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Portugal Telecom Q4 net profit doubles

Portugal Telecom reported a 100.3% jump in fourth-quarter net profit, boosted by a strong performance at Brazil's Vivo, and sharply beating expectations.

Net profit rose to €143.8 million ($181.8 million) in the three-month period while earnings before interest, taxes, depreciation and amortization fell 4.3% to €603.5 million. Revenue rose 5.1% to €1.7 billion.

“The numbers were far above expectations,” said Ricardo Seara, an analyst at BPI. “They were better than we expected above all because of Vivo.”

Revenues at Vivo, Brazil's largest mobile phone operator which is a joint venture between PT and Spain's Telefonica rose 11% to €768.5 million. EBITDA from Vivo jumped 40% to €230 million.

PT, which fended off a hostile takeover bid in 2007, said it would propose a dividend of €0.575 per share for 2008, the same as a year earlier.

Net profit in all of 2008 reached €581.5 million, down 21.6%, as PT suffered from higher financial costs through the year. PT's net debt rose 27% in 2008 to €5.57 billion.

EBITDA for the full year rose 3.7% to €2.44 billion.

Analysts surveyed by Reuters had on average forecast net profit of €93.3 million in the fourth quarter and EBITDA of €574.4 million.

For all of 2008 they had predicted a net profit of €530.4 million and EBITDA of €2.412 billion.

PT's shares trade around 10.6 times estimated 2009 earnings, compared with 8.45 times for Telefonica and 9.03 times for France Telecom. (Reuters)