In what has become a pattern, America Online Latin America Inc. reported a drop in revenue, a reduction in membership and a smaller net loss in its most recently completed quarter compared with the same period in the prior year.
For its fourth quarter of 2003, ended Dec. 31, total revenue fell 16 per cent to US$14.9 million, with reductions in both of the company’s revenue segments: subscription revenue shrunk 10 per cent along with the contracting membership rolls, while advertising and e-commerce revenue tumbled 57 per cent, AOL Latin America said in a statement Tuesday.
Meanwhile, AOL Latin America ended 2003 with 462,000 members, plunging from the 1.18 million members it had at the end of 2002, as the company reduced the number of members who don’t pay on time but also failed to offset membership turnover with new recruits. It faces strong price competition from Internet service providers in Brazil in particular, the company said. As it has always done, AOL Latin America counts among its members people who are in free trial periods.
AOLA closed the fourth quarter with a net loss of US$26.4 million, or US$0.20 per share, compared with a net loss of US$38.6 million, or US$0.58 per share in the same period of the previous year. The average number of outstanding Class A shares almost doubled in the fourth quarter of 2003 compared with the fourth quarter of 2002, which had the effect of reducing reported net loss per share disproportionately when comparing both quarters.
The company expects its cash on hand to fund operations through early 2005.
For the full year, the company had a net loss of US$116.6 million, or US$0.88 per share, compared with a net loss of US$180.6 million, or US$2.69 per share in 2002. Meanwhile, revenue fell 10 per cent to US$65.2 million.
AOL Latin America provides Internet service and content in Brazil, Argentina and Mexico and serves members of the AOL-branded service in Puerto Rico.
The announcement, made before the financial markets opened in New York, drove the company’s stock (AOLA) down 2.6 per cent to US$1.50 on the Nasdaq Exchange.