Cellnex Obtains €24M Net Income in H1’16 as a recent Ibex 35 debutant

Cellnex buys El Corte Inglés' antenna business for € 70MCellnex will continue consolidating its leading position in Europe

Cellnex Telecom is the leading independent operator of wireless telecommunications’ infrastructure in Europe and is a newcomer to the Spanish stock exchange (it made its debut on June 9).  In the first half to June, the company obtained revenues of €338 million and EBITDA of €134 million. Net income reached €24 million compared to €18 million a year earlier. At end-June, Cellnex had a portfolio of 15,135 towers located in Spain, Italy, the Netherlands and France. Cellnex is a subsidiary of Abertis.

Cellnex CEO Tobias Martínez highlighted that “the results matched Cellnex’s forecasts for the first half of the year. Indicators such as revenue, EBITDA, the occupancy ratio of our infrastructure and ‘points of presence’ are all experiencing sustained growth. As for the latter ratio I would highlight the growth rate: 415 PoPs compared with 346 the previous half, up 20%.”

Cellnex President Francisco Reynés underlined “two characteristic elements of this first half-year: growth in key indicators and business activity in line with market expectations. The results also highlight our team’s ability not only to identify growth opportunities in Europe, but also to prioritise and deliver on them.”

In the same vein, Tobías Martínez noted that in addition to the day to day execution “we have not neglected the dynamics of the market in Europe. Cellnex has proved to be agile and responsive to opportunities. This is evident by the three acquisitions made so far this year: the 949 nodes structuring the small cells and DAS network from CommsCon in Italy; the 230 Bouygues Telecom sites in France; and the 261 Protelindo sites in the Netherlands. We continue to revalidate our position as an operator with a European reach with a business model in which the growth vectors will come from greater infrastructure sharing and the densification of networks based on ‘small cells’ and DAS to respond effectively to mobile broadband services.”

Organic growth, improved occupancy rate, investments, new DTT channels in Spain

Cellnex’s business segments comprise the following areas by revenue split: mobile telephony infrastructure contributed 55% of revenue, amounting to € 184 million; activity in the audiovisual broadcasting networks area contributed 33% of revenue, to the tune of € 113 million; business focused on security and emergency service networks and solutions for smart urban infrastructure management (IoT and Smart cities) contributed 12% of revenue, totalling € 41 million.

Cellnex Telecom had a total of 15,135 sites (7,718 in Italy and 7,417 in Spain) at the end of the first quarter of 2016), to which 949 nodes (DAS and Small Cells) managed by CommsCon in Italy are included.

Organic growth of points of presence over the existing stock of towers was up 2% with respect to the same period in 2015, while the occupancy rate per site was 1.56, rising from 1.50 in June 2015, the first period in which the Galata assets in Italy were consolidated, and from 1.54 in the first quarter of 2016. This is a reflection of business activity, with the signing of new service provision agreements with mobile telephony operators, telecoms operators and audiovisual communications groups in both Italy and Spain.

In the latter, income from the period includes the start of broadcasts from six new TV channels in late April. In the accumulated six-month figure, this line of activity remains affected by the lack of comparability with the first quarter of 2015 in which there was still a ‘simulcast’ (a parallel broadcast on two different frequencies) coinciding with the migration and freeing up of the 800 MHz band.

Investments for the period reached €46 million. Of this total, €19 million was related to the acquisition of CommsCon, while €27 million was earmarked for maintaining installed capacity, as well as investments linked to generating new revenue and greater efficiency. There was also improved operating costs thanks to renegotiating contracts relating to the sites in which the mobile infrastructures managed by the company are located.

Debt structure: available credit lines extended by €125 million

At the close of the first half of 2016, Cellnex maintained a stable, long-term debt structure, with an average life of 5.6 years, an average annual cost of 2.1%, and of 57% referenced to a fixed rate. Cellnex Telecom’s debt is not subject to any type of covenants.

Cellnex extended its available credit lines by € 125 million with maturities between 2019 and 2021 at a cost of 1%. Cellnex has therefore extended its total debt limit to € 1.225 billion.

The Company’s net debt at 30 June stood at € 872 million, compared to € 927 million at the end of 2015, a reduction of 6%. The annualised net debt/EBITDA ratio was 3.3x compared to 3.7x in December 2015.

*Image: Cellnex

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.