SAO PAULO, Nov 13 (Reuters) - Brazilian telecom Grupo Oi beat profit forecasts on Wednesday and pledged lowercapital spending next year as new management focused on effortsto cut debt.
Chief Executive Officer Zeinal Bava, who took the helm at Oiin June after running major shareholder Portugal Telecom, said the company was trimming investments in 2014 tofree up cash flow and get its burdensome debt under control.
"Capital expenditures next year will be below 6 billion(reais)," said Bava on a call with analysts. "Correcting ourcash flow trend and reducing debt is a strategic imperative forthe company, so next year we'll have less capex."
Oi is not alone in working urgently to reduce debt. Many ofBrazil's biggest listed companies are also doing so beforeglobal interest rates rise and the country's benchmark borrowingrate climbs back into double digits.
In the third quarter, Oi's net debt shrank for the firsttime in two years, declining 1 percent to 29.295 billion reais($12.58 billion) in September from June.
Shares of Oi rose 2.5 percent, rebounding from a two-monthlow at Tuesday's close.
Oi reported a net profit of 172 million reais for thequarter, down 71 percent from a year earlier but well above mostanalysts' forecasts. A Reuters survey had been split betweenthree analysts with an average earnings estimate of 123 millionreais and two analysts forecasting a net loss.
Earnings before interest, taxes, depreciation andamortization slipped 2 percent from a year earlier to 2.139billion reais, above an average forecast of 1.909 billion reais.
- Investment & Company Information