- Revenues up 27% to Ps.2,440 Million in the Quarter - - Net Income Increases to Ps.136 Million - MEXICO CITY, July 27 /PRNewswire-FirstCall/ -- Grupo Iusacell, S.A. deC.V. (BMV: CEL) ("Iusacell"), a wireless cellular and PCS service providerin Mexico with a national footprint, today reported its financial resultsfor the second quarter of 2007. "We have crafted the cellular operator with the most advancedtechnology in Mexico, and with a highly important operational scale andmarket positioning through our merger with Unefon Holdings," said GustavoGuzman, CEO of Grupo Iusacell. "The merger will facilitate increased gainsin operating efficiency and the creation of significant synergies, whichwill translate into an outstanding financial and operational outlook forthe second half of 2007, and subsequent years." During the quarter, Grupo Iusacell developed optimum strategies for thepositioning and marketing of its brands-Iusacell and Unefon-streamlinedoperating processes to minimize expense duplication, and completed a growthplan of 80% in its network coverage through more efficient distribution ofits transmission towers throughout the Mexico. The company believes the abovementioned actions translates in to anincreasing strength in operational performance, starting in the second halfof 2007. As previously announced, the merger between Grupo Iusacell and UnefonHoldings took placed in the period, thus the second quarter 2007 financialresults, are consolidated figures. Second Quarter Results Change 2Q06 2Q07 $ % Net Revenue 1,919 2,440 522 27% EBITDA 310 409 98 32% Net (Loss) Income (899) 136 1,035 n.a. Million of pesos constant purchasing power as of June 30, 2007. EBITDA is Operating Profit Before Depreciation and Amortization underMexican GAAP. Net Revenue Net revenue during the quarter was Ps.2,440 million, a 27% risecompared with Ps.1,919 million in the same period of 2006. Growth resultsmainly from: i) the incorporation of Unefon's revenues to the consolidatednumbers-as a result of the merger, ii) increase air time, rents andincoming roaming, as well as iii) revenue from the "Nationwide CallingParty Pays" service, which did not exist in the second quarter of 2006. Subscribers Base As of June 30, 2007, Grupo Iusacell had 3.9 million subscribers, anincrease of 96% compared with the 2 million reported a year ago. Theincrease was driven by the incorporation of the significant subscriber'sbase of Unefon. Costs and Expenses Quarterly costs were Ps.1,469 million, compared with Ps.1,155 millionin the same period last year. The rise in cost was primarily the result of:i) the incorporation of Unefon costs as a result of the merger, ii) anincrease in handset subsidies due to an important number of newsubscribers, and iii) interconnection costs associated with the "NationwideCalling Party Pays" service, not present last year. Operating costs totaled Ps.563 million, up from Ps.453 million in thesecond quarter last year. Growth is mainly due to increased personnel andadvertising costs resulting from the significant increase in company'sdimensions. EBITDA and Net Income As a result of a larger increase in sales, compared with the growth incosts and expenses, EBITDA for the quarter was Ps.409 million, a 32% risefrom Ps.310 million in the same period last year. EBITDA margin was 17%,one percentage point above the 16% in the second quarter last year. Below EBITDA, financing costs totaled Ps.169 million, an 80% reductionfrom Ps.829 million in the same period last year. The decrease is mainlyattributed to an exchange gain of Ps.189 million in the period, comparedwith an exchange loss of Ps.446 million a year ago. The exchange gain thisquarter is the result of a 2% peso average appreciation against the dollar,and net dollar liability monetary position in the period. The provision for asset tax was Ps.225 million, compared with Ps.1million a year ago, due to changes in the Asset Tax Law. Unlike 2006, thecurrent law does not allow companies to deduct its debt balance from itsassets for the calculation of the tax base. The company reported a profit of Ps.648 million as a result of thecancellation of liabilities of Unefon's deferred income tax, which GrupoIusacell will include in the consolidation for fiscal proposes. Net earnings were Ps.136 million, a positive change of Ps.1,035 millioncompared with a net loss of Ps.899 million in the second quarter of 2006. Capex During the quarter, the company's capex was US$14 million. Capitalexpenditures were primarily allocated to the expansion of coverage andnetwork capacity of Iusacell's 3-G network and EV-DO services, which giveGrupo Iusacell users access to a large variety of services and multimediaapplications that are unique in Mexico. Debt Total debt as of June 30, 2007 was US$923 million, of which US$596million is denominated in dollars and the rest is in Mexican pesos. Totaldebt matures, on average, in 2011. Stockholders' Equity As of June 30, 2007, the company's stockholder's equity was Ps.3,338million, compared with a negative stockholder's equity of Ps.3,584 millionof 2006. The increase reflects the positive equity effects resulting fromGrupo Iusacell's debt restructuring-which was previously announced, capitaladditions from the merger with Unefon Holdings, and earnings from theperiod. Six Month Results Net revenue for the first six months was Ps.4,484 million, an 18%increase from Ps.3,797 million in the same period a year earlier. EBITDAwas Ps.784 million, up 31% from Ps.596 million in the same period in 2006.Net loss was Ps.1,096 million, down 22% from Ps.1,409 million in the firstsix months of last year. Change 6M06 6M07 $ % Net Revenue 3,797 4,484 687 18% EBITDA 596 784 188 31% Net Loss (1,409) (1,096) 312 22% Million of pesos constant purchasing power as of June 30, 2007. EBITDA is Operating Profit Before Depreciation and Amortization underMexican GAAP. About Iusacell Grupo Iusacell, S.A. de C.V. (Iusacell, BMV: CEL) is a wirelesscellular and PCS service provider in Mexico with a national footprint.Iusacell offers more and better voice communication and data servicesthrough state-of-the-art technology, such as its new 3G network, throughoutall of the regions in which it operate. In addition to its core mobiletelephony services, Iusacell also provides a wide range of othertelecommunications services, including long distance, wireless localtelephony and data transmission services. Grupo Iusacell is a company ofGrupo Salinas's company
Iusacell Announces EBITDA Growth of 32% in 2Q07, To Ps.409 Million
August 08, 2007, 1:04 a.m. EDT 9 Min Read
