Megacable Holdings (MEGACPO) Q2 2024 earnings summary

Executive summary

• Achieved 80% completion of network expansion, surpassing 16.5 million homes passed, with 23% year-over-year growth and 557,000 homes added this quarter.

• Achieved record total revenues of Ps. 8,136 million in 2Q24, up 10.3% year-over-year, with Mass Segment revenues rising 11.0% to Ps. 6,685 million.

• Consolidated EBITDA increased 9.7% year-over-year to Ps. 3,606 million, with a margin of 44.3%.

• Net income declined to Ps. 571 million, mainly due to higher depreciation, FX losses, and financial expenses.

• Dividend distribution totaled Ps. 2,651 million, maintaining a high market yield.

Financial highlights

• Consolidated revenues rose 10% year-over-year to MXN 8.1 billion, driven by mass segment growth.

• Mass segment revenues increased 11% to MXN 6.7 billion; internet up 18%, video 4%, fixed telephony 11%, MVNO 13%.

• Corporate segment grew 7% year-over-year, with ho1a up 27% and MetroCarrier up 10%.

• EBITDA reached MXN 3.6 billion, up 10% year-over-year; EBITDA margin slightly declined to 44.3%.

• Net debt rose to Ps. 22,012 million, with a net leverage ratio of 1.57x.

Outlook and guidance

• CapEx for 2024 expected at MXN 11 billion, targeting 32%-34% of revenues, with a gradual decline to below 20% over the next 4-5 years.

• EBITDA margin expected to reach around 45% by year-end and remain stable in coming years.

• Leverage ratio expected to decrease in coming periods due to lower investment levels.

• Sustained cash generation and improved profitability anticipated as expansion projects wind down.