as a result of our segmented and customized relationship with our clients. We understand that our success is based on the importance we attach to the client and, therefore, we have implemented further tools to improve the contact and relations with our subscribers.
This scenario has enabled us to achieve profitable growth. In the quarter, our total net revenue grew by 13.6%, despite the discontinuation of the long distance service. EBITDA increased 9.4% and the EBITDA margin over net revenue was 34.7%, while service EBITDA margin reached 43.6% . Our net income reached R$96.8 million, totaling R$254.2 million in the first nine months of 2005.
The underlying principles of the Companys policies and philosophy are, evolution and steady technological follow-up and fulfillment of the market and clients needs, by always developing new services and offers, prioritizing profitability and, therefore, continue adding value for our shareholders.
The Management
Strong Brand and Differentiated Offers |
Top of Mind 2005 | TIM Participações closed the quarter with the highest customer satisfaction rates in its regions according to a national quality research, which has been carried out every two month by a recognized institution. TIM was awarded the "Top of Mind 2005", for being the first Mobile Telecommunications Company that came to the mind of the people polled by Data Folha de São Paulo. This award substantiates the success of our products and the quality of our services. | |
Competitive offers and Services | The quarter was marked by a strong increment in sales, and the campaigns targeted mostly the commemorative date of the period: "Fathers Day". The marketing strategy continues focused on customer acquisition, in particular high- value customers - the main postpaid growth-driver in 2005 -, as well as retaining the loyalty of current users. | |
In the quarter, we expanded the "TIM Brasil" service portfolio, comprising nation-wide plans aimed at acquiring high-value customers. We highlighted the launching of the "Nosso Grupo" plan, a package including local calls, intragroup calls, TIM Box Vip calls, TIM Connect and TIM Wap. | ||
The VAS portfolio was expanded with corporate and consumer solutions, such as "Mega TIM 200 Torpedos" and "Mega TIM Mania". "TIM Fast Edge" was enhanced, thereby making internet navigation from laptops easier with EDGE technology. We also offered "TIM Light 40", which was a great success with postpaid customers, and "TIM + 25", catering to high-value prepaid customers. |
Operating Performance |
Sharp penetration increase | By the end of the quarter, the total penetration including both the Northeastern and Southern Regions - was estimated at 37.6% - 12.4 p.p. over 3Q04 -, below the national average penetration of 43.4%, showing potential for growth in the regional market, in which TIM Participações benefited through its unique service portfolio. | |
Strong growth of the client base | TIM Participações client base has reached 6,943,313 subscribers by the end of 3Q05, a 34.5% and 7.0% expansion over 3Q04 and 2Q05, respectively. As a result the Company market share remained almost stable, now standing at 41.3% compared to 41.9% in the 2Q05. |
The highest postpaid mix | With reference to the customer mix, the postpaid segment grew by 9.0% in the 3Q05 compared to 3Q04, bringing the participation of postpaid clients to 21% of the total lines - the highest mix in the market. | |
The quarter has presented the second highest level of net additions in 2005 with 453,231 new clients, 26.5% higher than the 358,263 additions registered in 3Q04. This growth is a consequence of TIM Participações strong position in the markets where it operates. |
Client Base (Thousands)
Fast expansion of the GSM base | By the end of the quarter, 58% of TIM Participações clients used GSM technology 4,050,202 clients, representing 68% and 48% of the client base in the Southern and Northeastern regions, respectively. During the quarter the Company experienced 126.8 thousand TDMA to GSM migrations, totaling 419.1 thousand migrations since the beginning of the year. | |
The GSM coverage in the TIM Participações region reached 630 cities by the end of the third quarter of 2005, serving to 86.8% of the urban population. Cities covered by the GSM have access to the GPRS, with the additional benefit of the EDGE technology across the South and part of Northeast Region. These innovations facilitated the use of data and multimedia services by customers all over Brazil. | ||
The scenario of strong growth and fierce competition, resulted in a churn rate of 6.4% in the quarter (or 2.1% per month), 1.0 p.p. higher than the churn rates registered in the 3Q04, although still below the Brazilian average. |
Economic-Financial Development |
In light of the corporate restructuring that occurred on August 30, 2004, pro-forma financial statements were elaborated for the same quarter of the previous year (3Q04) in order to enable TIM Participações S.A.s economic-financial appraisal, on a comparable basis. |
(R$ Thousands) |
||||||||||||||||
% | ||||||||||||||||
3Q05 |
2Q05 |
3Q04 |
% Y-o-Y |
% Q-o-Q |
9M05 |
9M04 |
||||||||||
9M | ||||||||||||||||
Total Gross Revenue | 986,450 | 960,705 | 870,825 | 13.3% | 2.7% | 2,830,048 | 2,427,588 | 16.6% | ||||||||
Gross Service Revenue | 796,834 | 764,946 | 707,305 | 12.7% | 4.2% | 2,314,205 | 2,009,389 | 15.2% | ||||||||
Gross Handset Revenue | 189,616 | 195,759 | 163,521 | 16.0% | -3.1% | 515,843 | 418,199 | 23.3% | ||||||||
Total Net Revenue | 736,113 | 719,400 | 647,981 | 13.6% | 2.3% | 2,114,532 | 1,816,929 | 16.4% | ||||||||
Net Services Revenue | 613,901 | 585,282 | 538,799 | 13.9% | 4.9% | 1,774,095 | 1,530,129 | 15.9% | ||||||||
Net Handsets Sales | 122,212 | 134,118 | 109,181 | 11.9% | -8.9% | 340,437 | 286,800 | 18.7% | ||||||||
EBITDA | 255,150 | 210,672 | 233,314 | 9.4% | 21.1% | 714,991 | 625,431 | 14.3% | ||||||||
EBITDA Margin | 34.7% | 29.3% | 36.0% | -1.3 p.p. | 5.4 p.p. | 33.8% | 34.4% | -0.6 p.p. | ||||||||
EBIT | 122,333 | 79,130 | 112,870 | 8.4% | 54.6% | 321,277 | 271,176 | 18.5% | ||||||||
EBIT Margin | 16.6% | 11.0% | 17.4% | -0.8 p.p. | 5.6 p.p. | 15.2% | 16.8% | -0.1 p.p. | ||||||||
Net Income | 96,795 | 73,082 | 69,912 | 38.5% | 32.4% | 254,168 | 182,563 | 39.2% | ||||||||
Operating Revenue
The service gross revenue in 3Q05 totaled R$796.8 million, 12.7% superior to that registered in the same quarter of the previous year. This growth is primarily due to the 34.5% expansion of the client base and the 64.7% value added service revenue growth. | ||
Mobile telephone sales record | The gross handsets revenue in the quarter was R$ 189.6 million, a 16.0% increase over 3Q04, a result of the increase in mobile telephone sales. In the 3Q05, 688.2 thousand mobile telephones were sold, an increase of 52% compared to 452.4 thousand in the 3Q04. | |
It is important to mention that among the handsets sold in the quarter, 39% were compatible with GPRS technology. The most-sold models were those enabled with MMS (41%), JAVA (32%) and Camera (22%), indicating that customers are demanding more sophisticated handsets. |
Hence, total gross revenue in 3Q05 was R$986.5 million, 13.3% higher than in 3Q04. Total revenue net of taxes and discounts was R$736.1 million, surpassing by 13.6%, the figure posted in 3Q04. | ||
ARPU: - new revenue breakdown - Prepaid expansion YOY | The average revenue per user (ARPU) in 3Q05 was R$27.86, with a slight reduction compared to 2Q05 (R$29.70), mainly due to the great volume of net additions registered in the period (+453,231). The decrease in comparison to the 3Q04 (R$34.40), results basically from the large growth of the total client base and from the discontinuation of the international and national long-distance services in 2005. |
Operational Costs and Expenses
Reduction of net work and interconnection costs | In 3Q05, the network and interconnection cost totaled R$ 111.9 million, 2.7% below the R$ 115.0 million registered in 3Q04, primarily due to the non- occurrence of the costs related to long distance services with the interruption of these services as of early 2005, which was greatly offset by the growth of outgoing revenues. | |
The cost of goods sold reached R$134.7 million, 7.9% superior to the R$ 124.9 million in the 3Q04. This increase is primarily due to the 52% growth in the mobile telephone sold. It is important to point out that even within the competitive environment; the Company has maintained mobile telephone prices above the markets average. | ||
2005: Sale Record in - 872 thousand gross additions | Commercial expenses in the quarter (excluding depreciation/amortization / bad debt and personnel) totaled R$144.0 million, 33.2% superior to those posted in 3Q04, primarily due to the strong sales growth in the period with gross addition of 872,142 clients in the quarter, versus 625,151 clients in 3Q04, a growth of 39.5%. The figure posted in this quarter represents a record for the Company in a single quarter. | |
The sales increase in the period leveraged especially variable expenses related to sales incentives and the FISTEL rate - charged by ANATEL at each new activation and over the total base. In 3Q05, these expenses reached R$65.0 million and R$31.7 million, respectively. | ||
SAC: Reduction of 22% in 3Q05 versus 3Q04 | The subscribers acquisition cost (SAC) of the quarter reached R$106.9, which represents a 22% reduction over the R$137.8 posted in 3Q04. This decrease is a result of the Companys rational market strategy in the acquisition of new clients, which have benefited from the appreciation of the Brazilian Real against the U.S. Dollar and the lower average prices of mobile telephones. |
General and administrative expenses (G&A)- excluding depreciation/amortization and personnel expenses totaled R$ 26.2 million, 23.5% lower than in 3Q04. Two factors are related to this expense behavior: a) Reduction in the IT equipment maintenance costs in the 3Q05; and b)In 3Q04 non-recurring expenses related to the ownership restructuring process, with the incorporation of Tele Nordeste by the Company. |
||||||||||||||
Personnel expenses and costs totaled R$33.0 million 19.5% higher than those registered in the 3Q04. This increase was mainly due to non-recurring expenses related to the network maintenance staff, which is in the process of being outsourced. | ||||||||||||||
Update of bad debt provision criteria | In the 3Q05, bad debt expenses totaled R$24.3 million, increasing as a percentage of total gross revenues from 1.7% in the 3Q04 to 2.5% in the 3Q05. The increase is especially due to the adoption of more conservative criteria for the establishment of the bad debt provision, taking into account the strong growth in postpaid customers. It is worth pointing out that all these procedures aim to maintain the quality of our client base. | |||||||||||||
EBITDA | ||||||||||||||
TIM Participações reported an increase of 9.4% in EBITDA (earnings before interest, taxes, depreciation and amortization) or R$255.2 million in the quarter, compared to R$233.3 million in 3Q04. This is proof that despite the competitive scenario and record gross additions in the quarter, the Company has achieved profitable growth. |
(R$ Thousands) |
||||||||
EBITDA Reconciliation |
3Q05 |
|
9M05 |
9M04 | ||||
Net Profit | 96,795 | 69,912 | 254,166 | 182,563 | ||||
(-) Provision for Income Tax and Social Contribution | 37,202 | 42,082 | 97,472 | 87,160 | ||||
(+/-) Non-Operational Results | 7,593 | (550) | 1,833 | 4,193 | ||||
(+/-) Minorities Interest | - | 19,250 | 21,464 | 46,574 | ||||
(-) Net Financial Results | 19,257 | 17,823 | 53,658 | 49,315 | ||||
EBIT | 122,333 | 112,870 | 321,277 | 271,176 | ||||
(-) Amortization and Depretiation | 132,817 | 120,444 | 393,714 | 354,255 | ||||
EBITDA | 255,150 | 233,314 | 714,991 | 625,431 | ||||
Margin increase QoQ |
EBITDA margin was 34.7%, up 5.4 p.p. over 2Q05 margin. The service EBITDA margin, excluding handsets revenue and costs was 43.6%, 3.1 p.p. higher than in 2Q05. |
EBITDA (R$ million)
Depreciation and Amortization
Depreciation and amortization in the period was R$132.8 million, versus R$120.4 million, an increase of 10.3% over 3Q04, in line with the Companys 10.6% fixed asset growth in the last year, resulting mainly from the technological expansion and innovation of the network.
EBIT
EBIT earnings before interest and taxes was R$122.3 million, compared to R$112.9 million in 3Q04.
EBIT Margin was 16.6%, 5.6 p.p. over the EBIT Margin registered in 2Q05; on a annual basis the EBIT margin was 0.8 p.p. lower compared to the 3Q04, mainly due to higher depreciation and amortization charges.
Net Financial Result
TIM Participações net financial result in 3Q05 was a positive R$19.3 million, an 8.0% increase over the positive R$17.8 million posted in the same period of 2004.
Net Income | ||
Operating Result Expansion |
Consolidated net income was R$96.8 million, up 38.5% and 32.4% over 3Q04 and 2Q05, respectively, representing a 13.1% net margin. Accumulated income by the end of September totaled R$254.2 million, representing earnings per share of R$0.29 per lot of 1,000 shares and earnings per ADR of R$2.90 per ADR (10,000 shares). |
Net Income (R$ Million)
Indebtedness
In September, 2005, the Companys indebtedness amounted to R$135.7 million 82% of the long-term compared to R$ 101.8 million reported at the end of 3Q04.
Total indebtedness, including Loans and Financings from BNDES and Banco do Nordeste, has been offset by cash and equivalents, resulting in a R$ 746.0 million in net cash position.
CAPEX
In 3Q05, CAPEX equaled R$ 147.9 million, totaling R$336.1 million invested until September 2005, these investments have been basically directed to GSM capacity and quality expansion.
Free Cash Flow | ||
Positive | ||
Free cash Flow |
The Company generated a operating free cash flow of R$ 143.1 million compared to the negative R$ 16.6 million Cash Flow registered in 3Q04. |
Ownership Breakdown |
On September 30, 2005, the Capital of TIM ParticipaÇões S.A. was as following: | ||||||||||||
Common | % | Preferred | % | Total | % | |||||||
TIM Brasil Serviços e Participações S.A. | 150,804,603,591 | 50.33% | 24,053,370,461 | 4.15% | 174,857,974,052 | 19.88% | ||||||
ADR | - | 337,323,781,484 | 58.16% | 337,323,781,484 | 38.35% | |||||||
Local Float | 148,806,027,477 | 49.67% | 218,588,704,147 | 37.69% | 367,394,731,624 | 41.77% | ||||||
Total | 299,610,631,068 | 100.00% | 579,965,856,092 | 100.00% | 879,576,487,160 | 100.00% | ||||||
Quarter Events |
Network Use (VU-M) Fare Increase
From June 12 to July 17, 2005, TIM Participações entered into an agreement with operators in its operation area and implemented a temporary increase of 4.5% in network use (VU-M) for local calls between the operators Companies.
In the Southern Region, VU-M was up from R$0.37635 to R$0.39328, while in the Northeastern region it increased from R$0.38701 to R$0.40442, net of taxes.
Success in the Legal Dispute referring to ICMS Convênio 69/98
In 3Q05, TIM Sul S.A. subsidiary won the legal dispute related to VAT (Value-Added Tax) in Parana State, referred to as ICMS Convenio 69/98. Therefore, the R$ 9.7 million amount, paid as Judicial Deposits, has been returned to the Company and accounted for in its cash-line.
Outlook for the Next Quarter |
For the end of the year, despite expectations of fiercer competition, TIM Participações will keep its focus on profitable growth. | ||
In the fourth quarter, the Company expects to maintain its current levels of net additions. The Company estimated that the average revenue per user (ARPU) should remain reasonably stable per segment profile. | ||
Investment approved for 2005 was R$561.8 million, and the Company foresees achieving this goal by the end of the year. | ||
This topic may contain forward-looking statements. Such statements are not statements of historical facts, and reflect the beliefs and expectations of the Company's management. The words "anticipates, "believes, "estimates, "expects, "forecasts, "plans, "predicts, "projects, "targets" and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties forecasted by the Company. Therefore, Companys future operational results may differ from current expectations and whose read this release shall not based his/hers assumptions exclusively in the information herein stated. Forward- looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future ;developments. | ||
Disclaimer | ||
About TIM Participações S.A. |
TIM Participações S.A. is the holding company of TIM Sul S.A. and TIM Nordeste Telecomunicações S.A., the mobile telecommunication operators that provides mobile telephony services in the states of Paraná, Santa Catarina, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas and in the city of Pelotas, in the State of Rio Grande do Sul, an area containing 44.8 million inhabitants. | |
TIM Participações is cont rolled by TIM Brasil Serviços e Participações S.A., a Brazilian subsidiary of Telecom Italia Group, the only company authorized to operate mobile communications throughout Brazil. | |
TIM Participações offers GSM technology, Global System for Mobile Communications, the most widely used in the world. At the end of September 2005, its network covered 630 cities and served 86.8% of the urban population. | |
The cities covered by the GSM Network also have access to the GPRS and EDGE technologies. These are innovations that facilitate the use of data and multimedia services across the country. | |
The Company boasts one of the widest services and product portfolios, offering solutions tailored to specific needs. | |
TIM is the most widely known brand in both regions, and has been Top of Mind since the Company started its operations. |
List of Attachments |
Attachment 1: | Balance Sheet (BR GAAP) | |
Attachment 2: | Income Statement (BR GAAP) | |
Attachment 3: | Cash Flow Statements (BR GAAP) | |
Attachment 4: | Operational Indicators Southern Region | |
Attachment 5: | Operational Indicators- Northeastern Region | |
Attachment 6: | Consolidated Operational Indicators TIM Participações | |
Attachment 7: | Glossary | |
Attachment 1
TIM PARTICIPAÇÕES S.A.
Balance Sheet under the Corporate Law (R$ Thousands)
DESCRIPTION | September 05 | July 05 | % | |||
ASSETS | 3,716,706 | 3,512,457 | 5.8% | |||
- | - | |||||
CURRENT ASSETS | 1,876,243 | 1,685,482 | 11.3% | |||
Cash and cash equivalents | 881,673 | 738,535 | 19.4% | |||
Accounts receivable | 690,721 | 645,880 | 6.9% | |||
Inventories | 50,779 | 37,662 | 34.8% | |||
Recoverable Taxes | 91,497 | 94,684 | -3.4% | |||
Deferred income and social contribution taxes | 129,855 | 119,745 | 8.4% | |||
Other current assets | 31,718 | 48,976 | -35.2% | |||
NON CURRENT ASSETS | 226,424 | 238,542 | -5.1% | |||
Related parties | 21,651 | 10,270 | 110.8% | |||
Recoverable Taxes | 63,020 | 60,482 | 4.2% | |||
Deferred income and social contribution taxes | 107,125 | 126,456 | -15.3% | |||
Judicial deposits | 25,989 | 35,102 | -26.0% | |||
Other | 8,639 | 6,232 | 38.6% | |||
PERMANENT ASSETS | 1,614,039 | 1,588,433 | 1.6% | |||
Investments | 8,704 | 9,100 | -4.4% | |||
Property. plant and equipment | 1,605,335 | 1,579,333 | 1.6% | |||
LIABILITIES | 3,716,706 | 3,512,457 | 5.8% | |||
CURRENT LIABILITIES | 833,932 | 737,760 | 13.0% | |||
Trade accounts payable | 8,741 | 11,569 | -24.4% | |||
Loans and financing | 24,370 | 44,226 | -44.9% | |||
Suppliers | 570,917 | 447,320 | 27.6% | |||
Salaries and related charges | 27,312 | 22,373 | 22.1% | |||
Taxes. charges and contributions | 121,477 | 118,267 | 2.7% | |||
Related parties | 41,447 | 51,629 | -19.7% | |||
Payable dividends and interest on shareholders' equity | 19,714 | 23,084 | -14.6% | |||
Other | 19,954 | 19,292 | 3.4% | |||
NON CURRENT LIABILITIES | 157,033 | 164,039 | -4.3% | |||
Loans and financing | 111,321 | 116,652 | -4.6% | |||
Trade accounts payable | 2,860 | - | N,A, | |||
Taxes. charges and contributions | 11,634 | 16,634 | -30.1% | |||
Provision for contingencies | 27,521 | 27,056 | 1.7% | |||
Supplementary pension plan | 3,697 | 3,697 | 0.0% | |||
MINORITY INTEREST | - | - | - | |||
SHAREHOLDERS' EQUITY | 2,725,741 | 2,610,658 | 4.4% | |||
Capital | 1,472,075 | 1,472,075 | 0.0% | |||
Capital reserves | 192,081 | 185,680 | 3.4% | |||
Income reserves | 779,827 | 779,827 | 0.0% | |||
Net Profit | 281,758 | 173,076 | 62.8% | |||
The complete Financial Statements, including its Explanatory Notes are available on the Website:
www.timpartri.com.br
Attachment 2
TIM PARTICIPAÇÕES S.A.
Results (BR GAAP R$ Thousands)
DESCRIPTION | 3Q05 | 3Q04 | % | 9M05 | 9M04 | YTD % | ||||||
Gross Revenues | 986,450 | 870,825 | 13.3% | 2,830,048 | 2,427,588 | 16.6% | ||||||
Telecommunications Services | 796,834 | 707,305 | 12.7% | 2,314,205 | 2,009,389 | 15.2% | ||||||
Core | 730,625 | 667,593 | 9.4% | 2,117,653 | 1,908,982 | 10.9% | ||||||
VAS | 50,013 | 30,361 | 64.7% | 153,005 | 77,477 | 97.5% | ||||||
Others | 16,196 | 9,352 | 73.2% | 43,547 | 22,930 | 89.9% | ||||||
Handset sales and other revenues | 189,616 | 163,521 | 16.0% | 515,843 | 418,199 | 23.3% | ||||||
Handset Sales | 189,616 | 163,521 | 16.0% | 515,843 | 418,199 | 23.3% | ||||||
Discounts and deductions | (250,337) | (222,845) | 12.3% | (715,516) | (610,660) | 17.2% | ||||||
Taxes and discounts on services | (182,933) | (168,505) | 8.6% | (540,110) | (479,261) | 12.7% | ||||||
Taxes and discounts on handset sales | (67,404) | (54,340) | 24.0% | (175,405) | (131,399) | 33.5% | ||||||
Net Revenues | 736,113 | 647,981 | 13.6% | 2,114,532 | 1,816,929 | 16.4% | ||||||
Services | 613,901 | 538,799 | 13.9% | 1,774,095 | 1,530,129 | 15.9% | ||||||
Handset and other revenues | 122,212 | 109,181 | 11.9% | 340,437 | 286,800 | 18.7% | ||||||
Operating Expenses | (480,963) | (414,667) | 16.0% | (1,399,541) | (1,191,498) | 17.5% | ||||||
Personal expenses | (32,999) | (27,619) | 19.5% | (92,043) | (84,608) | 8.8% | ||||||
Selling & marketing expenses | (144,043) | (108,068) | 33.3% | (396,618) | (295,969) | 34.0% | ||||||
Network & interconnection | (111,870) | (115,021) | -2.7% | (334,607) | (307,771) | 8.7% | ||||||
G&A | (26,231) | (34,274) | -23.5% | (85,313) | (83,512) | 2.2% | ||||||
Cost Of Goods and Service | (134,715) | (124,888) | 7.9% | (388,788) | (350,886) | 10.8% | ||||||
Bad Debt | (24,317) | (14,968) | 62.5% | (90,226) | (82,457) | 9.4% | ||||||
Other operational revenues (expenses) | (6,787) | 10,171 | N,A, | (11,946) | 13,703 | N,A, | ||||||
EBITDA | 255,150 | 233,314 | 9.4% | 714,991 | 625,431 | 14.3% | ||||||
EBITDA - Margin over total net revenues | 34.7% | 36.0% | -1.3 p,p | 33.8% | 34.4% | -0.6 p,p | ||||||
Depreciation | (93,773) | (85,549) | 9.6% | (279,887) | (254,269) | 10.1% | ||||||
Amortization | (39,043) | (34,895) | 11.9% | (113,827) | (99,986) | 13.8% | ||||||
EBIT | 122,333 | 112,870 | 8.4% | 321,277 | 271,176 | 18.5% | ||||||
EBIT - Margin over total net revenues | 16.6% | 17.4% | -0.8 p,p | 15.2% | 14.9% | 0.3 p,p | ||||||
Other non-operational revenues (expenses) | (7,593) | 550 | N,A, | (1,833) | (4,193) | -56.3% | ||||||
Net Financial Results | 19,257 | 17,823 | 8.0% | 53,658 | 49,315 | 8.8% | ||||||
Financial expenses | (23,088) | (16,000) | 44.3% | (53,692) | (47,236) | 13.7% | ||||||
Net exchange variance | (670) | (853) | -21.4% | (2,086) | (3,010) | -30.7% | ||||||
Financial income | 43,015 | 34,676 | 24.0% | 109,436 | 99,561 | 9.9% | ||||||
Net income before taxes and Minorities | 133,997 | 131,244 | 2.1% | 373,102 | 316,297 | 18.0% | ||||||
Income tax and social contribution | (37,202) | (42,082) | -11.6% | (97,472) | (87,160) | 11.8% | ||||||
Minority interest | - | (19,250) | N,A, | (21,464) | (46,574) | -53.9% | ||||||
Net Income | 96,795 | 69,912 | 38.5% | 254,166 | 182,563 | 39.2% | ||||||
The complete Financial Statements, including its Explanatory Notes are available on the Website:
www.timpartri.com.br
Attachment 3
TIM PARTICIPAÇÕES S.A.
Cash Flow Statements
(BR GAAP R$ Thousands)
Consolidated | ||||
3Q05 | 9M | |||
Operating Activities | ||||
Net income | 96,795 | 254,166 | ||
Adjustments to reconcile net income cash | ||||
Depreciation and amortization | 120,207 | 355,879 | ||
Minority interest | - | 21,464 | ||
Monetary and foreign exchange variations on loans | 1,767 | 5,457 | ||
Others | (27) | 1,787 | ||
Chages in operating assets and liabilities | 97,905 | (211,543) | ||
Net cash provided by operating activities | 316,647 | 427,210 | ||
Investing Activities | ||||
Capital increase - Stock options | - | 2,006 | ||
Computation of capital reserve | 6,401 | 6,401 | ||
Capital expenditure | (147,949) | (336,115) | ||
(141,548) | (327,708) | |||
Financing Activities | ||||
New loans | - | 85,319 | ||
Loan repayments | (30,755) | (66,677) | ||
Dividends and interest on shareholders equity | (1,206) | (92,803) | ||
(31,961) | (74,161) | |||
Increase in cash and cash equivalents | 143,138 | 25,341 | ||
Cash and cash equivalent at the end of the period | 881,673 | 881,673 | ||
Cash and cash equivalent at the beggining of the period | (738,535) | (856,332) | ||
Attachment 4
Operational Indicators for the Northeastern Region
Var. % Q-o-Q |
Var.% Y-o-Y |
Var. % 9M |
||||||||||||||
3Q05 | 2Q05 | 3Q04 | 9M05 | 9M04 | ||||||||||||
Estimated Population in the Region (million) | 28.8 | 28.8 | 28.5 | 0.1% | 1.0% | 28.8 | 28.5 | 1.0% | ||||||||
Municipalities Served - GSM | 329 | 316 | 218 | 4.1% | 50.9% | 329 | 218 | 50.9% | ||||||||
Estimated Total Penetration | 31.3% | 28.2% | 20.7% | 3.0 p.p. | 10.5 p.p. | 31.3% | 20.7% | 10.5 p.p. | ||||||||
Market Share | 37.2% | 37.8% | 42.8% | -0.6 p.p. | -5.6 p.p. | 37.2% | 42.8% | -5.6 p.p. | ||||||||
Total Lines | 3,349,016 | 3,066,048 | 2,531,994 | 9.2% | 32.3% | 3,349,016 | 2,531,994 | 32.3% | ||||||||
Prepaid | 2,659,202 | 2,372,341 | 1,821,583 | 12.1% | 46.0% | 2,659,202 | 1,821,583 | 46.0% | ||||||||
Postpaid | 689,814 | 693,707 | 710,411 | -0.6% | -2.9% | 689,814 | 710,411 | -2.9% | ||||||||
Gross Additions | 456,542 | 401,891 | 259,232 | 13.6% | 76.1% | 1,121,703 | 659,363 | 70.1% | ||||||||
Net Additions | 282,968 | 275,430 | 147,148 | 2.7% | 92.3% | 682,670 | 359,469 | 89.9% | ||||||||
Churn | 5.6% | 4.5% | 4.6% | 1.1 p.p | 1.0 p.p | 15.3% | 12.9% | 2.4 p.p | ||||||||
TOTAL ARPU | R$25.86 | R$28.39 | R$34.35 | -8.9% | -24.7% | R$27.89 | R$33.49 | -16.7% | ||||||||
TOTAL MOU | 85 | 87 | 98 | -2.3% | -13.4% | 87 | 97 | -10.6% | ||||||||
Investment (R$ million) | 77.1 | 46.0 | 84.2 | 67.6% | -8.5% | 147.3 | 146.0 | 0.9% | ||||||||
Employees | 1,097 | 1,026 | 1,058 | 6.9% | 3.7% | 1,097 | 1,058 | 3.7% | ||||||||
Attachment 5
Operational Indicators for the South Region
Var. % Q-o-Q |
Var.% Y-o-Y |
Var. % 9M |
||||||||||||||
3Q05 | 2Q05 | 3Q04 | 9M05 | 9M04 | ||||||||||||
Estimated Population in the Region (million) | 15.9 | 15.9 | 15.7 | 0.2% | 1.2% | 15.9 | 15.7 | 1.2% | ||||||||
Municipalities Served - GSM | 301 | 300 | 279 | 0.3% | 7.9% | 301 | 279 | 7.9% | ||||||||
Estimated Total Penetration | 48.9% | 46.4% | 33.2% | 2.5 p.p. | 15.7 p.p. | 48.9% | 33.2% | 15.7 p.p. | ||||||||
Market Share | 46.1% | 46.4% | 50.2% | -0.3 p.p. | -4.1 p.p. | 46.1% | 50.2% | -4.1 p.p. | ||||||||
Total Lines | 3,594,297 | 3,424,034 | 2,628,908 | 5.0% | 36.7% | 3,594,297 | 2,628,908 | 36.7% | ||||||||
Prepaid | 2,834,016 | 2,702,877 | 2,008,556 | 4.9% | 41.1% | 2,834,016 | 2,008,556 | 41.1% | ||||||||
Postpaid | 760,281 | 721,157 | 620,352 | 5.4% | 22.6% | 760,281 | 620,352 | 22.6% | ||||||||
Gross Additions | 415,600 | 439,492 | 365,919 | -5.4% | 13.6% | 1,200,637 | 997,572 | 20.4% | ||||||||
Net Additions | 170,263 | 270,800 | 211,115 | -37.1% | -19.4% | 604,045 | 573,024 | 5.4% | ||||||||
Churn | 7.1% | 5.3% | 6.1% | 1.8 p.p | 1.0 p.p | 18.5% | 18.4% | 0.1 p.p | ||||||||
TOTAL ARPU | R$29.69 | R$30.86 | R$34.50 | -3.8% | -14.0% | R$31.18 | R$35.99 | -13.3% | ||||||||
TOTAL MOU | 72 | 64 | 82 | 13.6% | -11.8% | 72 | 86 | -16.1% | ||||||||
Investment (R$ million) | 70.9 | 93.6 | 107.0 | -24.3% | -33.8% | 188.8 | 221.0 | -14.6% | ||||||||
Employees | 1,244 | 1,220 | 1,059 | 2.0% | 17.5% | 1,244 | 1,059 | 17.5% | ||||||||
Attachment 6
Operational Indicators Consolidated Data TIM Participações S.A.
Var. % Q-o-Q |
Var.% Y-o-Y |
Var. % 9M |
||||||||||||||
3Q05 | 2Q05 | 3Q04 | 9M05 | 9M04 | ||||||||||||
Estimated Population in the Region (million) | 44.8 | 44.6 | 44.3 | 0.4% | 1.1% | 44.8 | 44.3 | 1.1% | ||||||||
Municipalities Served - GSM | 630 | 616 | 587 | 2.3% | 7.3% | 630 | 587 | 7.3% | ||||||||
Estimated Total Penetration | 37.6% | 34.7% | 25.2% | 2.9 p.p. | 12.4 p.p. | 37.6% | 25.2% | 12.4 p.p. | ||||||||
Market Share | 41.3% | 41.9% | 46.3% | -0.6 p.p. | -5.0 p.p. | 41.3% | 46.3% | -5.0 p.p. | ||||||||
Total Lines | 6,943,313 | 6,490,082 | 5,160,902 | 7.0% | 34.5% | 6,943,313 | 5,160,902 | 34.5% | ||||||||
Prepaid | 5,493,218 | 5,075,218 | 3,830,139 | 8.2% | 43.4% | 5,493,218 | 3,830,139 | 43.4% | ||||||||
Postpaid | 1,450,095 | 1,414,864 | 1,330,763 | 2.5% | 9.0% | 1,450,095 | 1,330,763 | 9.0% | ||||||||
Gross Additions | 872,142 | 841,383 | 625,151 | 3.7% | 39.5% | 2,322,340 | 1,656,935 | 40.2% | ||||||||
Net Additions | 453,231 | 546,230 | 358,263 | -17.0% | 26.5% | 1,286,715 | 932,493 | 38.0% | ||||||||
Churn | 6.4% | 4.9% | 5.4% | 1.5 p.p | 1.0 p.p | 17.0% | 15.6% | 1.4 p.p | ||||||||
TOTAL ARPU | R$27.86 | R$29.70 | R$34.40 | -6.2% | -19.0% | R$29.63 | R$34.76 | -14.8% | ||||||||
TOTAL MOU | 78 | 79 | 90 | -1.0% | -13.2% | 79 | 91 | -13.5% | ||||||||
Investment (R$ million) | 147.9 | 139.6 | 191.2 | 6.0% | -22.6% | 336.1 | 367.0 | -8.4% | ||||||||
Employees | 2,341 | 2,246 | 2,117 | 4.2% | 10.6% | 2,341 | 2,117 | 10.6% | ||||||||
Attachment 7
Glossary
Financial Terms EBIT = Earnings before interest and tax EBITDA = Earnings before interest, tax, depreciation and amortization EBITDA Margin = EBITDA/ Net Operating Revenue CAPEX (capital expenditure) capital investment Subsidy = (net revenue from goods cost of sales + vendors discounts) / gross additions Net debt = gross debt cash PL Shareholders Equity Technology and Services TDMA = Time Division Multiple Access GSM = Global System for Mobile Communications A system storing and coding cell phone data, such as user calls and data, enabling a user to be recognized anywhere in the country by the GSM network. The GSM is now the standard most used in the world. EDGE = Enhanced Data rates for Global Evolution A technique developed to increase the speed of data transmission via cell phone, creating a real broadband for handsets with the GSM technology. available offer speeds that can depending on the handset model. SMS = Short Message Service ability to send and receive alphanumerical messages. |
Operating indicators Customers = Number of wireless lines in service Gross additions = Total of customers acquired in the period Net additions = Gross Additions number of customers disconnected Market share = Companys total number of customers / number of customers in its operating area Marginal Market share = participation of estimated net additions in the operating area. Market penetration = Companys total number of customers + estimated number of customers of competitors / each 100 inhabitants in the Companys operating area Churn rate = number of customers disconnected in the period ARPU = Average Revenue per User net monthly revenue per customers in the period Blended ARPU = ARPU of the total customer base (contract + prepaid) Contract ARPU = ARPU of contract service customers Prepaid ARPU = ARPU of prepaid service customers MOU = minutes of use monthly average. in minutes of traffic per customer = (Total number of outgoing minutes + incoming minutes) / monthly average of customers in the period Contract MOU = MOU of contract service customers Prepaid MOU = MOU of prepaid service customers SAC = Customer acquisition cost = (marketing expenses + commission + Fistel + comodato + costs of retention) |
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
This press release may contain forward-looking statements. Such statements are not statements of historical facts, and reflect the beliefs and expectations of the Company's management. The words "anticipates, "believes, "estimates, "expects, "forecasts, "plans, "predicts, "projects, "targets" and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties forecasted by the Company. Therefore, Companys future operational results may differ from current expectations and whose read this release shall not based his/hers assumptions exclusively in the information herein stated. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TIM PARTICIPAÇÕES S.A. | ||
Date: October 27, 2005 | By: | /s/ Paulo Roberto Cruz Cozza |
Name: Paulo Roberto Cruz Cozza | ||
Title: Chief Financial Officer |