TOTAL PLAY ANNOUNCES 15% GROWTH IN EBITDA, TO Ps.18,361 MILLION IN 2023
--11% increase in revenue and 9% growth in costs and expenses in 2023, boost EBITDA margin to 45%, highest annual level since the company issues public debt--
--Subscriber base growth moderation strategy and strict financial discipline significantly strengthen Total Play's profitability, cash flow and liquidity--
--Firm increase in the company's cash and restricted cash balance; it grows 48%, to Ps.5,754 million at the end of the year--
MEXICO CITY, Feb. 20, 2024 /PRNewswire/ -- Total Play Telecomunicaciones, S.A.P.I. de C.V. ("Total Play"), a leading telecommunications company in Mexico that offers internet access, pay television and telephony services, through one of the largest 100% fiber optic networks in the country, today announced financial results for the fourth quarter 2023 and 2023.
"The strategy to moderate the growth of our subscriber base and initiatives that further drive operational efficiency, launched in 2023, together with the company's strict financial discipline, notably strengthened the profitability and cash generation of Total Play during the year. Rigorous budget planning, process optimization and structures rationalization translated into lower annual growth in costs and expenses compared to revenue and in a firm 15% increase in EBITDA in 2023," commented Eduardo Kuri, CEO of Total Play. "Capex figures, consistent with our solid strategy, allowed a significant positive balance of EBITDA less Capex - a fundamental indicator of cash flow generation - of Ps.2,735 million in 2023, notably higher than the negative figure of Ps.6,493 million a year ago."
"Likewise, the company's balance sheet was additionally strengthened, with a 48% growth in the cash and restricted cash balance, to Ps.5,754 million at the end of 2023, while the appropriate planning of the maturity profile allowed us to reduce debt with cost of short-term loans by 34%," added Mr. Kuri. "Our firm strategy has translated into increasing financial strength this year and we are determined to further drive the liquidity and robustness of Total Play's capital structure going forward."
Fourth quarter results
Revenue for the quarter totaled Ps.10,674 million, 10% above Ps.9,736 million in the same period of the previous year. Total costs and expenses were Ps.5,938 million, compared to Ps.5,356 million the previous year.
As a result, Total Play's EBITDA grew 8%, to Ps.4,736 million, from Ps.4,380 million a year ago; the EBITDA margin for the quarter was 44%. The company recorded operating income of Ps.605 million, compared to Ps.747 million a year ago.
Total Play reported a net loss of Ps.1,024 million, from a loss of Ps.438 million in the same quarter of 2022.
Q4 2022 Q4 2023 Change
Ps. %
Revenue from services $9,736 $10,674 $938 10 %
EBITDA $4,380 $4,736 $356 8 %
Operating income $747 $605 $(142) -19%
Net result $(438) $(1,024) $(586) -134%
Amounts in millions of pesos.
EBITDA: Earnings before interest, depreciation, and amortization.
Service revenue
The company's revenue grew 10%, as a result of a 7% increase in sales in the residential segment, and a 29% increase in revenue from the corporate business.
Totalplay Residencial's revenue growth, to Ps.8,945 million, compared to Ps.8,398 million the previous year, is related to a 10% increase in the number of subscribers of the company's services in the year, to reach 4,779,480 -- a figure that includes 69,554 small and medium-sized businesses -- at the end of 2023. Compared to the previous quarter, the number of net additions grew by 85,774 users, in line with Total Play's subscriber base growth moderation strategy.
The quarter's average revenue per subscriber (ARPU) was Ps.616, from Ps.617 a year ago.
As previously announced, in the first quarter of the year the company's investment program in geographic expansion concluded, given that the territory in which its target market is located throughout the country was reached. According to this, the number of homes passed in Mexico at the end of this period was 17,556,755, a figure with minor variations during 2023. Compared to the same quarter of 2022 -- in which the number of homes passed was 17,332,265 -- the growth was 1%.
Penetration -- proportion of homes passed by Total Play that have the company's telecommunications services -- was 27.2% at the end of the quarter, up from 25.2% a year ago.
Revenue from the business segment was Ps.1,729 million, from Ps.1,338 million the previous year, due to the implementation of various projects by business organizations this quarter.
Costs and expenses
Total costs and expenses grew 11%, as a result of a 19% increase in service costs and a 7% growth in general expenses.
The increase in expenses, to Ps.3,874 million, from Ps.3,627 million, reflects higher maintenance and fee expenses -- in the context of growing operations in the company --partially offset by reduction in personnel and advertising expenses, derived from strategies that generate strong operational efficiencies.
The increase in costs, to Ps.2,064 million, from Ps.1,729 million the previous year results mainly from increased costs of content and business projects, partially offset by lower costs of licenses and interconnection links.
EBITDA and net result
Total Play's EBITDA was Ps.4,736 million, 8% higher compared to Ps.4,380 million the previous year.
Relevant variations below EBITDA were the following:
Increase of Ps.498 million in depreciation and amortization, mainly as a result of subscriber acquisition costs -- telecommunication equipment, labor and installation expenses.
Growth of Ps.172 million in interest expense, consistent with the increase in the balance of financial debt.
Decrease of Ps.636 million in foreign exchange gains, as a consequence of net liability monetary position in foreign currency, together with lower appreciation of the peso against the basket of currencies in which the company's monetary liabilities are denominated this quarter, compared to the previous year.
Total Play reported a net loss of Ps.1,024 million, from a loss of Ps.438 million in the same period of 2022.
Balance sheet
As of December 31, 2023, the company's debt with cost was Ps.52,199 million, compared to Ps.49,533 million the previous year. The growth of the debt balance is related to credits with financial institutions during the period.
Consistent with the strategy to expand the company's maturity profile, the balance of debt with cost for short-term loans was reduced 34%, to Ps.4,573 million, from Ps.6,973 million a year ago.
The lease liability was Ps.5,665 million, 20% lower compared to Ps.7,073 million the previous year.
The balance of cash and cash equivalents, as well as restricted cash in trusts totaled Ps.5,754 million, 48% higher compared to Ps.3,878 million a year ago. As a result, the company's net debt was Ps.52,110 million, 1% lower than Ps.52,728 million the previous year.
Total Play's fixed assets -- which include the accumulated investment in fiber optics, telecommunications equipment, and the cost of acquiring subscribers, among other assets -- were Ps.61,946 million, 7% above Ps.58,165 million a year ago.
Twelve-month results
Revenue for 2023 was Ps.40,503 million, 11% above Ps.36,352 million from the previous year, within the framework of growth of 13% in residential income, to Ps.34,586 million, and 2% in business income, to Ps.5,917 million.
Total costs and expenses grew 9%, to Ps.22,142 million, from Ps.20,384 million, as a result of a 12% increase in general expenses and a 3% increase in service costs. Total costs and expenses grow at a lower rate than income as a result of strict compliance with budgets and strategies that generate operational efficiencies throughout the company.
Total Play reported EBITDA of Ps.18,361 million, 15% above the Ps.15,968 million of the previous year; The EBITDA margin was 45%, one percentage point above the previous year. Operating income was Ps.2,316 million, from a profit of Ps.3,097 million in 2022.
The company recorded a net loss of Ps.3,147 million, compared to a loss of Ps.2,251 million a year ago.
2022 2023 Change
Ps. %
Revenue from services $36,352 $40,503 $4,151 11 %
EBITDA $15,968 $18,361 $2,393 15 %
Operating income $3,097 $2,316 $(781) -25%
Net result $(2,251) $(3,147) $(896) -40%
Amounts in millions of pesos.
EBITDA: Earnings before interest, 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 well-being; 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. 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
+ 52 (55) 1720 9167
jrangelk@totalplay.com.mx
Rolando Villarreal
+ 52 (55) 1720 9167
rvillarreal@totalplay.com.mx
Press Relations:
Luciano Pascoe
Tel. +52 (55) 1720 1313 ext. 36553
lpascoe@gruposalinas.com.mx
TOTAL PLAY TELECOMUNICACIONES, S.A.P.I. DE C.V. AND SUBSIDIARIES
CONSOLIDATED QUARTERLY INCOME STATEMENTS
(Millions of Mexican pesos)
4Q22 4Q23 Change
$ %
$ %
$ %
Revenue from services 9,736 100 % 10,674 100 % 938 10 %
Cost of services (1,729) (18 %) (2,064) (19 %) (335) (19 %)
Gross profit 8,007 82 % 8,610 81 % 603 8 %
General expenses (3,627) (37 %) (3,874) (36 %) (247) (7 %)
EBITDA 4,380 45 % 4,736 44 % 356 8 %
Depreciation and amortization (3,633) (37 %) (4,131) (39 %) (498) (14 %)
Operating profit 747 8 % 605 6 % (142) (19 %)
Financial cost:
Interest revenue 38 0 % 53 0 % 15 39 %
Change in fair value of financial instruments (216) (2 %) (113) (1 %) 103 48 %
Accrued interest expense (1,289) (13 %) (1,461) (14 %) (172) (13 %)
Other financial expenses (99) (1 %) (54) (1 %) 45 45 %
Foreign exchange gain - Net 1,248 13 % 612 6 % (636) (51 %)
(318) (3 %) (963) (9 %) (645) n.m.
Equity interest in net results of non-controlling entities (1) (0 %) 0 % 1 100 %
Profit (Loss) before income tax provisions 428 4 % (358) (3 %) (786) (184 %)
Income tax provision (885) (9 %) (666) (6 %) 219 25 %
Net loss before non-controlling interest (457) (5 %) (1,024) (10 %) (567) (124 %)
Non-controlling interest 19 0 % 0 % (19) (100 %)
Net Loss for the period (438) (4 %) (1,024) (10 %) (586) (134 %)
TOTAL PLAY TELECOMUNICACIONES, S.A.P.I. DE C.V. AND SUBSIDIARIES
CONSOLIDATED ACCUMULATED INCOME STATEMENTS
(Millions of Mexican pesos)
Accumulated Accumulated
12M22 12M23 Change
$ %
$ %
$ %
Revenue from services 36,352 100 % 40,503 100 % 4,151 11 %
Cost of services (7,588) (21 %) (7,801) (19 %) (213) (3 %)
Gross profit 28,764 79 % 32,702 81 % 3,938 14 %
General expenses (12,796) (35 %) (14,341) (35 %) (1,545) (12 %)
EBITDA 15,968 44 % 18,361 45 % 2,393 15 %
Depreciation and amortization (12,871) (35 %) (16,045) (40 %) (3,174) (25 %)
Operating profit 3,097 9 % 2,316 6 % (781) (25 %)
Financial cost:
Interest revenue 98 0 % 191 0 % 93 95 %
Change in fair value of financial instruments (358) (1 %) (576) (1 %) (218) (61 %)
Accrued interest expense (4,228) (12 %) (5,528) (14 %) (1,300) (31 %)
Other financial expenses (254) (1 %) (393) (1 %) (139) (55 %)
Foreign exchange gain - Net 1,337 4 % 3,384 8 % 2,047 153 %
(3,405) (9 %) (2,922) (7 %) 483 14 %
Equity interest in net results of non-controlling entities (1) (0 %) (19) (0 %) 18 n.m.
Profit (Loss) before income tax provisions (309) (1 %) (625) (2 %) (316) (102 %)
Income tax provision (1,969) (5 %) (2,522) (6 %) 553 28 %
Net loss before non-controlling interest (2,278) (6 %) (3,147) (8 %) (869) (38 %)
Non-controlling interest 27 0 % 0 % 27 100 %
Net Loss for the period (2,251) (6 %) (3,147) (8 %) (896) (40 %)
TOTAL PLAY TELECOMUNICACIONES, S.A.P.I. DE C.V. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of Mexican pesos)
As of December 31,
2022 2023 Change
$ %
$ %
$ %
Assets
CURRENT ASSETS
Cash and cash equivalents 1,890 2 % 2,377 3 % 487 26 %
Restricted cash in trusts 1,988 2 % 3,377 4 % 1,389 70 %
Customers - net 5,506 7 % 4,426 5 % (1,080) (20 %)
Other accounts receivable 236 0 % 183 0 % (53) (22 %)
Recoverable taxes 3,810 5 % 4,141 5 % 331 9 %
Related parties 310 0 % 367 0 % 57 18 %
Inventories 2,342 3 % 2,926 3 % 584 25 %
Prepaid expenses 908 1 % 514 1 % (394) (43 %)
Total current assets 16,990 20 % 18,311 21 % 1,321 8 %
NON-CURRENT ASSETS
Related parties 154 0 % 237 0 % 83 54 %
Property, plant and equipmente - Net 58,165 70 % 61,946 71 % 3,781 7 %
Rights-of-use assets -Net 6,703 8 % 4,780 5 % (1,923) (29 %)
Trademarks and other assets 1,368 2 % 2,171 2 % 803 59 %
Total non-current assets 66,390 80 % 69,134 79 % 2,744 4 %
Total assets 83,380 100 % 87,445 100 % 4,065 5 %
Liabilities and Stockholders' Equity
SHORT-TERM LIABILITIES
Financial debt 6,973 8 % 4,573 5 % (2,400) (34 %)
Lease liabilities 2,108 3 % 2,338 3 % 230 11 %
Trade payables 10,751 13 % 13,373 15 % 2,622 24 %
Reverse factoring 2,691 3 % 2,234 3 % (457) (17 %)
Other payables and payable taxes 2,446 3 % 1,473 2 % (973) (40 %)
Related parties 365 0 % 1,012 1 % 647 177 %
Liabilities from contracts with customers 986 1 % 994 1 % 8 1 %
Interest payable 385 0 % 316 0 % (69) (18 %)
Derivative financial instruments 126 0 % 175 0 % 49 39 %
Total short-term liabilities 26,831 32 % 26,488 30 % (343) (1 %)
LONG-TERM LIABILITIES
Financial debt 42,560 51 % 47,626 54 % 5,066 12 %
Lease liabilities 4,965 6 % 3,327 4 % (1,638) (33 %)
Derivative financial instruments 764 1 % 1,442 2 % 678 89 %
Employee benefits 49 0 % 74 0 % 25 51 %
Deferred income tax 2,355 3 % 5,253 6 % 2,898 123 %
Total long-term liabilities 50,693 61 % 57,722 66 % 7,029 14 %
Total liabilities 77,524 93 % 84,210 96 % 6,686 9 %
STOCKHOLDERS' EQUITY 5,856 7 % 3,235 4 % (2,621) (45 %)
Total liabilities and stockholders' equity 83,380 100 % 87,445 100 % 4,065 5 %
TOTAL PLAY TELECOMUNICACIONES, S.A.P.I. DE C.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of Mexican pesos)
12th months period
ended
December 31,
2022 2023
Operating activities:
Loss before income tax provision (309) (625)
Items not requiring the use of resources:
Depreciation and amortization 12,871 16,045
Employee benefits 27 16
Items related to investing or financing activities:
Accrued interest income (98) (191)
Accrued interest expense and other financial transactions 4,840 6,497
Unrealized foreign exchange gain (1,299) (3,420)
Derivative financial instruments valuation 45
Non-Controlling Participation 27 19
16,104 18,341
Resources (used in) generated by operating activities:
Customers and unearned revenue (1,134) 1,087
Other receivables (91) 53
Related parties, net (91) 388
Taxes to be recovered 244 (330)
Inventories (462) (584)
Advance payments (442) 394
Trade payables 3,253 2,401
Other payables 440 (952)
Cash flows generated by operating activities 17,821 20,798
Investing activities:
Acquisition of property, plant and equipment (22,461) (15,626)
Other assets 82 (53)
Collected interest 98 191
Cash flows (used in) investing activities (22,281) (15,488)
Financing activities:
Capital contributions 122
Loans received 8,726 6,034
Leasing cash flows (3,075) (2,650)
Restricted Cash in Trusts (1,101) (1,389)
Reverse factoring 1,422 (457)
Derivative financial instruments (1,012)
Interest payment (3,910) (5,349)
Cahs flows generated by (used in) financing activities 2,184 (4,823)
Net (decrease) increase in cash and cash equivalents (2,276) 487
Cash and cash equivalents at the beginning of the year 4,166 1,890
Cash and cash equivalents at the end of the year 1,890 2,377
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SOURCE Total Play Telecomunicaciones, S.A.P.I. de C.V.
