Rio de Janeiro, Brazil - April 26, 1999 - Embratel
Participações S.A. (Embratel Participações or the "Company")
(NYSE: EMT; BOVESPA: EBTP3, EBTP4; BVRJ: EBTP ON, EBTP PN), the company
that holds 98.8% of Empresa Brasileira de Telecomunicações S.A.
("Embratel"), today announced highlights results for the
quarter ending March 31, 1999. (All financial figures are in Reais and
based on consolidated financial statements in Brazilian GAAP -
"Legislação Societária").
Embratel Participações posted net revenues of R$1,216.4 million for
the first quarter which, slightly exceeded the fourth quarter of 1998.
The net loss for the period amounted to R$68.6 million, or (R$.21) per
thousand shares. This reflects an R$181 million after tax exchange
loss, (R$.54) per thousand shares, on the Company's foreign
denominated debt due to the devaluation of the Real, net of related
gains in foreign currency receivables.
First quarter voice and data revenues were flat relative to the
fourth quarter 1998. Data revenues rose 41percent when compared to the
first quarter of 1998. Similar comparison of voice revenues with the
first quarter 1998 are not meaningful because of the change in the
interconnection regime. Operating profit reached R$192.4 million in the
period ending March 31, 1999. This compares favorably to the R$101.1
million operating profit in the fourth quarter of 1998 considering the
R$62 million provision taken in that period for the change in the
pension fund and post-retirement benefit plans and the voluntary
dismissal program.
Compared to the first quarter of 1998, operating profit rose 13.7
percent.
Embratel Participações ended the quarter with a cash position of
R$821.2 million. Total debt outstanding as of March 31,1999 was
R$1,054.9 million. The average interest rate on the debt was
approximately 9.3 percent per annum.
In the beginning of April, Anatel ruled on three matters that
concerned Embratel. These decisions, in our view, assured the integrity
of the interconnection regime effective April 1998 and the transition
rules as interpreted by the Company. Furthermore, in early March 1999,
Embratel was awarded its first choice of PIC code - 21 - which
customers will dial for domestic and international long distance calls
starting July.
The Company's registration statement was made effective by the
SEC on March 16, 1999.
Embratel provides long distance and international telecommunications
services, in addition to 40 other communication services. Embratel has
the largest long distance telecommunications network in Latin America
and owns the only national and international Brazilian
telecommunications network directly connected to thousands of
companies. It is the main provider of high-speed data transmission and
Internet in Brazil, with the largest network of broadband optical fiber
cables, covering over 18,000 kilometers.
Note: Except for the historical information contained herein, this
news release may be deemed to include forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
that involve risk and uncertainty, including financial, regulatory
environment and trend projections. Although the company believes that
its expectations are based on reasonable assumptions, it can give no
assurance that its expectations will be achieved.
The important factors that could cause actual results to differ
materially from those in the forward-looking statements herein include,
without limitation, the company's degree of financial leverage,
risks associated with debt service requirements and interest rate
fluctuations, risks associated with any possible acquisitions and the
integration thereof, risks of international business, including
currency risk, dependence on availability of interconnection
facilities, regulation risks, contingent liabilities, and the impact of
competitive services and pricing, as well as other risks referred in
the company's filings with the CVM and SEC. The company does not
undertake any obligation to release publicly any revisions to its
forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
