Embratel Announces Revision of Financial Guidance
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Embratel Announces Revision of Financial Guidance
RIO DE JANEIRO, Brazil, July 10 /PRNewswire/ -- Embratel Participacoes S.A. (Embratel Participacoes or the "Company") (NYSE:EMT; BOVESPA: EBTP3, EBTP4), the Company that holds 98.8 percent of Empresa Brasileira de Telecomunicacoes S.A. ("Embratel") announces that it expects overall year-over-year revenue growth for the second quarter of 2001 to be in line with the Company's expectations (10-20 percent annual growth), however, data revenues will be impacted by the termination of several short- term wholesale leases. While these short-term leases have been previously disclosed by the Company, the timing of when they would discontinue was uncertain. Domestic long distance voice will grow above previous guidance on a year-over-year basis.
Embratel estimates that the year-over-year data revenue growth for the second quarter of 2001 will be 8 to 10 percent. This is below prior annual growth rate guidance (20-35 percent). The main cause for this outcome is the decline in wholesale revenues, which represent services rendered to other telecommunications providers. Revenues from data services provided to businesses and government entities has been growing within advised ranges despite additional price pressure.
Wholesale revenues peaked as a percentage of data revenues in the first quarter of 2000 when they represented more than 15 percent of total data revenues. Since then, wholesale revenues dropped by half and should account for no more than 8 percent of data revenues in the second quarter of 2001. The decline was a result of the expiration of contracts of a short-term nature.
Bad debt expense will remain within the previously announced range of 8-9 percent of net revenues for the second quarter.
Embratel also advises that the currency profile of its debt has remained substantially the same since the first quarter of 2001. Second quarter results will be impacted by the devaluation of the Real.
Forward-looking Statements
This document includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to the effects of vigorous competition; the impact of technological change on our business, new entrants and alternative technologies, and dependence on availability of transmission facilities; risks of interest rate and foreign currency fluctuation; regulatory risks in Brazil and internationally; contingent liabilities; uncertainties regarding the collectibility of receivables; risks associated with debt service requirements and the impact of competitive services and pricing. More detailed information about those factors is contained in Embratel's filings with the CVM (Brazilian Securities Commission) and the SEC (United States Securities and Exchange Commission). The Company does not undertake any obligation to release publicly any revisions to its forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Embratel is the premier communications provider in Brazil offering a wide array of advanced communications services over its own state of the art network. It is the leading provider of data and Internet services in the country. Service offerings include: advanced voice, high-speed data communication services, Internet, satellite data communications and corporate networks. Embratel is uniquely positioned to be the all-distance telecommunications network of South America. The Company's network is has countrywide coverage with 28,388 km of fiber cables comprising 1,045,617 km of optic fibers. SOURCE Embratel Participacoes S.A.
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/CONTACT: Silvia M.R. Pereira, Investor Relations, +55-21-2519-9662, or fax, +55-21-2519-6388, or invest@embratel.com.br, or Wallace Borges Grecco, Press Relations, +55-21-2519-7282, or fax, +55-21-2519-8010, or cmsocial@embratel.net.br, both of Embratel/
/Web site: embratel.net.br |
