Total Play Announces a 23% Increase in EBITDA, to Ps. 1,779 Million in the Third Quarter of 2020
MEXICO CITY, Oct. 16, 2020 /PRNewswire/ -- CIBANCO, S.A, Institución de Banca Múltiple, as Trustee of the CIB/3370 Trust, announces that Total Play Telecomunicaciones, S.A. de C.V. ("Total Play"), provider of triple play services in Mexico, and a Grupo Salinas company, announced today financial results for the third quarter of 2020.
Third quarter results
"Our technologically advanced triple play services translate into a notable market positioning and into the preference of an increasing number of users in the country," commented Eduardo Kuri, CEO of Total Play. "Superior attributes, coupled with greater geographic reach, further strengthened revenue and EBITDA this period, and generate strong prospects for outstanding performance in the future."
Revenues for the period were Ps.5,003 million, 39% above the Ps.3,588 million of the same quarter of the previous year. Total costs and expenses were Ps.3,224 million, compared to Ps.2,144 million from the previous year.
As a result, the company's EBITDA grew 23%, to Ps.1,779 million, from Ps.1,444 million a year ago; EBITDA margin for the quarter was 36%. Total Play recorded an operating loss of Ps.9 million, compared to an operating income of Ps.351 million a year ago.
The company recorded a net loss of Ps.258 million, from a net income of Ps.200 million in the same period of 2019.
3Q 2019
3Q 2020 Change
Ps. %
Revenues from services $3,588 $5,003 $1,415 39%
EBITDA $1,444 $1,779 $335 23%
Operating result $351 $(9) $(360)
Net result $200 $(258) $(458)
Amounts in millions of pesos.
EBITDA: operating income before depreciation and amortization
Revenues from services
The company's revenues grew 39%, as a result of a 37% increase in income from the residential segment and a 45% increase in revenues from the enterprise division.
The growth in revenues of Totalplay Residencial to Ps.3,688 million, compared to Ps.2,683 million of the previous year, results from a 55% growth in the number of subscribers, to 2'155,240, up from 1'391,816 a year ago. Revenue generating units -- RGUs -- increased by the same magnitude, to 5'672,512 at the end of the quarter, compared to 3'662,835 a year ago.
The growth reflects the preference of thousands of users for the solid offer of internet services with speeds of up to 500 Mbps, telephony solutions with worldwide coverage from the mobile application, as well as content on applications and linear TV attributes that optimize the experience of customer entertainment.
The increase in RGU's has an additional boost, derived from a 28% growth in the number of homes passed in the country, to 10.4 million at the end of the quarter --through 97,584 kilometers of fiber optics-- from 8.2 million a year ago.
Revenues from the enterprise segment grew to Ps.1,315 million, from Ps.905 million a year ago, due to growing demand from an increasing number of the largest companies in Mexico and government institutions for high-end internet services, video surveillance and cloud and management world-class solutions provided by the company.
Total enterprise segment clients grew 30% to 69,819 compared to 53,825 from the previous year.
Costs and expenses
Total costs and expenses grew 50%, as a result of a 48% increase in service costs and a 52% increase in general expenses. The increase in costs, to Ps.1,322 million, from Ps.891 million in the previous year, results mainly from the acquisition of connection links for optimal network operation -- in the context of growth in the geographic coverage of the company --, acquisition of content that offers superior entertainment options, and purchase of telecommunications equipment for business customers.
The increase in expenses, to Ps.1,902 million, from Ps.1,253 million, results from higher maintenance expenses to consolidate the optimal service, as well as personnel and advertising and promotion expenses, in the context of growing operations of the company.
EBITDA and net result
Total Play´s EBITDA was Ps.1,779 million compared to Ps.1,444 million from the previous year. The company recorded an operating loss of Ps.9 million, from an operating profit of Ps.351 million in the third quarter of 2019.
The main variations below EBITDA were the following:
A growth of Ps.584 million in depreciation and amortization, as a result of an increase in telecommunications equipment for new subscribers, as well as greater investments in coverage of the fiber optic network -- as part of the company's solid growth strategy.
A growth of Ps.307 million in interest expense, mainly derived from an increase in long-term financial debt.
Total Play registered a net loss of Ps.258 million, from a net income of Ps.200 million a year ago.
Balance Sheet
As of September 30, 2020, the company's debt with cost was Ps.19,532 million, compared to Ps.12,805 million from the previous year. The balance of cash and cash equivalents at the end of the quarter was Ps.113 million, from Ps.656 million a year ago.
The financial lease liability was Ps.4,380 million, compared to Ps.3,696 million from the previous year.
The increase of debt in the period is mainly related to the increase in Total Play´s subscriber base -- which implies the acquisition by the company, of a growing number of telecommunications equipment -- as well as to the strengthening of the working capital of Total Play.
Capex
During the first nine months of 2020, Total Play made investments of Ps.9,667 million, mainly aimed at the geographic expansion of its fiber optic network across the country, as well as in telecommunications equipment to connect a growing number of users to triple play services.
Corporate governance
The Executive Committee agreed to modify the bylaws of Total Play, to form in the next few days, a Board of Directors with at least 25% of independent directors, as well as Audit and Corporate Practices Committees, each with a majority of independent directors.
This way, the company reaffirms its commitment with the best corporate governance practices, and with strategies and procedures leading to optimal business management.
Nine month results
Revenues for the first nine months of 2020 were Ps.13,881 million, 39% above the Ps.10,003 million of the previous year, within the framework of dynamic growth in both residential and business revenues.
Total costs and expenses grew 46%, to Ps.8,957 million, from Ps.6,147 million, as a result of a 64% increase in costs for services -- mainly derived from the acquisition of connection links for optimal network operation fiber optics, cutting-edge content that satisfies thousands of users, and telecommunications equipment for business clients -- as well as a 35% increase in general expenses, due to higher network maintenance, personnel and advertising expenses and promotion.
Total Play reported EBITDA of Ps.4,924 million, 28% above the Ps.3,856 million of the previous year. Operating income was Ps.257 million, from Ps.824 million in the same period of 2019.
The company recorded a net loss of Ps.967 million, compared to a net income of Ps.534 million a year ago.
9M 2019
9M 2020 Change
Ps. %
Revenues from services $10,003 $13,881 $3,878 39%
EBITDA $3,856 $4,924 $1,068 28%
Operating result $824 $257 $(567) -69%
Net result $534 $(967) $(1,501)
Amounts in millions of pesos.
EBITDA: operating income before depreciation and amortization
About Total Play
Total Play is a leading Triple Play provider in Mexico that, thanks to the widest direct-to-home fiber optic network in the country, offers entertainment and technologically advanced services with the highest quality and speed in the market. For the latest news and updates about Total Play, visit: www.totalplay.com.mx
Total Play is a Grupo Salinas company (www.gruposalinas.com), a group of dynamic, fast growing, and technologically advanced companies focused on creating economic value through market innovation and goods and services that improve standards of living; social value to improve community wellbeing; and environmental value by reducing the negative impact of its business activities. 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. These companies include TV Azteca (www.TVazteca.com; www.irtvazteca.com), Grupo Elektra (www.grupoelektra.com.mx), Banco Azteca (www.bancoazteca.com.mx), Purpose Financial (havepurpose.com), Afore Azteca (www.aforeazteca.com.mx), Seguros Azteca (www.segurosazteca.com.mx), Punto Casa de Bolsa (www.puntocasadebolsa.mx), Totalplay (www.totalplay.com.mx) and Totalplay Empresarial (totalplayempresarial.com.mx). TV Azteca and Grupo Elektra trade shares on the Mexican Stock Exchange and in Spain's' Latibex market. Each of the Grupo Salinas companies operates independently, with its own management, board of directors and shareholders. Grupo Salinas has no equity holdings. The group of companies shares a common vision, values and strategies for achieving rapid growth, superior results and world-class performance.
Except for historical information, the matters discussed in this press release are concepts about the future that involve risks and uncertainty that may cause actual results to differ materially from those projected. Other risks that may affect Total Play and its subsidiaries are presented in documents sent to the securities authorities.
Investor Relations:
Bruno Rangel
Rolando Villarreal
Samantha Pescador
+ 52 (55) 1720 9167
+ 52 (55) 1720 9167
+52 (55) 3032 3639
jrangelk@totalplay.com.mx
rvillarreal@totalplay.com.mx
samantha.pescador@totalplay.com.mx
Press Relations:
Luciano Pascoe
Tel. +52 (55) 1720 1313 ext. 36553
lpascoe@gruposalinas.com.mx
TOTAL PLAY TELECOMUNICACIONES, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED QUARTERLY INCOME STATEMENTS
(Millions of Mexican pesos)
3Q19 3Q20 Change
$ %
$ %
$ %
Revenue from services 3,588 100% 5,003 100% 1,415 39%
Cost of services (891) (25%) (1,322) (26%) (431) (48%)
Gross profit 2,697 75% 3,681 74% 984 36%
General expenses (1,253) (35%) (1,902) (38%) (649) (52%)
EBITDA 1,444 40% 1,779 36% 335 23%
Depreciation and amortization (431) (12%) (639) (13%) (208) (48%)
Subscribers acquisition cost (685) (19%) (1,060) (21%) (375) (55%)
Other income (expenses) - Net 23 1% (89) (2%) (112) 487%
Operating profit (loss) 351 10% (9) (0%) (360) (103%)
Financial cost:
Interest revenue 26 1% 13 0% (13) (50%)
Accrued interest expense (82) (2%) (389) (8%) (307) (374%)
Other financial (expenses)
income -Net (24) (1%) 23 0% 47 (196%)
Foreign exchange (loss) gain
-Net (62) (2%) 112 2% 174 281%
Profit (loss) before income tax provision 209 6% (250) (5%) (459) (220%)
Income tax provision (9) (0%) (8) (0%) 1 11%
Net income (loss) for the period 200 6% (258) (5%) (458) (229%)
TOTALPLAY TELECOMUNICACIONES, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED ACCUMULATED INCOME STATEMENTS
(Millions of Mexican pesos)
Accumulated Accumulated
9M19 9M20 Change
$ %
$ %
$ %
Revenue from services 10,003 100% 13,881 100% 3,878 39%
Cost of services (2,260) (23%) (3,709) (27%) (1,449) (64%)
Gross profit 7,743 77% 10,172 73% 2,429 31%
General expenses (3,887) (39%) (5,248) (38%) (1,361) (35%)
EBITDA 3,856 39% 4,924 35% 1,068 28%
Depreciation and amortization (1,245) (12%) (1,794) (13%) (549) (44%)
Subscribers acquisition cost (1,838) (18%) (2,826) (20%) (988) (54%)
Other income (expenses) - Net 51 1% (47) (0%) (98) 192%
Operating profit 824 8% 257 2% (567) (69%)
Financial cost:
Interest revenue 41 0% 31 0% (10) (24%)
Accrued interest expense (285) (3%) (903) (7%) (618) (217%)
Other financial expenses (88) (1%) (63) (0%) 25 28%
Foreign exchange gain
(loss) -Net 63 1% (268) (2%) (331) (525%)
Profit (loss) before income tax provision 555 6% (946) (7%) (1,501) (270%)
Income tax provision (21) (0%) (21) (0%) 0%
Net income (loss) for the period 534 5% (967) (7%) (1,501) (281%)
TOTALPLAY TELECOMUNICACIONES, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of Mexican pesos)
As of September 30,
2019 2020 Change
$ %
$ %
$ %
Assets
---
CURRENT ASSETS
Cash and cash 656 2% 113 0% (543) (83%)
Customers - net 1,635 5% 2,647 6% 1,012 62%
Other receivables and recoverable taxes 1,748 6% 2,925 7% 1,177 67%
Other financial assets 1,061 3% 1,430 3% 369 35%
Inventories 924 3% 1,042 2% 118 13%
Prepaid expenses 211 1% 557 1% 346 164%
Total current assets 6,235 20% 8,714 20% 2,479 40%
NON-CURRENT ASSETS
Property, plant and equipmente -Net 21,342 69% 29,432 67% 8,090 38%
Rights-of-use assets -Net 2,651 9% 4,169 10% 1,518 57%
Other non-current assets 669 2% 1,395 3% 726 109%
Total non-current assets 24,662 80% 34,996 80% 10,334 42%
Total assets 30,897 100% 43,710 100% 12,813 41%
Liabilities and Stockholders' Equity
---
SHORT-TERM LIABILITIES
Short-term financial debt 1,115 4% 1,840 4% 725 65%
Trade payables 4,109 13% 9,877 23% 5,768 140%
Other payables and taxes 1,145 4% 1,998 5% 853 74%
Derivative financial instruments 0% 7 0% 7
n.m.
Lease liabilities 1,173 4% 1,627 4% 454 39%
Total short-term liabilities 7,542 24% 15,349 35% 7,807 104%
LONG-TERM LIABILITIES
Long-term financial debt 11,690 38% 17,692 40% 6,002 51%
Trade payables 1,015 3% 28 0% (987) (97%)
Other long-term payables 303 1% 151 0% (152) (50%)
Lease liabilities 2,523 8% 2,753 6% 230 9%
Total long-term liabilities 15,531 50% 20,624 47% 5,093 33%
Total liabilities 23,073 75% 35,973 82% 12,900 56%
STOCKHOLDERS' EQUITY 7,824 25% 7,737 18% (87) (1%)
Total stockholders' equity and
liabilities 30,897 100% 43,710 100% 12,813 41%
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SOURCE Total Play
