Annual Earnings

Algar Telecom’s investments in 2021 yielded earnings shared with shareholders, associates, creditors, suppliers and society as a whole. We earmarked R$690.9 million to connect new customers, drive growth, maintain and modernize our networks and operations. We also invested R$377.6 million in subsidiaries to grow our operations.

B2B Segment

Algar Telecom’s B2B customers - consisting of corporate (medium and large companies) and MSEs (micro and small enterprises) - grew 14.8% in 2021. The numbers were driven by geographic expansion and Algar’s acquisition of Vogel Telecom, resulting in a total of 183,700 customers in this segment.

Broadband revenues accounted for more than 40% of the segment’s revenues and grew 5.7%, stimulated by net revenues growing 16.7% to R$1,660.4 million in the year and accounting for 64% of our total revenue. Connectivity solutions, accounting for more than 50% of the segment’s revenues, grew 7.7% while revenues from IT services grew 53.0%.

By offering complete solutions that combine connectivity, IT and voice, we are able to meet our customers varying needs and develop more long -lasting partnerships, with higher average tickets and longevity for relations with our company, thus generating value for both sides.

B2C Segment

For residential customers (B2C), Algar Telecom’s focus has been expanding optical fiber networks to customers’ homes (FTTH) as a technology that delivers the high-speed quality internet connections that have become even more essential in the context of the pandemic. By the end of 2021, Algar’s fiber network passed through 94.7% of over 1 million households in its area of operation; of these households, 52.1% had Algar Telecom’s internet. As a result of these developments, by the end of 2021, 473,000 (93.5%) of Algar Telecom’s 506,000 residential broadband customers had optical fiber connections.

Net revenue

Our two customer segments were joined, and consolidated net revenue reached R$2,588.4 million in 2021 to show 10.1% growth against 2020.

Operating costs and expenses

Consolidated operating costs and expenses, excluding amortization and depreciation, totaled R$1,473.4 million in 2021 to show 11.5% growth against 2020. Excluding one-off effects that impacted both years (R$21.1 million in 2020, as disclosed above, and -R$4.5 million in 2021), growth was 9.4%. The main changes were in the accounts of third-party services, means of connection and personnel, in line with our growth movement and they were also impacted by expenses incurred for Vogel Telecom acquisition and integration processes.

EBITDA

Algar Telecom’s EBITDA reached R$1,115.0 million in the year and showed an increase of 8.3% against 2020. Excluding one-off effects in 2020 and 2021, EBITDA evolution was 10.1% and rose from R$1,009 million to R$1,011 million. Growth of B2B customer operations and efforts to digitize processes contributed toward this result, with a positive impact on customer experience and business efficiency. EBITDA margin remained stable at 42.9%, impacted by one-off expenses for the Vogel Telecom acquisition and integration process.

Net income

R$229.5 million net income showed 13.4% growth against 2020’s R$202.4 million.

Investments

Algar Telecom invested R$690.9 million in its operations in 2021. Of this amount, R$589.6 million was allocated to connect customers and expand networks plus R$101.3 million to maintain operations. In addition, in this year, we acquired Vogel Telecom for approximately R$600.0 million and expanded its operations in regions with high telecom consumption potential. 

Debt

As of December 31, 2021, our gross debt (ex IFRS16) stood at R$2,737.3 million, 11.5% higher than 2020’s. Net debt rose 33.3% to reach R$2,456.6 million. These growth numbers were mainly due to our funding in August 2021 amounting to R$700 million, through the 11th public debenture/bond issue to finance the acquisition of Vogel Telecom. As a result of this movement, our Net Debt/EBITDA indicator ended the year at 2.15x.

Directly generated and distributed economic value (R$ Million)