The Euskaltel Group posts a net profit of Euros 23 million for the first six months of the year
o 24,000 new postpaid mobile lines, now exceeding the 1.15 million figure.
o 7,000 new broadband services, up to 587,000.
o 10,000 new Pay TV services, now exceeding 465,000 and representing over 60% of the customer base.
o Fixed voice services grew by 3,000, totalling over 621,000.
Bilbao, 26 July 2019. The Euskaltel Group -comprising the Euskaltel, R and Telecable brands- this morning presented its data for the second quarter of 2019. This is the first public presentation of results following the approval and implementation of the company's new roadmap, delivered by the Group's new CEO, José Miguel García, and the aim is to generate profitable growth and create shareholder value.
The first results following approval of the Group's new roadmap reflect a change in business trends for the second quarter. The Group grows in terms of customer base and profitability with a 4% increase in EBITDA and a 2% rise in gross margin, whilst expanding the high value household and business customer base across all services: broadband, Pay TV, mobile and fixed-line telephone services.
Due to quality revenue and the management of cost control processes undertaken in the second quarter, at 30 June 2019 the Euskaltel Group posted net profit of Euros 23 million and revenues of Euros 342.8 million.
EBITDA is up to Euros 84.4 million -Euros 165.5 million in the first half of the year-, increasing 4% on the previous quarter with a 49.4% revenue margin, which is an all-time record for the company in the last five quarters and an increase of 21 basis points compared to the previous quarter. The second quarter rise in EBITDA is due mainly to the gross margin increase -with a revenue margin of 73.6% compared to 71.1% in the previous quarter-, as a result of an increase in higher quality revenue and the cost control measures put in place.
Operating cash flow (the difference between EBITDA and investments) stands at Euros 46.1 million in the second quarter -Euros 92.6 million in the first six months of the year-, representing a revenue margin of 27% and positioning the Euskaltel Group as a clear leader in the telecommunications industry.
The company's solid cash generation has enabled the distribution of a Euros 55 million dividend ?a Euros 25 million interim dividend on 7 February and an additional Euros 30 million dividend on 9 July?, representing a return of 4.2% over the weighted average share price in 2018 and 11.5% more than the prior year.
Together with the company's strong performance, the second quarter of the year was also marked by consolidated growth in the Group's customer base. The last three months have seen a change in trend with growth of more than 4,000 net registrations in the mass market (up to 772,000 customers), due mainly to the results of the Group's expansion plan beyond its local markets into Navarre, la Rioja, Leon, Cantabria and in Catalonia with the RACC.
The Group's high value customer base has continued to growth in the second quarter. This quarter's balance sheet shows an increase in contracts for products and services by Euskaltel, R and Telecable customers across all business areas with 43,000 new contracts, taking the total to over 2.8 million products under contract. In this regard, the portfolio of high added-value customers on 3P and 4P contracts continues to grow to the industry's highest levels, with an average record figure of 3.66 products per user.
Second quarter growth is based on the strong performance of all business segments and areas. The mobile phone segment has built on its dominant position with 24,000 new lines, taking the total to over 1.15 million postpaid mobile lines.
In terms of Pay TV, the Group has recorded 10,000 new services in the last three months, exceeding 465,000 and representing penetration of over 60% of the company's customer base.
Over 7,000 new contracts for broadband services take the total to 587,000 and there are over 3,000 new fixed voice services, which increases the figure to 621,000 at the end of the quarter.
As a result, growth in the high value customer base has led to a revenue increase of 1.3% in the mass market during the second quarter up to Euros 136.9 million. This increase marks a turning point with regards previous quarters, due mainly to the success of the expansion plan in the new territories.
In the business market, the increase in customers confirms the positive trend seen this year. This growth is based on the launch of products for SMEs and advanced services on the FTHH network.
It is important to note the clear change in trend in terms of the Group's total revenue ?mass market plus the business market?, which is close to positive growth in the first six months of the year.
Data for 2Q 2019 are beginning to reflect the results of the new roadmap presented by the Group's new CEO, José Miguel García, which was unanimously approved by the Euskaltel Group's Board of Directors and is aimed at generating profitable growth and creating shareholder value.
The new roadmap has kicked off with the putting in place, in record time, of a new simplified, integrated and fully operational organisational structure across the three brands, based on best market practice. All of the company's operational resources have been organised around the mass market business units (covering the residential and soho segments) and the business markets (SMEs and large accounts) with a single, integrated technology factory for the three brands that supports the company's business strategy, with a consistent and valuable offer for customers.
In these first few weeks we have reached the milestone of launching for the first time in the Group's history an offer of unique and consistent value across the three brands, with a campaign involving the popular chef and TV personality, Karlos Arguiñano.
The Group's strategy is based on the strength of its brands ?Euskaltel, R and Telecable? in their relevant markets and aims to further reinforce the solid roots of its brands in their regions.
By strengthening the Group in its local markets, implementing the single operating model across the three brands and on the basis of the value offerings for customers that have led the Group's brands to build on their leading positions in their regions and successfully tackle the start of the expansion process into the regions neighbouring their local markets, the Euskaltel Group will approach national expansion, meaning access to a market that covers 85% of the territory it is not yet present in and which represents an excellent opportunity for growth and profitability.
Euskaltel - Communication department