August 1, 2014 / 1:30 AM / in 3 years

Brazil's TIM net profit down 5.2 pct in second quarter

SAO PAULO, July 31 (Reuters) - TIM Participaçoes SA , Brazil’s No.2 wireless phone company, posted a 5.2 percent drop in second-quarter profit from a year ago as a weak economy and World Cup holidays hurt sales.

The Brazilian unit of Telecom Italia posted second-quarter net income of 366 million reais ($161.70 million) in a securities filing on Thursday, matching an average forecast of 369 million reais in a Reuters survey of analysts.

The company said in a separate filing that its board appointed Guglielmo Noya to replace Claudio Zezza as TIM’s chief finance officer.

Stagnant job growth and stubborn inflation have battered consumer confidence over the past year, sapping household demand even for less discretionary spending such as telephone services.

Net revenue edged down 3.4 percent from a year earlier, while consumer prices rose over 6.5 percent in the 12 months through June, breaking the ceiling of a government target. TIM’s operating costs dropped 7.2 percent in the second quarter due to the good performance of interconnection networks costs.

Earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, rose 8 percent to 1.331 billion reais, in line with an average forecast of 1.312 billion reais. ($1 = 2.2634 Brazilian Reals) (Reporting by Alonso Soto; Editing by Lisa Shumaker)

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