Portugal Telecom SA ADR Earnings Call Nuggets: Domestic EBITDA and GlobeNet
Portugal Telecom SA ADR (NYSE:PT) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
Mandeep Singh – Redburn Partners: Just a quick question on your domestic EBITDA. On the first quarter call you, we too expect you are comfortable with consensus of about EUR1.1 billion for domestic EBITDA. I just wanted to hear your thoughts on that again. That would require a significant reduction in the rates of decline year-over-year for the second half compared to the first half and if you are comfortable with that consensus what are the drivers of that reduction in the year-over-year decline in EBITDA?
Zeinal Bava – CEO: Just to address directly your question that we reiterate that our confidence suite, the consensus out there is around EUR1.1 billion basically that is on the back of continuous improvement in the efficiency on the cost side and also on the benefits that we’re seeing especially on the Personal segment on the revenue trends over there. Very recently and as Zeinal mentioned also in July we’ve seen very good demand for the services both on the Personal and on the Residential. So, we remain confident that we can deliver on the consensus that is out there.
Luis Prota – Morgan Stanley: Couple of questions, please. First in terms of Oi and now that you’re not providing guidance anymore, maybe you comment on consensus estimates for 2013 as you do for Portugal Telecom. I think that consensus EBITDA for Oi is between 8.6 8.7 so whether you’re happy with that one? The second question would be on African asset whether you might consider selling some or all of this assets further increase balance sheet flexibility? And finally, in terms of Oi’s parent company Telemar whether you have heard from them in terms of potential implications in the dividend cut in terms of potential need to capital injection? Thank you.
Zeinal Bava – CEO: With regards to Oi, as we said in the earlier call, we are disposing of certain assets. There’s a specific slide in our presentation that gives you, if you like, detailed inputs on that (today), in particular one disposal which is GlobeNet, which is our Company that had submarine cables and that alone will result in about EUR1.2 billion of EBITDA impact. So, with regard to this year’s EBITDA, which what had been indicated by the Company in the past is, it seems that it would include recurrent and non-recurrent. But from that standpoint, we are not changing anything that has been said in the past in that regard. With regard to the dividends, what I can say is the following. By taking a view over a full year period of distributing circa R$500 million we have essentially improved substantially the financial flexibility of Oi. This means that rather than us actually distributing R$8 billion we will distribute R$6 billion. And that was something which was decided at the Board level and we are very grateful because it shows that the Board is committed to actually correcting, if you like, the cash flow profile of the Company and you also will have seen that we have indicated that the Board will decide regarding an interim payment in October of circa R$500 million. So, therefore, that is, if you like, a package that we have announced today R$500 million per annum for four years as a minimum within those three criteria that we put out. But in respect to fiscal year 2013, we will have an interim of R$500 million and that of course will be accounted towards what we ought to pay in 2013 and with regard to (Timor part) I mean there is nothing else I can say, I cannot add much other than to say that we have this interim dividend and we believe that this interim dividend will allow all of us to actually live up to the obligations. Luis Pacheco will probably answer the third question. Thank you.