May 7, 2020 / 5:51 PM / 17 days ago

Cellnex core earnings rise despite pandemic, net loss related to expansion

BARCELONA (Reuters) - Cellnex (CLNX.MC), Europe’s largest mobile phone towers operator, posted a 64% rise in first-quarter core earnings on Thursday, slightly beating forecasts, and kept its positive 2020 outlook despite the coronavirus pandemic.

FILE PHOTO: Telecom antennas of SpainÕs telecoms infrastructures firm Cellnex are seen under main telecom tower, known as "Piruli", in Madrid, Spain, March 10, 2016. REUTERS/Sergio Perez

Although it swung to a net loss of 30 million euros ($32.38 million) due to acquisitions, the Barcelona-based company said its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose to 260 million euros, while operating revenue grew 49% to 358 million euros.

Chief Financial Officer Jose Manuel Aisa told Reuters the coronavirus had impacted the way Cellnex operates but the company had adapted and maintained its 2020 outlook, which envisages EBITDA growth to more than 1 billion euros from 686 million euros last year.

He also said the pandemic had not affected the company’s investment capacity, but there were no specific investment goals this year.

A poll of analysts provided by Cellnex had put first-quarter EBITDA at 259 million euros and operating income at 360 million euros.

The company turned to a net loss due to higher amortizations and financial costs related to its expansion throughout Europe, Aisa said.

“It’s within what could be expected ... it shows that the company is investing and that it has a prudent accounting policy,” he added, expecting Cellnex to remain with a loss in the coming quarters and reverting the situation in the future.

Since the start of the virus crisis, Cellnex has deployed contingency plans in the eight countries in which it operates to guarantee its services, the company said in a statement.


Cellnex, which has snapped up tens of thousands of phone towers in Europe in the past few years and now controls more than 40,000 sites, is seen as a key player in a potential consolidation of the telecoms infrastructure market.

Aisa said the company has kept looking for potential new operations, saying it could still be interested in new deals in Ireland or with the CTIL masts company Spain’s Telefonica (TEF.MC) owns with Britain’s Vodafone (VOD.L), but he did not give further details.

Telefonica said on Thursday it could seek to monetize its stake in CTIL before or after closing a deal to merge its British unit O2 with Liberty Global’s Virgin Media.

Cellnex’s 2020 or 2021 EBITDA could be further boosted once its purchase of the telecoms division of Britain’s Arqiva is fully approved and other potential operations are taken into account, Aisa said, adding he hoped the final approval for Arqiva would be between June and September.

Cellnex’s net debt rose to 4.5 billion euros ($4.85 billion) in the first quarter from 3.9 billion a year ago. The company does not it consider the amount troublesome since it is expanding and generating cash flow, he added.

In 2019 Cellnex invested almost 4 billion euros out of the 7.7 billion euros it had said it planned to invest over an unspecified period.

Its latest operation was announced on April 14 when it agreed to acquire Portuguese mobile operator NOS’s telecom-tower business for an initial sum of 375 million euros.

($1 = 0.9264 euros)

Reporting by Joan Faus, editing by Andrei Khalip and David Evans

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