Portugal Telecom has announced a near doubling in its first quarter revenues of EUR 1.72 billion, but a 56 percent drop in its profits of EUR 56.5 million.

The underlying EBITDA rose by 60% to EUR 571.7 million.

The sharp rise in revenues is related to the proportional consolidation of Brazil's Oi and Contax, 
from 1 April 2011, and Dedic/GPTI, as from 1 July 2011. Excluding the changes, organic revenues would have declined by 2.7 percent.

The drop in profits is mainly explained by the gain of EUR 38 million recorded in last year related to the completion of the disposal of the investment in UOL, and an increase in interest expenses primarily related to the EUR 51 million interest obtained in 1Q11 on the cash deposits in Brazilian Reais that were used to pay the investments in Oi and Contax on 28 March 2011.

In 1Q12, capex increased to EUR 259 million, as compared to EUR 122 million a year ago.

Net debt rose to EUR7.07 billion at the end of March.