NII Holdings Reports Fourth-Quarter, Full-Year Financial Results
Thursday, March 09, 2017 | Comments

NII Holdings, which offers wireless service in Brazil under the Nextel brand, announced its financial results for the fourth quarter and full year of 2016.

For the quarter, the company generated consolidated operating revenues of $248 million and a consolidated operating loss of $57 million. For the full year, the company generated consolidated operating revenues of $985 million and a consolidated operating loss of $1.53 billion. Capital expenditures were $26 million for the quarter and $51 million for the full year.

The company reported 3G net subscriber additions of 39,600 in the quarter, which were offset by 110,100 subscriber losses on the company’s iDEN network.

“During the year, our team in Brazil made significant progress in our efforts to turn around our business, leading to better operating trends on our 3G platform, including increasing local currency average revenue per user (ARPU) and decreasing churn,” said Steve Shindler, CEO. “Heading into 2017, we are focused on continuing to improve our 3G operations while managing the decline of our iDEN business. At the same time, we are actively exploring strategic options to provide sources of funding that will allow us to meet our future obligations and grow our business or find a buyer for our company."

Nextel Brazil's average monthly service ARPU for the fourth quarter of 2016 was $20, a 26 percent increase on a reported basis, and an 8 percent increase on a constant currency basis, compared with the same quarter last year. Nextel Brazil's average monthly churn rate for the fourth quarter was 3.65 percent, a 9 basis point decrease compared to the same quarter last year.

At the end of 2016, the company's sources of funding included $331 million of cash and short-term investments, $163 million of cash held in escrow to secure indemnification obligations in connection with the sale of Nextel Mexico and $87 million in cash pledged as collateral to secure certain performance bonds in Brazil. During 2017, the company is required to pay an estimated $225 million for principal and interest in connection with its debt service obligations, including capital leases, and expects operational free cash burn to be between $200 million and $250 million.

“The challenges we're facing in Brazil and our ongoing debt service requirements are continuing to place significant pressure on our liquidity,” said Dan Freiman, chief financial officer (CFO). “As previously announced, our local lenders in Brazil agreed to a standstill agreement during which time we will collaborate with them to work through long-term modifications to the loan agreements that better align with our business and allow us to continue to invest in our Brazilian operations.”

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