Oi (OIBR4) Q2 2024 earnings summary

Executive summary

• Completed a major debt restructuring under a new judicial reorganization plan, reducing financial debt by up to 70% and improving the debt profile, with major amortizations starting in 2027.

• Net profit for 2Q24 reached R$15.1 billion, and H1 2024 net profit was R$12.27 billion, both driven by non-recurring gains from debt restructuring.

• Focus shifted to B2B operations and digital solutions, with core revenues now representing 72–73% of total revenue.

• Asset sales, including UPI ClientCo and V.tal stakes, and real estate monetization are underway to further reduce debt and streamline operations.

• Regulatory progress on legacy migration and cost reduction is ongoing, though subject to approval delays.

Financial highlights

• Net revenue for 2Q24 was R$2.1 billion, down 13% year-on-year, mainly due to declining legacy and non-core revenues.

• Core revenue (Oi Fibra and Oi Soluções) accounted for 72–73% of total, with Oi Fibra revenue at R$1.1 billion, stable year-on-year.

• Routine EBITDA margin improved to 5.3% in 2Q24 from -9.2% in 1Q24, but was negative R$89 million in some reports due to legacy losses.

• Capex was R$137 million (6.5% of revenue), a 47.7% year-on-year drop.

• Cash position at quarter-end was R$1.9 billion, down 8% sequentially.

Outlook and guidance

• Capex expected to remain below R$500 million for the year, with a focus on B2B, long-term contracts, and a capex-light model.

• Asset sales (ClientCo, V.tal, and real estate) are planned to further strengthen liquidity and reduce debt.

• Migration from concession to authorization regime and further cost reductions are expected, though timing is impacted by regulatory delays.