Published:
Grupo Iusacell Announces 12% Nominal EBITDA Growth to Ps.460 Million in 2Q08
MEXICO CITY, July 24 /PRNewswire-FirstCall/ -- Grupo Iusacell, S.A.B. de
C.V. (BMV: CEL; LATIBEX: XCEL), the first provider of wireless cellular third
generation services inMexico with a national footprint, announced today net
revenue of Ps.2,661 million and EBITDA of Ps.460 million in the second quarter
of 2008.
In nominal terms -- considering each quarter figures in current
pesos -- revenue grew 9%, and EBITDA increased 12%.
"Revenue continued its positive trend and EBITDA has outpaced sales growth
for the eighth consecutive quarter, all in favor of strengthening our
profitability," said Gustavo Guzman, Grupo Iusacell Chief Executive Officer.
"The solid advance is even more significant taking into account that the base
period for comparison includes the results of the Grupo Iusacell and Unefon
merger."
"A year since our merger, we now have superior market positioning,
operative efficiency growth, and the most extensive and efficient third
generation network coverage inMexico," added Mr. Guzman. "We offer the
fastest data transmission service in the country, which in this quarter
contributed to the remarkable increase in the number of Mobile Broadband Users
(BAM) and allowed the successful commercialization of the unique Blackberry
Pearl third generation handset inMexico, as well as facilitating the
continued expansion of our postpaid subscriber base."
Second Quarter Results
The merger between Grupo Iusacell and Unefon Holdings took place in the
second quarter 2007, thus the second quarter of 2007 and 2008 financial
results are consolidated figures.
As we detailed in the previous quarter, this year changes in norms of
financial information were introduced. Under the new rules, the 2008 figures
are in current pesos, while the 2007 figures are in constant pesos as of
December of 2007.
Below are the financial results under the new rules:
2Q07 2Q08 Change
Ps. % Nominal*
Net revenue $2,516 $2,661 $146 6% 9%
EBITDA $420 $460 $40 9% 12%
Net income $141 $(228) $(369) ---- ----
Earnings per Share $1.12 $(1.82) $(2.95) ---- ----
Million pesos in constant purchasing power as of December 31, 2007 for
2Q07, and 2Q08 in current pesos.
EBITDA: Revenue less cost and operating expenses.
* Change in nominal terms is included to help in the analysis of this
report. The nominal change is equivalent to adding the accumulated inflation
between June and December of 2007 to the new financial reporting rules.
Net Revenue
Net revenue during the quarter increased 6% to Ps.2,661 million compared
to Ps.2,516 million in the same period of the previous year. Growth is due
mainly to higher incoming roaming revenues, postpaid rents of cellular
services, long distance communication and data service income from our 3G
EV-DO (Evolution-Data Optimized) network.
Of particular significance was the dynamism of the BAM service -- wireless
mobile connectivity through Internet broadband, at the fastest speed available
inMexico -- which reached 71,000 users versus 26,000 a year earlier. The new
client growth rate is increasingly dynamic; 17,000 new users were added in
second quarter 2008, more than double the 8,000 new clients gained in the same
2007 period.
Subscriber Base
2Q 2007 2Q 2008 Change
%
Subscribers (thousands) 3,920 4,050 3%
Postpaid 908 1,076 19%
Prepaid 3,012 2,974 -1%
The number of postpaid subscribers increased 19% over the year ago period,
a significant figure given their high profitability and low churn rate.
Grupo Iusacell's subscriber base is 27% postpaid and 73% prepaid users.
The ratio of postpaid subscribers to total users during the period is four
percentage points higher than 23% during the second quarter of 2007, when
Grupo Iusacell and Unefon merged -- and the company is gearing its efforts
toward continued strong postpaid percentage growth in the future. Prior to the
Unefon merger, Grupo Iusacell's subscriber mix was 35% postpaid and 65%
prepaid.
Grupo Iusacell believes that number portability, recently implemented in
Mexico, offers a great opportunity for users of other companies to access
Iusacell's innovative services, which allow maximum speed in applications such
as wireless Internet connectivity and customized GPS products, as well as
access to real time television. These services also include access to
Comunidad Iusacell (the Iusacell Community), allowing users to communicate
with millions of Iusacell subscribers with the most competitive rates in the
market.
Costs and Expenses
Quarterly costs were Ps.1,532 million, versus Ps.1,511 million in the same
2007 period. The increase was a result of higher handset subsidies --
consistent with the increase in postpaid subscribers -- plus higher network
rents and interconnection outlays as a result of growth in voice traffic.
Operating expenses were Ps.670 million, versus Ps.584 million in the
second quarter a year earlier. The increase was a result of higher advertising
outlays -- related to extensive marketing campaigns for the launch of new
product and services -- as well as higher personnel expenses for a larger
number of promotion executives, more points of sale and increased customer
service, to bring the company even closer to its clients. This was partially
compensated by reductions in administrative expenses.
EBITDA and Net Income
EBITDA for the quarter was Ps.460 million, 9% higher than the Ps.420
million posted in the year ago period. EBITDA margin was 17%, unchanged from
the year ago quarter.
The company registered a net loss of Ps.228 million during the quarter,
versus net income of Ps.141 million a year earlier. The change is the result
of extraordinary fiscal gains of Ps.659 million in 2007, due to cancellation
of Unefon's deferred income tax liabilities, which Grupo Iusacell included in
its consolidated results a year ago.
Capex
Capital expenditures for the second quarter of 2008 were Ps.188 million,
mainly for system and equipment purchases for the purpose of extending
Iusacell's 3-G network coverage and capacity and its EVDO services.
Six Month Results
Income for the first six months was 5,420 million, up 17% from Ps.4,625
million during the year ago period. EBITDA was Ps.1,020 million, up 26% from
Ps.808 million a year ago. Net losses were Ps.508 million, versus Ps.1,131
million for the first six months a year ago. The greatest loss a year ago was
due to the 2007 cancellation of Ps.826 million in fixed assets, for the
substitution of transmission cells with the superior EVDO technology.
6M07 6M08 Change
Ps. % Nominal*
Net Revenue $4,625 $5,420 $795 17% 21%
EBITDA $808 $1,020 $212 26% 30%
Net Income $(1,131) $(508) $623 55% 54%
Earnings per Share $(9.05) $(4.06) $4.99 55% 54%
Million pesos in constant purchasing power as of December 31, 2007 for
6M07, and 6M08 in current pesos.
EBITDA: Revenue less cost and operating expenses.
* Change in nominal terms is included to help in the analysis of this
report. The nominal change is equivalent to adding the accumulated inflation
between June and December of 2007 to the new financial reporting rules.
About Iusacell
Grupo Iusacell, S.A.B. de C.V. (BMV: CEL; Latibex: XCEL) is a wireless
cellular and PCS service provider inMexico with a national footprint.
Iusacell offers more and better voice communication and data services through
state-of-the-art technology, such as its new 3G network, throughout all of the
regions in which it operates. In addition to its core mobile telephony
services, Iusacell also provides a wide range of other telecommunications
services, including long distance, wireless local telephony and data
transmission services.
Grupo Iusacell is a Grupo Salinas company (www.gruposalinas.com) a group
of dynamic, fast-growing, and technologically advanced companies focused on
creating shareholder value, contributing to build the middle class of the
countries in which they operate, and improving society through excellence.
Created by Mexican entrepreneur Ricardo B. Salinas (www.ricardosalinas.com),
Grupo Salinas operates as a management development and decision forum for the
top leaders of member companies. The companies include TV Azteca
(www.irtvazteca.com), Azteca America (www.aztecaamerica.com), Grupo Elektra
(www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Afore Azteca
(www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx) and Grupo
Iusacell (www.iusacell.com.mx). Each of the Grupo Salinas companies operates
independently, with its own management, board of directors and shareholders.
Grupo Salinas has no equity holdings. However, 6 member companies share a
common vision, values and strategies for achieving rapid growth, superior
results and world-class performance.
Grupo Iusacell, S.A.B. de C.V. quarterly reports and all other written
materials may from time to time contain statements about expected future
events and financial results that are forward-looking and subject to risks and
uncertainties. For those statements, the Company claims the protection of the
corresponding laws.
Attached is the Consolidated Income Statement of each of Grupo Iusacell,
S.A.B. de C.V. for the three-month and six-month period ended March 31, 2008,
and the Consolidated Balance Sheet of Grupo Iusacell, S.A.B. de C.V. at June
30, 2008.
GRUPO IUSACELL, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
FIGURES IN MILLIONS OF MEXICAN PESOS
2Q07 2Q08 Change
Gross Revenues 2,633 105% 2,772 104% 138 5%
Commissions (118) (5%) (110) (4%) 8 6%
Net Revenues 2,516 100% 2,661 100% 146 6%
Cost of services 991 39% 975 37% (16) (2%)
Handsets Subsidy 520 21% 556 21% 37 7%
Total Cost 1,511 60% 1,532 58% 21 1%
Gross Profit 1,005 40% 1,130 42% 125 12%
Selling, General &
Administrative
Expenses 584 23% 670 25% 85 15%
EBITDA 420 17% 460 17% 40 9%
Depreciation and
Amortization (547) (22%) (452) (17%) 95 17%
Fixed assets' write-off 0 0% - 0% 0 100%
Other income
(expenses) (2) (0%) 9 0% 11 n.m.
Comprehensive
Financing Cost
Interest Expense
- Net (315) (13%) (365) (14%) (51) (16%)
Foreign exchange
gain (loss) 195 8% 206 8% 11 6%
Gain from net
monetary
position (49) (2%) (0) (0%) 49 100%
Derivative
instruments
(loss) gain (1) (0%) 2 0% 3 n.m.
(170) (7%) (157) (6%) 12 7%
Income (Loss) Before
Taxes (298) (12%) (141) (5%) 157 53%
Tax Provisions:
Asset Tax (223) (9%) 2 0% 225 101%
Corporate Flat
Rate Tax - 0% (29) (1%) (29) n.a.
Deferred Income Tax 659 26% (88) (3%) (747) (113%)
436 17% (114) (4%) (550) (126%)
Minority Interest 3 0% 27 1% 24 n.m.
Net Income (Loss) 141 6% (228) (9%) (369) n.m.
PER SHARE INFORMATION
Outstanding Shares
(000) at the end of
the quarter 125,279 125,279 0.96 0%
Quarter Earnings
(Losses) per Share
(Pesos) 1.12 (1.82) (2.95) n.m.
GRUPO IUSACELL, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
FIGURES IN MILLIONS OF MEXICAN PESOS
6M07 6M08 Change
Gross Revenues 4,814 104% 5,655 104% 841 17%
Commissions (190) (4%) (235) (4%) (45) (24%)
Net Revenues 4,625 100% 5,420 100% 795 17%
Cost of services 1,909 41% 1,935 36% 26 1%
Handsets Subsidy 912 20% 1,068 20% 157 17%
Total Cost 2,821 61% 3,004 55% 183 6%
Gross Profit 1,804 39% 2,416 45% 613 34%
Selling, General &
Administrative
Expenses 996 22% 1,396 26% 400 40%
EBITDA 808 17% 1,020 19% 212 26%
Depreciation and
Amortization (956) (21%) (992) (18%) (36) (4%)
Fixed assets' write-
off (826) (17%) - 0% 826 100%
Other income
(expenses) 0 0% 19 0% 19 n.m
Comprehensive
Financing Cost
Interest
Expense - Net (566) (12%) (734) (14%) (168) (30%)
Foreign
exchange
(loss) 3 0% 362 7% 358 n.m
Gain from net
monetary
position 18 0% 0 0% (18) (100%)
Derivative
instruments
(loss) gain (19) (0%) 1 0% 20 106%
(564) (12%) (371) (7%) 193 34%
Income (Loss) Before
Taxes (1,538) (33%) (324) (6%) 1,214 79%
Tax Provisions:
Asset Tax (257) (6%) 0 0% 258 100%
Corporate Flat
Rate Tax - 0% (52) (1%) (52) n.a.
Deferred Income
Tax 659 14% (175) (3%) (834) (127%)
402 9% (227) (4%) (629) (156%)
Minority Interest 5 0% 43 1% 38 n.m
Net Income (Loss) (1,131) (24%) (508) (9%) 623 55%
Last Twelve Months
EBITDA 1,631 2,316 685 42%
Last Twelve Months
Net Income (Loss) 4,355 (662) (5,016) (115%)
PER SHARE
INFORMATION
Outstanding Shares
(000) at the end of
the quarter 125,279 125,279 1 0%
LTM Earnings
(Losses) per Share
(Pesos) 34.76 (5.28) (40.04) (115%)
GRUPO IUSACELL, S.A.B. DE C.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
FIGURES IN MILLIONS OF MEXICAN PESOS
As of June 30,
2007 2008 Change
Cash and cash
equivalents 967 5% 479 3% (488) (50%)
Customers 804 4% 928 5% 123 15%
Other accounts
receivable 226 1% 2 0% (224) (99%)
Advanced payments and
other receivables 371 2% 599 3% 228 61%
Unamortized handset
subsidy 592 3% 746 4% 154 26%
Inventories 269 1% 104 1% (166) (62%)
Current assets 3,230 17% 2,857 16% (373) (12%)
Fixed assets 7,477 40% 6,718 39% (759) (10%)
Goodwill 3,581 19% 3,774 22% 193 5%
Other assets 4,526 24% 4,012 23% (514) (11%)
TOTAL ASSETS 18,814 100% 17,361 100% (1,453) (8%)
Short-term debt 1,339 7% 1,931 11% 592 44%
Accrued interests 541 3% 110 1% (432) (80%)
Short-term liabilities
with financial cost 1,881 10% 2,041 12% 160 9%
Suppliers 1,239 7% 1,196 7% (43) (3%)
Unaccrued air time 147 1% 128 1% (19) (13%)
Accumulated expenses
and other payables 1,775 9% 1,430 8% (345) (19%)
Short-term liabilities
without financial
cost 3,161 17% 2,754 16% (407) (13%)
Short-term liabilities 5,042 27% 4,795 28% (247) (5%)
Long-term debt 8,944 48% 8,363 48% (581) (6%)
Other long-term
liabilities 23 0% 13 0% (11) (47%)
Long-term liabilities
with financial cost 8,968 48% 8,376 48% (592) (7%)
Deferred taxes - 0% 466 3% 466 n.a.
Labor obligations - 0% 25 0% 25 n.a.
Long-term liabilities
with financial cost - 0% 491 3% 491 n.a.
Advances from
customers 1,350 7% 1,013 6% (336) (25%)
Deferred credits 1,350 7% 1,013 6% (336) (25%)
TOTAL LIABILITIES 15,359 82% 14,675 85% (685) (4%)
STOCKHOLDERS' EQUITY 3,454 18% 2,686 15% (769) (22%)
LIABILITIES + EQUITY 18,814 100% 17,361 100% (1,453) (8%)
SOURCE Grupo Iusacell, S.A. de C.V.
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