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Cablemas 2Q08 Net Revenue and Adjusted EBITDA Up 14.1% and 6.1% YoYMEXICO CITY, Aug. 28 /PRNewswire/ -- Cablemas, S.A. de C.V., (Cablemas), the second-largest cable television operator inMexico based on number of subscribers and homes passed, today announced results for the three-month period ending June 30, 2008. Cablemas CEO "We continue to grow our customer base. Cable television subscribers rose 6.9%, high speed internet 10.3% and IP telephony 121.9% year-on-year." "To continue making the most of the opportunities present in our markets, we have decided to step up the roll out of our IP telephony services, and we will be adding new cities in the second half of the year."
Financial and Operational Highlights(1)
(in million Mexican Pesos)
2Q07 2Q08 % Chg.
Financial Highlights
Net revenue 674.6 769.6 14.1%
Operating profit 158.1 122.8 -22.3%
Adjusted EBITDA(2) 270.2 286.6 6.1%
Net income 48.6 41.5 -14.5%
Operating margin 23.4% 16.0% -749 bps
Adjusted EBITDA margin(2) 40.1% 37.2% -282 bps
Net income margin 7.2% 5.4% -180 bps
Total Debt 2,201.7 2,329.3 5.8%
Net Debt 2,149.0 1,875.7 -12.7%
Total Debt/ LTM Adj. EBITDA(2) 2.3x 2.2x
Net Debt/ LTM Adj. EBITDA(2) 2.2x 1.7x
EBITDA/ Net interest expense 4.1x 3.7x
Operational Highlights
Homes passed 2,160,634 2,322,186 7.5%
Cable Television subscribers 753,161 805,390 6.9%
High-speed internet subscribers 203,890 224,799 10.3%
IP Telephony lines 30,202 67,012 121.9%
1H07 1H08 % Chg.
Financial Highlights
Net revenue 1,325.9 1,540.5 16.2%
Operating profit 292.4 270.6 -7.4%
Adjusted EBITDA(2) 520.7 586.9 12.7%
Net income 164.1 74.7 -54.5%
Operating margin 22.1% 17.6% -448 bps
Adjusted EBITDA margin(2) 39.3% 38.1% -117 bps
Net income margin 12.4% 4.8% -753 bps
Total Debt 2,201.7 2,329.3 5.8%
Net Debt 2,149.0 1,875.7 -12.7%
Total Debt/ LTM Adj. EBITDA(2) 2.3 2.2
Net Debt/ LTM Adj. EBITDA(2) 2.2 1.7
EBITDA/ Net interest expense 4.0x 3.8x
Operational Highlights
Homes passed 2,160,634 2,322,186 7.5%
Cable Television subscribers 753,161 805,390 6.9%
High-speed internet subscribers 203,890 224,799 10.3%
IP Telephony lines 30,202 67,012 121.9%
(1) Unless otherwise stated, all financial figures discussed in this announcement are unaudited, prepared in accordance with Mexican Financial Reporting Standards and represent comparisons between the three-month periods ended June 30, 2008, and the equivalent three-month period ended June 30, 2007. Results for 2Q07 are expressed in constant Mexican pesos as of December 31, 2007, while 2Q08 results are in nominal pesos. Tables state figures in millions of pesos, unless otherwise noted. (2) Adjusted EBITDA is calculated by adding amortization and depreciation, net comprehensive financial results, net other income, special items, total income tax and asset tax, total employee statutory profit sharing, effects from associated companies and minority interest to net income/loss.
SECOND QUARTER 2008 CONSOLIDATED RESULTS
Net Revenues Net revenues increased 14.1%, or Ps.95.0 million, during 2Q08 to Ps.769.6 million, as described below: -- Cable Television: The 9.1% growth in cable television revenues, from Ps.511.2 million to Ps.557.8 million was principally due to a 6.9% YoY increase in the number of subscribers to 805,390 with a penetration rate of 33.9%. Average monthly cable television revenues per subscriber (ARPU) increased year over year to Ps.232.6 from Ps.228.8, principally reflecting the increase in rates at the Minibasic service implemented earlier in the year. Average monthly net churn rates for cable television increased year-on-year by 29 bps to 2.6%, reflecting the initial reaction to the above mentioned rate increase. On a sequential basis, however, churn declined compared from the 3.0% posted in 1Q08. -- High Speed Internet: The 17.3%, or Ps.20.6 million, rise in high-speed Internet revenues to Ps.139.4 million resulted mainly from a 10.3% increase in the number of subscribers to 224,799, with a penetration rate of 11.4%. High-speed Internet ARPU increased to Ps.205.7 from Ps.196.8 in 2Q07, reflecting an increase in demand for higher speed service. Average monthly net churn rates for high-speed Internet rose 4 bps to 4.55% in 2Q08 due to high competition. -- IP Telephony: IP telephony revenues for the quarter rose by Ps.23.4 million, to Ps.53.0 million. The number of IP telephony lines in service rose 121.9% to 67,012 from 30,202 at the end of 2Q07. IP telephony ARPU for 2Q08 declined to Ps.288.9 from Ps.315.5 in the year-ago quarter reflecting the ramping up of this service in new cities. This does not include migration fees paid to Cablemas by Axtel for new subscribers which, if included, would increase IP telephony ARPU to Ps.292.7 for 2Q08.
Table 1. Revenues by Service Offering
2Q07 2Q08
% of % of
Total Total
Revenue Revenue Revenue Revenue % Chg.
Cable Television 511.2 75.8% 557.8 72.5% 9.1%
High-Speed Internet 118.8 17.6% 139.4 18.1% 17.3%
IP telephony 29.7 4.4% 53.0 6.9% 78.8%
Advertising 13.4 2.0% 18.1 2.4% 35.5%
Other(1) 1.6 0.2% 1.3 0.2% -20.2%
Total Net Revenue(2) 674.6 100.0% 769.6 100.0% 14.1%
(1) Includes revenue relating to rental and sale of cable decoders and charges relating to customer's change of residence. (2) All net revenue figures are net of value-added taxes and other taxes on sales.
Table 2. Number of Subscribers and Revenue per Service Offering
% Chg. in
2Q07 2Q08 Subscribers
Minibasic 214,766 238,031 10.8%
Basic(1) 521,271 549,133 5.3%
Superbasic(1) 44,049 42,683 -3.1%
Premium (1) 29,194 34,039 16.6%
Hotel 17,124 18,226 6.4%
Total Cable Television 753,161 805,390 6.9%
High-Speed Internet 203,890 224,799 10.3%
IP Telephony lines 30,202 67,012 121.9%
(1) The number and percentage of Basic subscribers includes Basic, Superbasic and Premium subscribers due to the fact that all Superbasic and Premium subscribers must also be Basic subscribers.
Table 3. ARPUs and Churn Per Service Offering
2Q07 2Q08 % Chg.
Homes passed 2,160,634 2,322,186 7.5%
Cable Television
- Revenue 511.2 557.8 9.1%
- Subscribers 753,161 805,390 6.9%
- ARPU 228.8 232.6 1.7%
- Avg. Monthly Churn 2.3% 2.6% +29 bps
High-Speed Internet
- Revenue 118.8 139.4 17.3%
- Subscribers 203,890 224,799 10.3%
- ARPU 196.8 205.7 4.5%
- Avg. Monthly Churn 4.51% 4.55% +4 bps
IP Telephony
- Revenue 29.7 53.0 78.8%
- Lines 30,202 67,012 121.9%
- ARPU (without migration fee) 315.5 288.9 -8.4%
Operating Profit Operating profit for 2Q08 decreased by 22.3%, or Ps.35.4 million, to Ps.122.8 million, driven mainly by a Ps.3.7 million decrease in gross profit and a Ps.31.65 million rise in SG&A. Operating margin fell 748 bps to 16.0% from 23.4% in 2Q07.
Table 4. Operating Profit
2Q07 2Q08
Million % of Million % of
Ps. Revenues Ps. Revenues % Chg.
Service revenues 674.6 100.0% 769.6 100.0% 14.1%
Cost of services 317.1 47.0% 415.7 54.0% 31.1%
Gross Profit 357.5 53.0% 353.9 46.0% -1.0%
SG&A 199.4 29.6% 231.1 30.0% 15.9%
- Selling 60.9 9.0% 67.7 8.8% 11.2%
- Administrative 122.6 18.2% 135.8 17.6% 10.8%
- Amortization and
depreciation 15.9 2.4% 27.5 3.6% 72.8%
Total operating profit 158.1 23.4% 122.8 16.0% -22.3%
Cost of Services Cost of Services for 2Q08 rose 31.1%, or Ps.98.66 million. The increase in cost of services was primarily due to: -- A Ps. 7.9 million increase in cable TV programming costs, reflecting higher costs and the increase in the number of cable subscribers; -- A Ps. 21.9 million increase in Internet costs related to the incremental cost for bandwidth as the company is offering higher Internet speeds at the same price to make its service more attractive. The increase also reflected the 10.3% growth in the number of Internet subscribers; -- A Ps. 40.1 million increase in depreciation & amortization resulting from an increase in fixed assets investments. -- A Ps. 17.2 million increase in telephony costs resulting from the roll out of IP telephony in new cities; and -- A Ps. 5.2 million increase in payroll due to a rise in the number of technical employees from 1,108 people in June 30, 2007 to 1,269 in June 30, 2008. Selling, General and Administrative Expenses Selling, General and Administrative Expenses (including depreciation and amortization) or SG&A, increased Ps.31.65 million, or 15.9% YoY to Ps.231.1 million. As a percentage of sales SG&A increased to 30.0%, from 29.6% in 2Q07. The absolute increase in SG&A principally reflected the following changes: -- Selling expenses rose 11.2% to Ps.67.7 million. As a percentage of revenues, selling expenses decreased to 8.8% from 9.0% in 2Q07 reflecting the success of the advertising campaign launched earlier in the year to promote the launch of IP telephony and triple play. The Company employed 1,245 salespersons as of June 30, 2008 compared to 1,108 as of June 30, 2007. -- Administrative expenses increased 10.8% to Ps.135.8 million. As a percentage of revenues, administrative expenses fell to 17.6% from 18.2% in the year-ago quarter. The absolute rise in administrative expenses was principally due to: -- A Ps. 10 million increase in salaries and fees principally due to the increase in the number of employees resulting from the Company's growth; -- A Ps. 1.1 million increase in leases of additional warehouses and telephony facilities; -- Amortization and depreciation rose 72.8%, or Ps.11.6 million, to Ps.27.5 million in 2Q08, principally due to the increase in office equipment and the amortization of intangibles resulting from recent acquisitions. Adjusted EBITDA Adjusted EBITDA for 2Q08 increased 6.1%, or Ps.16.4 million, to Ps.286.6 million. The adjusted EBITDA margin decreased 282 bps to 37.2%. The following table sets forth the reconciliation between net income and adjusted EBITDA:
Table 5. Adjusted EBITDA
2Q07 2Q08 % Chg.
Net income (loss) 48.6 41.5 -14.5%
Add (subtract):
Amortization and depreciation 112.1 163.8 46.1%
Comprehensive financial results, net 74.0 27.8 -62.4%
Other (income) expense, net (4.7) 1.6 n/a
Total income tax and asset tax 38.7 45.4 17.2%
Employee profit sharing 2.6 (0.6) n/a
Effects from associated companies (1.0) 7.0 n/a
Minority interest (0.01) 0.1 n/a
Adjusted EBITDA 270.2 286.6 6.1%
-- Depreciation and amortization increased 46.1%, or Ps.51.7 million, to Ps.163.8 million, principally due to an increase in fixed asset investments. -- Net comprehensive financial results were an expense of Ps.27.8 million compared with an expense of Ps.74.0 million in 2Q07, principally reflecting higher gains from financial instruments and monetary position. -- During the quarter, the Company recorded a Ps.45.4 million provision for income taxes and asset taxes, compared to Ps.38.7 million in 2Q07. Comprehensive Financial Results, Net Net comprehensive financial results were an expense of Ps. 27.8 million for the three-months ended June 30, 2008, a decrease of Ps.46.17 million over an expense of Ps. 74.0 million for 2Q07. The decrease primarily reflected a Ps.72.2 million financial instrument loss in 2Q08 compared with a Ps.0.6 million loss in 2Q07. In addition, pursuant to NIF B-10, inflation accounting is not applicable for 2008 and thus the result from monetary position is not determined for 2008. The non-monetary financial instruments loss was the result of the Company's hedging strategy. The Ps.23.3 million non-monetary foreign exchange gain reflects the appreciation of the Mexican peso against the US dollar.
Table 6. Comprehensive Financial Results, Net
2Q07 2Q08 % Chg.
Interest income 0.7 3.4 401.0%
Interest expense -66.9 -80.0 19.7%
Financial instruments (gain) 0.6 72.2 12652%
Foreign-exchange (gain) loss, net -1.5 -23.3 1433%
Monetary position loss (gain) -6.8 0.0 n/a
Comprehensive financial results, net (74.0) (27.8) -62.4%
Net Income For 2Q08, Cablemas posted a net gain of Ps.41.5 million, compared with a net gain of Ps.48.6 million 2Q07. Net income margin fell to 5.4% from 7.2% for 2Q07. FIRST HALF 2008 CONSOLIDATED RESULTS Net Revenues Net revenues increased 16.2%, or Ps. 214.6 million, during 1H08 to Ps. 1,540.5 million. -- Cable Television: The 10.7%, or Ps.108.07 million, growth in cable television revenues was principally due to a 6.9% YoY increase in the number of subscribers to 805,390, with a penetration rate of 33.9%. Average monthly cable television revenues per subscriber (ARPU) rose 1.0% to Ps.233.6. This raise in ARPU was primarily the result of the increase in rates at the Minibasic service implemented earlier in the year. The average monthly net churn rates for cable television rose 29 bps to 2.6% for 1H08 from 2.3% in 1H07. -- High Speed Internet: Revenues rose 21.8%, or Ps.50.2 million, to Ps.280.3 million. The rise in high-speed Internet revenues resulted mainly from a 10.3% increase in the number of subscribers to 224,799, with a penetration rate of 11.4%. A 4.0% increase in high-speed Internet ARPU to Ps.209.8 reflecting the increase in bandwidth offered also contributed to the increase in revenue. Average monthly net churn rates for high-speed Internet rose to 4.55% for 1H08 from 4.51% in 1H07 due to high competition. -- IP Telephony: IP telephony revenues for the period rose 76.6%, or Ps.41.76 million, to Ps.96.3 million. As of June 30, 2008, there were 67,012 IP telephony lines in service, up from 30,202 as of June 30, 2007. IP telephony ARPU for 1H08 rose 0.1% to Ps.291.4. This does not include migration fees paid to Cablemas by Axtel for new subscribers which, if included, would increase IP telephony ARPU to Ps. 296.9 for 1H08.
Table 7. Revenues by Service Offering
1H07 1H08
% of % of
Total Total
Revenue Revenue Revenue Revenue % Chg.
Cable Television 1,014.7 76.5% 1,122.7 72.9% 10.7%
High-Speed Internet 230.0 17.3% 280.3 18.2% 21.8%
IP telephony 54.5 4.1% 96.3 6.2% 76.6%
Advertising 24.4 1.8% 36.5 2.4% 50.0%
Other(1) 2.4 0.2% 4.7 0.3% 98.5%
Total Net Revenue(2) 1,325.9 100.0% 1,540.5 100.0% 16.2%
(1) Includes revenue relating to rental and sale of cable decoders and charges relating to customer's change of residence. (2) All net revenue figures are net of value-added taxes and other taxes on sales.
Table 8. Number of Subscribers and Revenue per Service Offering
% Chg. in
1H07 1H08 Subscribers
Minibasic 214,766 238,031 10.8%
Basic(1) 521,271 549,133 5.3%
Superbasic(1) 44,049 42,683 -3.1%
Premium (1) 29,194 34,039 16.6%
Hotel 17,124 18,226 6.4%
Total Cable Television 753,161 805,390 6.9%
High-Speed Internet 203,890 224,799 10.3%
IP Telephony lines 30,202 67,012 121.9%
(1) The number and percentage of Basic subscribers includes Basic, Superbasic and Premium subscribers due to the fact that all Superbasic and Premium subscribers must also be Basic subscribers.
Table 9. ARPUs and Churn Per Service Offering
1H07 1H08 % Chg.
Homes passed 2,160,634 2,322,186 7.5%
Cable Television
- Revenue 1,014.7 1,122.7 10.7%
- Subscribers 753,161 805,390 6.9%
- ARPU 231.3 233.6 1.0%
- Avg. Monthly Churn 2.3% 2.6% +29 bps
High-Speed Internet
- Revenue 230.0 280.3 21.8%
- Subscribers 203,890 224,799 10.3%
- ARPU 201.7 209.8 4.0%
- Avg. Monthly Churn 4.51% 4.55% +4 bps
IP Telephony
- Revenue 54.5 96.3 76.6%
- Lines 30,202 67,012 121.9%
- ARPU (without migration fee) 291.2 291.4 0.1%
Operating Profit Operating profit for 1H08 declined by 7.4%, or Ps.21.7 million, to Ps.270.6 million, driven mainly by a increases of 16.4% in SG&A and 6.3% in gross profit. Operating margin declined to 17.6% from 22.1% in 1H07, principally due to higher cost of services as a percentage of sales.
Table 10. Operating Profit
1H07 1H08
Million % of Million % of
Ps. Revenues Ps. Revenues % Chg.
Service revenues 1,325.9 100.0% 1,540.5 100.0% 16.2%
Cost of services 638.4 48.1% 810.0 52.6% 26.9%
Gross Profit 687.5 51.9% 730.5 47.4% 6.3%
SG&A 395.2 29.8% 459.9 29.9% 16.4%
- Selling 126.6 9.6% 146.2 9.5% 15.4%
- Administrative 240.8 18.2% 260.6 16.9% 8.2%
- Amortization and
depreciation 27.7 2.1% 53.1 3.4% 91.7%
Total operating profit 292.4 22.1% 270.6 17.6% -7.4%
Cost of Services Cost of Services for 1H08 increased by 26.9%, or Ps.171.6 million. The increase in cost of services was primarily due to: -- A 5.9% increase in cable TV programming costs, reflecting higher costs and the increase in the number of cable subscribers; -- A 17.3% increase in wages and salaries reflecting an increase in the number of technical employees as a result of the growth in video and telephony subscribers; -- A Ps.41.8 million increase in Internet costs, which are related to the incremental cost for bandwidth. Higher internet costs also reflect the 10.3% increase in the number of internet subscribers during the period; and -- A Ps.26.6 million increase in telephony costs resulting from the roll out of IP telephony in new cities. Selling, General and Administrative Expenses Selling, General and Administrative Expenses (including depreciation and amortization) or SG&A, increased Ps.64.7 million, or 16.4% YoY to Ps.459.9 million. As a percentage of sales, SG&A rose to 29.9% from 29.8%. The absolute increase in SG&A principally reflected the following factors: -- A 15.4%, or Ps.19.5 million, increase in selling expenses to Ps.146.2 million principally related to the expansion of the Company's sales force (1,245 salespersons as of June 30, 2008 as compared to 1,146 as of June 30, 2007), an increase in commissions paid. -- An 8.2%, or Ps.19.8 million, increase in administrative expenses, including Ps.12.5 in wages and salaries, and Ps.3.7 million from the increase in leases of additional warehouses and telephony facilities; and -- A 91.7%, or Ps.25.4 million, increase in amortization and depreciation, to Ps.53.1 million for 1H08, principally due to an increase in office equipment and the amortization of intangibles resulting from recent acquisitions. Adjusted EBITDA Adjusted EBITDA for 1H08 increased 12.7%, or Ps.66.3 million, to Ps. 586.9 million. The adjusted EBITDA margin declined 117 bps to 38.1% from 39.3%. The following table sets forth the reconciliation between net income and adjusted EBITDA:
Table 11. Adjusted EBITDA
1H07 1H08 % Chg.
Net income (loss) 164.1 74.7 -54.5%
Add (subtract):
Amortization and depreciation 228.3 316.3 38.5%
Comprehensive financial results, net 84.2 118.3 40.5%
Other (income) expense, net (24.5) 0.1 n/a
Total income tax and asset tax 71.3 67.0 -6.0%
Employee profit sharing 4.61 0.001 -100.0%
Effects from associated companies (7.6) 10.4 n/a
Minority interest 0.21 0.24 17.0%
Adjusted EBITDA 520.7 586.9 12.7%
-- Depreciation and amortization rose 38.5%, or Ps.88.0 million, to Ps.316.3 million, principally due to an increase in fixed asset investments; -- Net comprehensive financial results were an expense of Ps.118.3 million compared with an expense of Ps.84.2 million in 1H07 as explained below; -- As a result of applying NIF B3, the account "Special Items" was eliminated with charges now accounted for in "Other (Expense) Income, net". -- During the period the Company recorded a Ps.67.0 million provision for income and asset taxes, compared to Ps.71.3 million in 1H07. Comprehensive Financial Results, Net Net comprehensive financial results was an expense of Ps.118.3 million for 1H08, an increase of Ps.34.1 million from an expense of Ps.84.2 million for 1H07. This mainly reflected an increase in interest income, higher interest expenses as a result of the Ps.127.6 million increase in gross debt. In addition, pursuant to NIF B-10, inflation accounting is not applicable for 2008 and thus the result from monetary position is not determined for 2008. The non-monetary financial instruments loss was the result of the Company's hedging strategy. The Ps.6.3 million non-monetary foreign exchange loss in 1H08 reflects the appreciation of the Mexican peso against the US dollar.
Table 12. Comprehensive Financial Results, Net
1H07 1H08 % Chg.
Interest income 2.4 7.0 193.1%
Interest expense -132.6 -161.5 21.8%
Financial instruments (gain) 28.7 29.9 4.2%
Foreign-exchange (gain) loss, net -1.4 6.3 n/a
Monetary position loss (gain) 18.7 0.0 -100.0%
Comprehensive financial results, net (84.2) (118.3) 40.5%
Net Income For 1H08, Cablemas posted a net gain Ps.74.7 million, a 54.5%, or Ps.89.5 million, reduction compared to a Ps.164.1 million gain in 1H07. Net income margin lowered to 4.8% from 12.4% for 1H07. CAPEX Capital expenditures for 1H08 increased 1.8%, or Ps.10.6 million, to Ps.591.9 million from Ps.581.3 million in 1H07. Capital expenditures principally related to investments incurred in connection with the roll out of IP telephony and to expand and upgrade Cablemas' network. As of June 30, 2008, Cablemas had a network of 14,166 km, of which 85% was bidirectional, 89% was operating at or greater than 550 MHz and 77% was operating at or greater than 750 MHz. DEBT STRUCTURE AND CASH FLOW Consolidated gross debt as of June 30, 2008, totaled Ps. 2,329.3 million,
of which Ps. 2,323.2 million was long-term and Ps. 6.1 million was short term.
Consolidated gross debt rose YoY by 5.8%, from Ps.2,201.7 million as of June
30, 2007. This was mainly the result of the 5-year term syndicated loan
facility for Net debt, which is calculated as total debt minus cash and cash equivalents, decreased YoY by 12.7% to Ps.1,875.7 million, from 2,149.0 million as of June 30, 2007. As of June 30, 2008, Cablemas had a cash balance of Ps.453.6 million.
Table 13. Debt Indicators
1H07 1H08 % Chg.
Total Debt 2,201.7 2,329.3 5.8%
Short-Term Debt 232.9 6.1 -97.4%
Long-Term Debt 1,968.7 2,323.2 18.0%
Cash and Cash Equivalents 52.7 453.6 761.2%
Total Net Debt 2,149.0 1,875.7 -12.7%
Leverage
Total Debt/ LTM Adjusted EBITDA 2.3x 2.2x
Total Net Debt/ LTM Adjusted EBITDA 2.2x 1.7x
Interest Coverage
Adjusted EBITDA / Net Interest Expense 4.0x 3.8x
Cash flow from operations during 1H08 increased 40.6%, or Ps.175.7 million, to Ps.608.3 million. Net borrowings increased by Ps.313.3 million. CAPEX for 1H08 increased Ps.10.6 million to Ps.591.9 million. Investments were principally related to the upgrade and expansion of Cablemas' network, customers' premises equipment investments and the roll out of IP telephony.
Table 14. Cash Flow
1H07 1H08 Change
Cash at the beginning of the year 56.0 54.5 (1.5)
Net Income 164.1 74.7 (89.5)
+ Depreciation and amortization 231.5 319.6 88.1
+ Change in Working Capital 93.9 109.0 15.1
+ Other (56.9) 105.0 161.9
Cash Flow from Operations 432.6 608.3 175.7
- Capex (581.3) (591.9) (10.6)
- Other 44.3 (31.6) (75.9)
Net Investing Activities (536.9) (623.5) (86.6)
+ Debt 139.3 (569.6) (708.9)
+ Other (38.3) 983.9 1,022.2
Net Financing Activities 101.0 414.3 313.3
Cash at the end of the year 52.7 453.6 400.9
KEY EVENTS Offer to Purchase Cablemas' 9.375% Senior Guaranteed Notes due November 15, 2015 On June 2, 2008, a Change in Control may have occurred with respect to the Company, as a result of certain amendments to the Irrevocable Trust Agreement Number 15377-8 dated November 22, 2006 between the Company's shareholders and Banco Nacional deMexico, S.A., Institucion de Banca Multiple, Grupo Financiero Banamex, Division Fiduciaria, as trustee. Accordingly, on July 2, 2008 the Company offered to purchase any and all of the Notes at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest up to, but not including, the Payment Date. The Offer to Purchase expired on July 30, 2008, with holders of
approximately
SECOND HALF 2008 EARNINGS CONFERENCE CALL
Date: Friday, August 29, 2008
Time: 11:30 AM US ET-10:30 AM Mexico City Time
Dial Information: 888.680.0879 (U.S.) or 617.213.4856 (international)
Passcode: 66419487
Pre-registration: If you would like to pre-register for the conference call use the following link: https://www.theconferencingservice.com/prereg/key.process?key=PKEKXG4N4 Pre-registering is not mandatory but is recommended as it will provide you immediate entry into the call and will facilitate the timely start of the conference. You will receive a code that allows you to enter the call directly. Pre-registration only takes a few moments, and you may do so at any time, including up to and after call start time. To pre-register, please click the link above. Alternatively, if you would rather be placed into the call by an operator, please call at least 15 minutes prior to call start time.
Replay: A replay of the call will be available between 1:30 pm
ET on August 29 and 11:59 pm ET on September 5. The replay is accessible by dialing 888-286-8010 (U.S.) or 617-801-6888 (international) and entering passcode 17366726. About Cablemas Cablemas is the second-largest cable television operator inMexico based on number of subscribers and homes passed. As of June 30, 2008, Cablemas' cable network served over 805,390 cable television subscribers, 224,799 high-speed internet subscribers, and 67,012 IP telephony lines, with 2,322,186 homes passed. Cablemas is the concessionaire with the broadest coverage inMexico, operating in 46 cities throughout the country's oil, maquiladora and tourist regions as of June 30, 2008. Cablemas has consistently introduced innovative products inMexico and is the first cable operator in the country to provide a "Triple Play" bundled service package of cable television, high speed internet and IP telephony. More information about Cablemas can be found at www.cablemas.com. This document may contain certain forward-looking statements concerning Cablemas' operations, performance, business, financial condition and growth prospects. These statements are based upon beliefs of management as well as a number of assumptions and estimates, which are inherently subject to significant uncertainties, many of which are beyond Cablemas' control. Actual results may differ materially from those expressed or implied by such forward- looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in the Mexican economy, including changes in inflation rates or exchange rates, changes in political conditions and government policies inMexico, increased competition, regulatory developments and customer demand. These statements are made as of the date of this press release and Cablemas undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise in light of these risks and uncertainties, there can be no assurances that the events described or implied in the forward-looking statements contained in this document will in fact transpire.
- UNAUDITED FINANCIAL TABLES TO FOLLOW -
CABLEMAS, S. A. DE C. V. AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 2008 and 2007
(2Q07 figures are in thousands of constant Mexican pesos as of December
31, 2007 while 2Q08 figures are in thousands of nominal Mexican pesos)
(Unaudited)
ASSETS 2008 2007
Current assets:
Cash and cash equivalents $453,611 $52,672
Trade accounts receivable, less
allowance for doubtful accounts
of Ps 11,155 in 2008, Ps 10,995
in 2007 40,600 51,713
Other accounts receivable, net 111,249 178,389
Associated companies 355 3,359
Prepaid expenses 48,315 41,749
Total current assets 654,130 327,882
Financial Instruments 438,964 348,043
Inventory of components of signal
distribution systems, net 413,600 407,617
Investment in associated companies 646,085 99,175
Property, signal distribution
systems and equipment, net 4,039,333 3,484,212
Deferred employee statutory profit
sharing 13,400 5,687
Goodwill, net 1,076,294 1,025,654
Intangible asset from pension and
seniority premium plans and
severance compensation for
reasons other than restructuring 11,698 19,680
Other non-current assets, net 198,056 176,276
$7,491,560 $5,894,226
LIABILITIES 2008 2007
Current liabilities:
Current installments of:
Bank loans $333 $226,684
Obligations under capital leases 5,777 6,255
Senior notes 21,364 22,713
Accounts payable 315,557 281,764
Accruals 92,064 109,976
Accrued liabilities 29,520 19,649
Taxes payable 34,988 6,072
Employee statutory profit sharing 3,539 3,432
Productora y Comercializadora de
Television, S. A. de C. V.
(related company) 39,826 39,642
Subscriber deposits and advances 47,087 38,880
Total current liabilities 590,055 755,067
Financial instruments 404,244 339,685
Senior notes 1,802,990 1,956,520
Bank loans, excluding current installments 515,140 -
Obligations under capital leases,
excluding current installments 5,079 12,211
Pension and seniority premiums
plans and severance compensation for
reasons other than restructuring 55,607 50,113
Income tax long-term 3,358 8,894
Deferred income tax 477,469 392,959
Total liabilities 3,853,942 3,515,449
STOCKHOLDERS' EQUITY
Majority stockholders' equity:
Capital stock 760,924 751,417
Additional paid-in capital 2,278,642 1,200,309
Retained earnings 543,919 505,738
Valuation effects of financial
instruments 58,255 (72,540)
Effect from labor obligations - (1,564)
Cumulative deffered Income Tax effect 3,448 3,448
Equity adjustment of non-monetary
assets (10,298) (10,298)
Total majority stockholders' equity 3,634,890 2,376,510
Minority interest 2,728 2,267
Total stockholders' equity 3,637,618 2,378,777
Commitments and contingent liabilities
$7,491,560 $5,894,226
CABLEMAS, S. A. DE C. V. AND SUBSIDIARIES
Consolidated Statements of Income
Six months period ending June 30, 2008 and 2007
(2Q07 figures are in thousands of constant Mexican pesos as of December
31, 2007 while 2Q08 figures are in thousands of nominal Mexican pesos)
(Unaudited)
2008 2007
Service revenues Ps 1,540,473 Ps 1,325,904
Cost of services 809,951 638,380
Gross profit 730,522 687,524
Operating expenses:
Selling 146,162 126,649
Administrative 260,606 240,807
Amortization and depreciation 53,109 27,704
Total operating expenses 459,877 395,160
Operating profit 270,645 292,364
Other income (expenses),
Employee statutory profit sharing:
Current (3,774) (3,436)
Deferred 3,773 (1,174)
Total employee statutory
profit sharing (1) (4,610)
Other income (expenses) (93) 24,464
Other income (expenses), net (94) 19,854
Comprehensive financial results:
Interest income 7,013 2,393
Interest expense (161,502) (132,568)
Foreign exchange (loss) gain, net 6,331 (1,414)
Valuation effects of financial
instruments 29,893 28,701
Monetary position gain - 18,696
Comprehensive financial
results, net (118,265) (84,192)
Effects from associated companies:
Equity in the results of operations (10,367) 7,593
Total effects from associated
companies (10,367) 7,593
Income before income taxes
and minority interest 141,919 235,619
Income taxes:
Current 41,833 50,006
Deferred 25,173 21,281
Total income taxes 67,006 71,287
Income before minority interest 74,913 164,332
Minority interest (241) (206)
Majority interest net income Ps 74,672 Ps 164,126
Basic earnings per share Ps 0.25 Ps 0.60
CABLEMAS, S. A. DE C. V. AND SUBSIDIARIES
Consolidated Statements of Changes in Financial Position
Six months period ending June 30, 2008 and 2007
(2Q07 figures are in thousands of constant Mexican pesos as of December
31, 2007 while 2Q08 figures are in thousands of nominal Mexican pesos)
(Unaudited)
2008 2007
Operating activities:
Majority interest net income $74,672 $164,126
Add charges (deduct credit) to
operations not requiring
(providing) funds:
Depreciation and amortization 319,579 231,489
Net gain on insurance recovery - (45,716)
Increase in allowance for inventory
of components
of signal distribution systems - 410
Effects from associated companies 10,367 (7,593)
Accrual for pension, seniority
premiums and severance 5,109 1,948
Deferred income taxes 25,173 21,281
Deferred employee statutory profit
sharing (3,773) 1,174
Minority interest 241 206
Financial instruments 67,903 (28,623)
Funds provided by operations 499,271 338,702
Net financing from (investing in)
operating accounts:
Trade and other accounts receivable, net 50,982 59,958
Prepaid expenses (26,551) (21,913)
Accounts payable 39,549 27,089
Accruals and accrued liabilities 12,551 19,449
Taxes payable 26,872 (18,516)
Subscriber deposits and advances 6,230 (6,638)
Employee statutory profit sharing (650) (3,636)
Related parties 39 38,085
Funds provided by operating activities 608,293 432,580
Financing activities:
Proceeds from (payments of) bank loans, net (458,708) 137,533
Proceeds from notes and payments of
commercial paper obligations, net (107,120) (15,775)
Proceeds from (payments of) capital
lease obligations (3,804) 17,545
Capital stock increases 9,507 -
Additional paid-in capital 1,078,333 -
Dividends paid (98,615) (38,212)
Income tax long-term (5,289) (51)
Funds provided by financing
activities 414,304 101,040
Investing activities:
Inventory of components of signal
distribution systems (76,185) (129,376)
Capital expenditures (500,585) (446,730)
Other assets, net (15,121) (5,149)
Investment in associated companies (31,613) (1,402)
Insurance recovery - 45,716
Funds used in investing activities (623,504) (536,941)
(Decrease) increase in cash and
cash equivalents 399,093 (3,321)
Cash and cash equivalents:
At beginning of year 54,518 55,993
At end of year $453,611 $52,672
SOURCE Cablemas, S.A. de C.V. Tags: ,TLS,CPR,ERN,CCA,OFR,Cablemas-2Q08-ernings _ _     Is your favorite bookmark site missing? Ask for it. |
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