Oi, a major Brazilian telecommunications provider, faces a severe financial crisis while navigating its second judicial reorganization since March 2023.
The company disclosed a first-quarter 2024 net loss of R$2.78 billion ($545 million), soaring 120% from the R$1.26 billion ($247.1 million) loss in the same period last year.
Furthermore, revenues slipped to R$2.18 billion (approx. $427.5 million), down from R$2.5 billion (approx. $490.2 million) the previous year.
Meanwhile, first-quarter operating expenses expanded dramatically, reaching R$2.36 billion ($462.7 million).
Routine EBITDA, a critical profitability metric before depreciation and taxes, fell sharply to a negative R$341 million ($66.9 million).
That was a marked decline compared to last year’s negative R$26 million ($5.1 million).
Thus, Oi’s net debt, calculated with amortized costs and discount rates ranging between 12% and 15%, reached R$25 billion ($4.9 billion), up from R$20.9 billion ($4.1 billion) in the same quarter last year.
In total, the company now bears a significant debt burden of R$38.5 billion ($7.5 billion).
Oi’s Q1 Losses Skyrocket 120% to $545 million
Oi closed its first judicial recovery process in 2022 after meeting all stipulated obligations.
However, despite adhering to the original debt repayment plan, Oi could not secure long-term sustainability.
Market shifts, particularly the decline in fixed-line telephone service demand, severely impacted revenue.
In 2016, these services brought in R$10 billion ($2 billion). However, revenue is now projected to fall below R$1 billion ($196.1 million) by 2024.
These challenges reveal a larger trend in which the pivot from traditional telephony to digital services transforms the telecommunications industry.
Therefore, Oi’s soaring debt and heavy losses emphasize the trials legacy telecom firms face amid this rapid evolution.
The resolution of Oi’s recovery will profoundly affect its stakeholders, workforce, and the country’s communications sector.
Achieving success will require strategic innovation and firm financial management to stabilize and expand in this fast-changing landscape.