Chile's Entel Jumps After Posting `More Sweet Than Sour' Results

  • Company is among the top performers in Chile's IPSA this year
  • Peruvian unit continues to show losses on expansion costs

Chile’s Empresa Nacional de Telecomunicaciones SA, the phone company whose controlling stakeholders include the billionaire Matte family, extended this year’s advance as sales beat analysts’ estimates even after the company posted its first loss since 1998.

The shares climbed 1.2 percent to 6,512.3 pesos, after earlier rallying as much as 5.9 percent. Entel, as the company is known, is one of the six stocks out of the 40 in Chile’s benchmark IPSA index posting gains in 2016. The index closed 1.3 percent higher on Thursday.

The phone carrier’s fourth quarter was “sweet and sour, though in net terms it ended up being more sweet than sour,” analysts at EuroAmerica wrote in a note to clients.

Entel’s revenue jumped almost 8 percent to 1.79 trillion pesos ($2.5 billion) in 2015, exceeding the average estimate of analysts tracked by Bloomberg. The Santiago-based company reported a loss of 1.1 billion pesos, while its earnings before interest, taxes, depreciation, and amortization dropped more than 3 percent. Still, the company said in a statement that, excluding the Peruvian operations, Ebitda increased 10 percent.

Almost three years after its $411 million acquisition of Nextel Peru, Entel is struggling to boost market share in a country where billionaire Carlos Slim’s America Movil SAB and Telefonica SA, Spain’s largest telephone company, already have a significant presence. Entel is betting on Peru as it faces an increasingly saturated market in Chile. The Peruvian unit will continue to generate negative numbers this year, because of expansion costs, but Entel’s strategy is going in the right direction, analyst Andrea Neira at Corpbanca in Santiago wrote in a note to clients.

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