SAO PAULO, Oct. 21 /PRNewswire-FirstCall/ -- Net Servicos de Comunicacao S.A. (BM&FBovespa: NETC3 and NETC4; Nasdaq: NETC; and Latibex: XNET), the largest cable company in Brazil and one of the largest in Latin America with integrated services that include Pay TV ("NET"), Digital Video ("NET Digital"), High Definition Digital Video ("NET Digital HD"), bidirectional broadband internet access ("NET Virtua") and voice ("NET Fone via Embratel"), today announces its results for the third quarter of 2009 (3Q09). NET has been following a conservative cash policy to ensure the execution of its sustained growth strategy, so that its organic growth does not depend on the capital market conditions but is driven by strong operational cash flows. In line with this policy, NET has also been extending its debt profile, which minimizes refinancing risks. Driven by the belief there is still room to continue its accelerated growth strategy, the Company negotiated with investors and creditors to postpone the maturity for payment of the principal amount of the 6th Debenture Issue and CCB. This negotiation enabled it to maintain its current debt and improve the debt profile, whose amortization schedule now involves no payment of principal till 2012. With this, the Company extended the period during which its operational cash flow will be invested to sustain the Company's growth. Moreover, in recognition of this initiative and the consistency with which it has executed its plan, NET's credit risk ratings were raised by Standard & Poor's Ratings Services (BB+) and Moody's Investors Service (Ba1). The Company maintained its growth pace across all its products. The Pay TV client base totaled 3,645,000 in the quarter, 25% higher than the 2,923,000 in 3Q08. The Broadband base totaled 2,790,000 clients in 3Q09, 35% up on the 2,059,000 in 3Q08. The number of Fixed Telephone Lines in Service increased by 63%, from 1,532,000 lines in 3Q08 to 2,489,000 in 3Q09. The financial performance remained consistent and in line with operational growth. Net Revenue increased by 26% in the quarter, from R$ 948.0 million in 3Q08 to R$ 1,195.3 million in 3Q09, thanks to the growth in the subscriber base. In 3Q09, Operating Costs stood at R$ 591.1 million, 28% higher than the R$ 460.3 million in 3Q08. As a percentage of net revenue, these costs climbed up from 48.6 % to 49.4%. The key factors behind the increase were the contracting of link for internet access, call center, payroll and benefits. Selling, General and Administrative Expenses totaled R$ 278.9 million in 3Q09, 20% up on the R$ 230.6 million recorded in 3Q08, but as a percentage of net revenue, fell from 24.4% to 23.3%. General and Administrative Expenses rose by 25%, mainly due to the increase in maintenance expenses for number portability systems and the higher payroll expenses. As a percentage of net revenue, General and Administrative expenses remained practically stable at 11.2%. Selling expenses increased 1% as a result of increased payroll expenses, taxes and benefits, and as a percentage of net revenue, declined from 13.1% in 3Q08 to 10.5% in 3Q09. EBITDA before Selling Expenses was R$ 447.3 million in 3Q09, 20% higher than the R$ 371.4 million in 3Q08. EBITDA totaled R$ 322.2 million in the quarter, up by 30% on the R$ 247.5 million in 3Q08. Capex totaled R$ 238.5 million, an 8% reduction year-on-year, due to the appreciation of the Real against the U.S. Dollar, which reduced the cost of equipment. Note that Capex remains consistent with the Company's additions, underlining the business model whereby the major portion of investments is related to growth. Of the total investments, the variable portion represented 81% and was allocated to purchase equipment and residential installations, both related to subscriber acquisition and infrastructural adjustments, such as node breakings. The fixed portion represented 19% and was allocated mainly to improve network quality. Upcoming Events 1. Conference Call - 3rd Quarter 2009 Earnings Release Date: October 21, 2009 BR GAAP (in Portuguese): 08:00 a.m. (NY Time) Phone: +55 (11) 4688-6361 Code: Net Servicos Replay till October 27, 2009: +55 (11) 4688-6312 Replay Code:275 BR GAAP (In English): 10:00 a.m. (NY Time) Phone: +1 (412) 858-4600 Code: Net Servicos Replay till October 29, 2009: +1 (412) 317-0088 Replay Code: 434261# Live webcast at: http://ir.netservicos.com.br/ 2. Expected Dates for Upcoming Results 4th quarter 2009 > February 10, 2010 DATASOURCE: Net Servicos de Comunicacao S.A. CONTACT: IR Contact: Marcio Minoru, Capital Markets and IR Officer; or Adriana Godinho, IR Manager; or Maria Siqueira, IR Analyst; or Sandra Firmino Santos, IR Analyst, Phone: +55 (11) 2111-2721. Web Site: http://ir.netservicos.com.br/

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