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MeneameNII Holdings (Nasdaq: NIHD), which operates the Nextel brand of trunking and 3G services in Latin America, raised guidance for key indicators for 2010 after posting a strong Q2, boosted by continued growth in Brazil and recovery in Mexico, NII's head of investor relations Tim Perrott told BNamericas.
NII posted a decrease in net profit to US$75.5mn in 2Q10 from US$134mn in the year-ago quarter.
Revenues rose year-on-year by 28% to US$1.35bn from US$1.06bn. The company's subscriber base rose 22% to 8.2mn in the quarter.
"Financially and operationally the quarter was very strong and really based on the first quarter results and the results for this quarter. We ended raising 2010 guidance measures for all metrics, net subs, for revenues, for Oibda and of course we're going to invest more in capex because of faster growth," Perrott said.
NII's Nextel brand operates in Mexico, Brazil, Argentina, Peru and Chile.
UPDATED GUIDANCE
The company reported Thursday that revenues are now projected to be US$5.4bn-5.5bn compared to the original forecast of US$5.2bn-5.4bn, while Oibda is projected to be US$1.35bn-1.43bn compared to the original forecast of US$1.25bn-1.35bn.
NII updated its guidance for capex to US$925mn-975mn from US$850mn-950mn due to higher-than-expected subscriber growth as well as investments relating to the development of the company's 3G network in Chile, which is expected to be operational in 2011, and the enhancement of coverage in Brazil.
The updated guidance for subscriber additions is 1.45mn-1.52mn from 1.27mn-1.37mn.
Nextel Brazil posted revenues of US$578mn in Q2, up from US$360mn in the year-ago quarter, and added 203,900 subscribers.
"We're very excited with the strong growth in Brazil, where the economy continues to be very solid. Brazil has become our fastest growing market. We're excited about not only the growth but the profitability of that market so we've been able to focus on driving subscriber growth and healthy margins," Perrott said.
After a difficult 2009, when NII's traditional flagship operation Nextel Mexico suffered partly due to the flailing economy, the company posted improved revenues in 2Q10 of US$503mn up from US$405mn a year ago. Net subscriber additions totaled 93,200 from 18,900 in the year-ago quarter, while churn fell to 1.91% from 2.58% a year ago.
"The strategies we implemented over the past year in terms of customer retention and focusing on high quality customers has resulted in lower churn, compared to last year. The Mexican economy is more stable than in 2009 and that has helped," Perrott said.
To view the full quarterly financial report, use this link
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