The Euskaltel Group reports record profits of 62.8 million for 2018, up 26.6%
Bilbao, 28 February 2019. The Euskaltel Group broke its own record at the end of 2018, with net profit of Euros 62.8 million, which is 26.2% up on the prior year. The leading operator in the North of Spain generated income of Euros 691.6 million, which is 11.2% more than in 2017.
As explained by the company at the presentation of results submitted to the Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores, CNMV) today, these figures have been achieved thanks to the Group?s strategy of bundling and offering high added-value product packages. In 2018, Euskaltel Group customers had contracts for an average of 3.6 products per user, compared to the 3.5 recorded in 2017.
EBITDA hit Euros 336.4 million, up 9.6% compared to the prior year. Similarly, the EBITDA margin has continued to grow during 2018, gaining 42 basis points to reach 48.6% of income. This figure places the Euskaltel Group among the top 3 European players in the sector.
Euskaltel's Board of Directors has proposed a final dividend of Euros 0.31 per share to be paid against 2018 results based on net profit obtained, which should be approved at the General Shareholders' Meeting. This dividend reflects a 4.2% return on the weighted share price for 2018 and 11.5% more than the dividend distributed last year.
Alberto García Erauzkin, the Euskaltel Group's chairman, noted that "during 2018 we have continued to see sustainable growth, strengthening our business, expanding our customer base, increasing profits and leading the digital drive in the communities we operate in. These results enable us to deliver a solid shareholder remuneration policy through the distribution of dividends with sustainable double-digit growth, fulfilling the commitment announced to the market".
The Euskaltel Group's CEO, Francisco Arteche, stated that "the figures recorded in 2018 and the development of our geographical expansion plan show that the Euskaltel Group is following a solid path of growth. We are confident in our strategic plan and aim to close 2022 with income of 800 million and EBITDA of 400 million".
The leverage ratio is improving, with a debt ratio of 4.45 times EBITDA, after a Euros 74.4 million drop in debt in 2018.
Operating cash flow came to Euros 182.9 million with a 26.4% revenue margin, which would rise to 31.8% if the Group's integration and expansion plans were not taken into consideration. Thus, the Euskaltel Group reaffirms its position as leader among European operators in terms of cash flow generation.
Furthermore, the company?s rate of average revenue per user (ARPU) is strong, at Euros 59.50 a month. This is thanks to its bundle offerings, which bring quality services and offer added value to Euskaltel Group customers.
As a result of the Euskaltel Group's convergent product bundling strategy, the number of customers with 3P and 4P contracts has reached 69.7% of total customers, up 168 basis points, compared to the 68% share recorded at 2017 year end.
The number of products contracted in the residential segment increased by 64,000 with respect to the previous year, with the number of products contracted reaching almost 2.4 million in 2018, despite the fiercely competitive market setting.
In terms of the business segment, income generated by SMEs and large accounts reflects growth of 3.5% and these figures show an upturn in the trend in the fourth quarter, thanks to the measures implemented throughout 2018.
The Euskaltel Group's business plan also foresees maintaining a stable customer base in its traditional markets over the next few years. In fact, the operator has achieved positive net customer registrations in 2018 and has grown in three of the last four quarters. The fourth quarter has been particularly notable, with over 2,000 net customer registrations. In addition, the company expects to continue increasing its average monthly revenue per user (ARPU rate) throughout the plan, thanks to its outstanding offering and its efficiency and content.
By product type, the operator has consolidated its leading position in the mobile phone segment, adding 43,300 new lines and expanding to reach a total of 958,000 mobile lines at year end. The television service gained 23,000 customers, reaching a total of 417,000 thanks to the value proposal offered by the Euskaltel Group and the strengthening of the 4K Android TV decoder, as well as the integration of platforms such as Netflix and Amazon. In addition, broadband product contracts were over 497,000, after increasing by 8,500 this year.
The Euskaltel Group has a long-term vision and vocation for permanence, with its strong technological component being the foundation of its differentiation, meaning the company is fully prepared to grow and break into new markets. Thus, its strategy is based on four mainstays. First, it works on satisfying its users? needs, maintaining its leadership in the residential segment thanks to factors such as the unique experiences it offers in television, WiFi, broadband and mobility.
Secondly, the telecom operator has once again grown in the B2B segment, thanks to a unified sales strategy, its new range of products and services, alliances with the top players on the market and the global scope of its products and services.
Furthermore, the company has drawn up a simplification, transformation and digitalisation plan, which includes a single system platform and new CRM procedures, among other improvements. The Euskaltel Group is leading the sector?s transformation by actively listening to its customers? needs, offering the high quality services and content that consumers want.
Arteche commented that "at the Euskaltel Group we are making the way we operate easier in order to help our customers, who are at the centre of all our business activity. An example of this is how the number of calls to our customer care centre has dropped by 17% in the past year".
Lastly, the group is in the midst of its geographical expansion plan, which will be undertaken throughout 2019 across five new markets -Navarre, Cantabria, León and La Rioja- due to geographical proximity, as well as Catalonia, where it markets its products and services under the RACCtel+ brand, after reaching an agreement with the insurance company RACC. This plan, together with the agreement between the Euskaltel Group and Orange, gives the operator potential access to over 10 million new homes in Spain.
García Erauzkin highlighted that "moving into new markets, whilst strengthening our presence in traditional markets, will allow us to continue increasing our income and our customer base, fulfilling the commitments made to our stakeholders".
Euskaltel - Communication
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