Telefonica (BME:TEF) Brasil (NYSE:VIV) S.A. (B3: VIVT3; NYSE: VIV), the leading telecommunications company in Brazil, announced today an expansion of its share buyback program.
The company's Board of Directors approved increasing the maximum amount of resources allocated for share buybacks from R$1.0 billion to R$1.5 billion. This amendment retains the original terms and conditions of the program, which was initially disclosed on March 4th, 2024, and in material fact released on March 5th, 2024.
The program aims to acquire common shares for treasury purposes, future cancellation, or sale, without reducing capital stock. This strategy aims to enhance shareholder value by efficiently applying available cash resources and optimizing capital allocation.
The share repurchases will utilize funds from statutory profit reserves and may include the current fiscal year's results, in compliance with CVM Resolution 77/2022. The program, which began on March 5th, 2024, is set to conclude by March 4th, 2025. The acquisitions will occur at market prices on the stock exchange (B3 – Brasil, Bolsa e Balcão).
As of the record date of July 31st, 2024, the company is authorized to acquire up to 30,332,692 common shares, considering the 10,499,456 shares already held in treasury.
The financial institutions that may intermediate the buyback operations include Ágora Corretora de Títulos e Valores Mobiliários S.A., BTG (LON:BTG) Pactual Corretora de Títulos e Valores Mobiliários S.A., Itaú Corretora de Valores S.A., Santander (BME:SAN) Corretora de Câmbio e Valores Mobiliários S.A., and XP (NASDAQ:XP) Investimentos CCTVM S.A.
The information provided in this article is based on a press release statement from Telefonica (NYSE:TEF) Brasil.
In other recent news, Brazilian telecommunications heavyweight Vivo has reported robust Q2 2024 earnings, showing significant growth in total revenue, EBITDA, and net income. This performance was driven by an expanding customer base and advances in mobile and fiber-to-the-home connectivity. Total revenues increased by 7.4%, with mobile service revenues up by 8.8%, while EBITDA and net income grew by 7.3% and 8.2% respectively year-over-year.
Vivo's B2B digital services and new businesses now represent 9.9% of total revenues, demonstrating the company's commitment to digital transformation. The company's mobile access exceeded 100 million, with the postpaid share growing at a rate of 7.2% year-over-year. Vivo's fiber operation connected 6.5 million homes, showing a 4% growth in ARPU.
Despite increased operational costs due to heightened commercial activity, Vivo's operating cash flow remained robust at R$6.5 billion in the first half of the year. The company expects continued growth in EBITDA and a potential reduction in interest rates. Lastly, Vivo is exploring M&A opportunities in broadband and B2B sectors, focusing on the right pricing, footprint, and technical quality, and has applied for an SCD license from the Central Bank to enhance its services.
InvestingPro Insights
Telefonica Brasil's recent announcement of the expansion of its share buyback program is a strategic move that aligns with its robust financial standing. Real-time data from InvestingPro underscores the company's financial health. Telefonica Brasil, trading under the ticker VIV, boasts a market capitalization of $15.31 billion, demonstrating its significant presence in the market. The company's Price-to-Earnings (P/E) ratio stands at 15.96, reflecting investor sentiment on its earnings potential. With a P/E ratio (adjusted) for the last twelve months as of Q2 2024 at 15.31, VIV exhibits stability in its valuation over time.
Additionally, InvestingPro Tips highlight that Telefonica Brasil has a perfect Piotroski Score of 9, indicating top-notch financial health. This is further supported by the fact that analysts have revised their earnings upwards for the upcoming period, suggesting confidence in the company's future performance. The company's stock is known for its low price volatility, which may appeal to investors seeking stable returns. With a consistent track record of dividend payments for 26 consecutive years and a current dividend yield of 4.36%, VIV stands out as a potentially attractive option for income-focused investors. It's also noteworthy that the company is trading near its 52-week high and has shown a strong return over the last three months, with an 11.58% price total return.
For investors looking for deeper insights, there are additional InvestingPro Tips available at https://www.investing.com/pro/VIV. These tips could provide further guidance on the company's performance and potential investment opportunities.
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