Portugal Telecom 2Q Net Profit Up, Helped By Brazil Operations"

LISBON -(Dow Jones)- Portugal Telecom, Tuesday reported a 32.7% rise in second quarter net profit from a year earlier, with improved performance in its Brazilian unit Vivo Participacoes offsetting the negative contribution of its domestic wireline business.

Portugal Telecom, which managed to fend off a hostile bid from smaller rival Sonaecom earlier this year, said net profit in the second quarter rose to EUR252.5 million, compared with EUR190.7 million a year earlier.

The average forecast of four analysts polled by Dow Jones Newswires forecast a net profit of EUR141.9 million.

Portugal Telecom's revenue for the second quarter rose 8.7% to EUR1.5 billion, from EUR1.38 billion, while earnings before interest, taxes, depreciation and amortization, or EBITDA, rose 27.2% to EUR576 million compared with EUR452.7 million.

The company's best performing business was Vivo, where revenue grew 12.4% to EUR593.8 million in the three months to June 30.

Vivo is Brazil's largest cellphone company and is jointly owned by PT and Spain's Telefonica.

Portugal Telecom's domestic wireline revenue fell 5.7% to EUR493.6 million, as traffic revenue fell 7.1%. Fixed charges were also down due to commercial pressure. The broadband segment partially offset this performance, with revenue rising 12.5% to EUR715 million.

Revenue from the company'sdomestic mobile operator TMN grew a modest 1.1% to EUR364.8 million, capped by reductions in fixed-to-mobile and mobile-to-mobile interconnection rates.

Average revenue per user, or ARPU, was down 6% at EUR19.7.

PT is also active in Angola, Macao, Cape Verde, East Timor, Sao Tome e Principe and Morocco

In the first half, PT launched an internet protocol television, or IPTV, service, but hasn't so far provided investment or subscriber figures.

Portugal Telecom shares closed down EUR0.10, or 1%, at EUR10.33 in an overall lower market Monday.

-By Filipa Cunha and Jason Sinclair, Dow Jones Newswires; +351-21-3191863; filipa.cunha@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 7th August 2007