Oi (OIBR4) Q3 2024 earnings summary

Executive summary

• Achieved a 60–70% reduction in net debt through restructuring, with creditors set to hold about 79–79.3% of capital following capital increase approvals and new governance.

• Advanced asset sales, including the selection of V.tal's R$5.7 billion offer for UPI ClientCo, pending regulatory and court approvals, though lacking a cash component and impacting liquidity.

• Judicial Reorganization and New Judicial Recovery Plan (New JRP) approved, aiming to ensure operational viability and address accumulated losses and excess liabilities.

• Focus remains on profitability, efficiency, and legacy cost reduction, with ongoing migration to the authorization regime.

• Material uncertainty remains regarding going concern due to significant accumulated losses and excess liabilities over assets.

Financial highlights

• Q3 2024 net revenue was R$2.1 billion, down 14.4% year-over-year, mainly due to legacy and non-core service declines.

• Core revenue represented 75% of total, with Oi Fibra at R$1.1 billion (+2.8% QoQ), while Oi Soluções revenue fell 26.6% YoY.

• Routine EBITDA margin dropped to 5.3% (3Q24), with routine EBITDA at R$109 million, and gross margin turned negative for the nine months.

• Capex was R$109 million (5% of revenue), down 45.9% YoY; 91% allocated to core operations.

• Cash position at quarter-end was R$1.3 billion, down 31.6% QoQ and 47.4% YoY.

Outlook and guidance

• Focus on completing regime migration, resuming arbitration, and maximizing profitability in core operations.

• Additional cost reduction initiatives and asset sales planned to improve profitability and liquidity.

• Discontinuation of previous projections due to changes in expected cash proceeds from UPI ClientCo sale.