Megacable Holdings (MEGACPO) Q3 2024 earnings summary

Executive summary

• Achieved 100,000 km of distribution network, 17 million homes passed, and 5 million broadband subscribers, with 10% revenue growth and positive free cash flow this quarter.

• Achieved record 180,000 new unique subscribers in 3Q24, highest in eight years, with 11.7% year-over-year growth.

• Strategic focus on network evolution and expansion into new territories is driving sustainable subscriber and revenue growth.

• Expansion territories now account for 8 million homes passed and are the main contributor to recent subscriber growth.

• Net income declined to MXN 500 million due to higher depreciation, interest expenses, and FX losses.

Financial highlights

• Consolidated revenues reached MXN 8.2 billion, up 10% year-over-year, with mass segment contributing 83% and corporate 17%.

• EBITDA grew 8% to nearly MXN 3.6 billion, with a margin of 43.6%; cable operations margin at 45.2%.

• CapEx for the quarter was MXN 2.7 billion, 33.5% of revenue, down from 51% last year.

• Net debt at MXN 22 billion; net debt/EBITDA ratio improved to 1.54x.

• ARPU per unique subscriber at MXN 418.9, stable year-over-year.

Outlook and guidance

• CapEx to revenue ratio expected to be closer to 32% for 2024 and below 30% in 2025, with steady CapEx and growing revenues.

• Management anticipates continued revenue and EBITDA growth, with improved cash flow as expansion matures.

• No large-scale projects planned; focus remains on consolidating expansion and capital discipline.

• Slower investment pace expected to continue, supporting low leverage and cash generation.

• Expansion and network evolution projects remain on track, with continued focus on subscriber and territory growth.