SAO PAULO, Nov 13 (Reuters) - Brazilian telecom Grupo Oi beat profit forecasts on Wednesday and pledged lower capital spending next year as new management focused on efforts to cut debt.
Chief Executive Officer Zeinal Bava, who took the helm at Oi in June after running major shareholder Portugal Telecom , said the company was trimming investments in 2014 to free 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 our cash flow trend and reducing debt is a strategic imperative for the company, so next year we'll have less capex."
Oi is not alone in working urgently to reduce debt. Many of Brazil's biggest listed companies are also doing so before global interest rates rise and the country's benchmark borrowing rate climbs back into double digits.
In the third quarter, Oi's net debt shrank for the first time 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-month low at Tuesday's close.
Oi reported a net profit of 172 million reais for the quarter, down 71 percent from a year earlier but well above most analysts' forecasts. A Reuters survey had been split between three analysts with an average earnings estimate of 123 million reais and two analysts forecasting a net loss.
Earnings before interest, taxes, depreciation and amortization slipped 2 percent from a year earlier to 2.139 billion reais, above an average forecast of 1.909 billion reais.