—Revenue increases 9% and costs and expenses grow 1% in the period, which reaffirms the sustained increase in EBITDA and generates three percentage points growth in EBITDA margin, to 47%—
—Capex for the quarter was Ps.3,739 million, equivalent to 37% of Total Play’s revenues, compared to Capex equivalent to 67% of revenue a year ago—
—Subscriber base growth moderation strategy and strict financial discipline significantly strengthen Total Play’s cash flow—
MEXICO CITY, Oct. 25, 2023 /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 third quarter of 2023.
“Total Play’s subscriber base growth moderation strategy continued to generate strong operating efficiencies in the quarter, which resulted in a notable reduction in the growth rate of total costs and expenses, which, together with higher revenue, translated into a 19% increase in EBITDA, and the highest EBITDA margin recorded by the company since it issued public debt,” commented Eduardo Kuri, CEO of Total Play. “The sustained EBITDA growth, combined with the Capex of the quarter, reflects strict financial discipline, and contributed to significantly boost the company’s cash generation.”
“The balance of EBITDA less Capex – a fundamental indicator of cash flow generation – was Ps.1,075 million in the period, compared to Ps.397 million the previous quarter and a negative figure of Ps.2,145 million a year ago, which shows the solid progress in Total Play’s liquidity boost plan. This allowed us to achieve a cash and restricted cash balance of Ps.5,578 million at the end of the period, more than double compared to the previous year,” added Mr. Kuri.
Third quarter results
Revenue for the quarter totaled Ps.10,136 million, 9% above Ps.9,303 million in the same period of the previous year. Total costs and expenses were Ps.5,322 million, 1% higher compared to Ps.5,248 million the previous year.
As a result, Total Play’s EBITDA grew 19%, to Ps.4,814 million, from Ps.4,055 million a year ago; The EBITDA margin for the quarter was 47%, three percentage points above the previous year. The company recorded operating income of Ps.819 million, compared to Ps.640 million a year ago.
Total Play reported net loss of Ps.2,130 million, from a loss of Ps.1,843 million in the same quarter of 2022.
|
3Q 2022 |
3Q 2023 |
Change |
||
|
Ps. |
% |
|||
|
Revenue from services |
$9,303 |
$10,136 |
$833 |
9 % |
|
EBITDA |
$4,055 |
$4,814 |
$759 |
19 % |
|
Operating income |
$640 |
$819 |
$179 |
28 % |
|
Net result |
$(1,843) |
$(2,130) |
$(287) |
(16 %) |
|
Amounts in millions of pesos. |
||||
|
EBITDA: Earning before interest, depreciation, and amortization. |
||||
Service revenue
The company’s revenue grew 9%, as a result of a 12% increase in sales in the residential segment, partially offset by a 9% decrease in revenue from the enterprise business.
Totalplay Residencial’s revenue growth, to Ps.8,847 million, compared to Ps.7,890 million the previous year, results from a 10% increase in the number of subscribers of the company’s services, to reach 4,624,312 at the close of the quarter. Consistent with the strategy of moderating the growth of Total Play’s subscriber base, the percentage increase in the number of users this period is the lowest since the company began issuing public debt. Compared to the previous quarter, the number of net additions grew by 106,142 users.
The average revenue per user (ARPU) for the quarter was Ps.630, compared to Ps.617 a year ago.
As previously announced, in the first quarter of the year the company’s investment program in geographic coverage concluded, given that the territory in which its target market is located throughout the country was reached. Accordingly, the number of homes passed at the end of the period was 17.5 million, constant for the first nine months of 2023. Compared to the same quarter 2022, which reported 17.1 million homes passed, growth was 3%.
Penetration — proportion of homes passed by Total Play that have the company’s telecommunications services — reached 26.4% at the end of the quarter, up from 24.6% a year ago.
Revenue from the enterprise segment was Ps.1,289 million, from Ps.1,413 million the previous year. The reduction of sales is part of the company’s efforts to boost liquidity, reducing its exposure to business projects with slow relative return on investment.
Costs and expenses
Total costs and expenses grew 1%, as a result of a 7% increase in operating expenses and an 8% decrease in service costs.
The increase in expenses, to Ps.3,495 million, from Ps.3,265 million, reflects higher advertising and promotion expenses and fees, in the context of growing operations at the company.
The decrease in costs, to Ps.1,827 million, from Ps.1,983 million the previous year, results mainly from reduction in business projects costs, lower licensing costs and renegotiation of content prices, within the framework of strict budget compliance.
EBITDA and net result
Total Play’s EBITDA was Ps.4,814 million compared to Ps.4,055 million the previous year.
Relevant variations below EBITDA were the following:
Increase of Ps.580 million in depreciation and amortization, mainly due to subscriber acquisition cost — telecommunications equipment, labor, and installation expenses.
Growth of Ps.329 million in interest expenses, congruent with an increase in the balance of financial debt.
Total Play reported net loss of Ps.2,130 million, from a loss of Ps.1,843 million in the same period of 2022.
Balance sheet
As of September 30, 2023, the company’s debt with cost was Ps.50,280 million, compared to Ps.46,915 million the previous year. The growth of the debt balance is related to loans with financial institutions during the period and the issuance of Certificados Bursátiles.
Consistent with the strategy to expand the company’s maturity profile, the short-term debt balance decreased 10%, to Ps.4,448 million, from Ps.4,916 million a year ago.
The lease liability was Ps.6,374 million, compared to Ps.6,485 million the previous year.
The balance of cash and cash equivalents, as well as restricted cash in trusts totaled Ps.5,578 million, more than double compared to Ps.2,698 million a year ago. As a result, the company’s net debt was Ps.51,076 million, from Ps.50,702 million the previous year.
The debt ratio — Net Debt / EBITDA for the last two annualized quarters — was 2.78 times, the lowest level since the company issued public debt, as a result of solid EBITDA growth, together with greater relative stability of the net debt balance.
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.60,365 million, 9% above the Ps.55,483 million a year ago.
Nine months results
Revenue for the first nine months of 2023 was Ps.29,830 million, 12% above the Ps.26,616 million of the previous year, within the framework of solid growth in residential income. Total costs and expenses grew 8%, to Ps.16,204 million, from Ps.15,028 million, as a result of a 14% increase in operating expenses and a 2% decrease in service costs.
Total Play reported EBITDA of Ps.13,626 million, 18% above the Ps.11,588 million of the previous year; The EBITDA margin for the period was 46%, two percentage points above the previous year. Operating income was Ps.1,712 million, from operating income of Ps.2,349 million in the same period of 2022.
The company recorded a net loss of Ps.2,123 million, compared to a loss of Ps.1,814 million a year ago.
|
9M 2022 |
9M 2023 |
Change |
||
|
Ps. |
% |
|||
|
Revenue from services |
$26,616 |
$29,830 |
$3,214 |
12 % |
|
EBITDA |
$11,588 |
$13,626 |
$2,038 |
18 % |
|
Operating income |
$2,349 |
$1,712 |
$(637) |
(27 %) |
|
Net result |
$(1,814) |
$(2,123) |
$(309) |
(17 %) |
|
Amounts in millions of pesos. |
||||
|
EBITDA: Earning 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.
|
TOTAL PLAY TELECOMUNICACIONES, S.A.P.I. DE C.V. AND SUBSIDIARIES |
|||||||||
|
CONSOLIDATED QUARTERLY INCOME STATEMENTS |
|||||||||
|
(Millions of Mexican pesos) |
|||||||||
|
3Q22 |
3Q23 |
Change |
|||||||
|
$ |
% |
$ |
% |
$ |
% |
||||
|
Revenue from services |
9,303 |
100 % |
10,136 |
100 % |
833 |
9 % |
|||
|
Cost of services |
(1,983) |
(21 %) |
(1,827) |
(18 %) |
(156) |
(8 %) |
|||
|
Gross profit |
7,320 |
79 % |
8,309 |
82 % |
989 |
14 % |
|||
|
Operating expenses |
(3,265) |
(35 %) |
(3,495) |
(34 %) |
230 |
7 % |
|||
|
EBITDA |
4,055 |
44 % |
4,814 |
47 % |
759 |
19 % |
|||
|
Depreciation and amortization |
(3,415) |
(37 %) |
(3,995) |
(39 %) |
580 |
17 % |
|||
|
Operating profit |
640 |
7 % |
819 |
8 % |
179 |
28 % |
|||
|
Financial cost: |
|||||||||
|
Interest revenue |
22 |
0 % |
48 |
0 % |
26 |
118 % |
|||
|
Accrued interest expense |
(1,057) |
(11 %) |
(1,386) |
(14 %) |
329 |
31 % |
|||
|
Other financial expenses |
(193) |
(2 %) |
(256) |
(3 %) |
(63) |
(33 %) |
|||
|
Loss exchange gain – Net |
(712) |
(8 %) |
(701) |
(7 %) |
(11) |
(2 %) |
|||
|
Loss before income tax provision |
(1,300) |
(14 %) |
(1,476) |
(15 %) |
(176) |
(14 %) |
|||
|
Income tax provision |
(551) |
(6 %) |
(654) |
(6 %) |
103 |
19 % |
|||
|
Minority Interest |
8 |
0 % |
– |
0 % |
(8) |
(100 %) |
|||
|
Net Loss for the period |
(1,843) |
(20 %) |
(2,130) |
(23 %) |
(287) |
(16 %) |
|||
|
TOTAL PLAY TELECOMUNICACIONES, S.A.P.I. DE C.V. AND SUBSIDIARIES |
|||||||||
|
CONSOLIDATED ACCUMULATED INCOME STATEMENTS |
|||||||||
|
(Millions of Mexican pesos) |
|||||||||
|
Accumulated |
Accumulated |
||||||||
|
9M22 |
9M23 |
Change |
|||||||
|
$ |
% |
$ |
% |
$ |
% |
||||
|
Revenue from services |
26,616 |
100 % |
29,830 |
100 % |
3,214 |
12 % |
|||
|
Cost of services |
(5,859) |
(22 %) |
(5,737) |
(19 %) |
(122) |
(2 %) |
|||
|
Gross profit |
20,757 |
78 % |
24,093 |
81 % |
3,336 |
16 % |
|||
|
Operating expenses |
(9,169) |
(34 %) |
(10,467) |
(35 %) |
1,298 |
14 % |
|||
|
EBITDA |
11,588 |
44 % |
13,626 |
46 % |
2,038 |
18 % |
|||
|
Depreciation and amortization |
(9,239) |
(35 %) |
(11,914) |
(40 %) |
2,675 |
29 % |
|||
|
Operating profit |
2,349 |
9 % |
1,712 |
6 % |
(637) |
(27 %) |
|||
|
Financial cost: |
|||||||||
|
Interest revenue |
60 |
0 % |
138 |
0 % |
78 |
130 % |
|||
|
Accrued interest expense |
(2,939) |
(11 %) |
(4,067) |
(14 %) |
1,128 |
38 % |
|||
|
Other financial expenses |
(296) |
(1 %) |
(802) |
(3 %) |
506 |
171 % |
|||
|
Foreign exchange gain – Net |
90 |
0 % |
2,771 |
9 % |
2,681 |
n.m. |
|||
|
Loss before income tax provision |
(736) |
(3 %) |
(248) |
(1 %) |
488 |
66 % |
|||
|
Income tax provision |
(1,086) |
(4 %) |
(1,856) |
(6 %) |
770 |
71 % |
|||
|
Minority Interest |
8 |
0 % |
– |
0 % |
8 |
100 % |
|||
|
Non-controlling participation |
– |
0 % |
(19) |
(0 %) |
19 |
n.a. |
|||
|
Net Loss for the period |
(1,814) |
(7 %) |
(2,123) |
(7 %) |
(309) |
(17 %) |
|||
|
TOTAL PLAY TELECOMUNICACIONES, S.A.P.I. DE C.V. AND SUBSIDIARIES |
||||||||||
|
CONSOLIDATED BALANCE SHEETS |
||||||||||
|
(Millions of Mexican pesos) |
||||||||||
|
As of September 30, |
||||||||||
|
2022 |
2023 |
Change |
||||||||
|
$ |
% |
$ |
% |
$ |
% |
|||||
|
Assets |
||||||||||
|
CURRENT ASSETS |
||||||||||
|
Cash and cash |
1,272 |
2 % |
1,750 |
2 % |
478 |
38 % |
||||
|
Restricted cash in trusts |
1,426 |
2 % |
3,828 |
4 % |
2,402 |
168 % |
||||
|
Customers – net |
5,284 |
7 % |
4,445 |
5 % |
(839) |
(16 %) |
||||
|
Recoverable taxes and other accounts receivable |
4,065 |
5 % |
4,537 |
5 % |
472 |
12 % |
||||
|
Inventories |
2,726 |
3 % |
2,765 |
3 % |
39 |
1 % |
||||
|
Prepaid expenses |
919 |
1 % |
516 |
1 % |
(403) |
(44 %) |
||||
|
Total current assets |
15,692 |
20 % |
17,841 |
21 % |
2,149 |
14 % |
||||
|
NON-CURRENT ASSETS |
||||||||||
|
Property, plant and equipmente – Net |
55,483 |
70 % |
60,365 |
70 % |
4,882 |
9 % |
||||
|
Rights-of-use assets -Net |
6,073 |
8 % |
5,445 |
6 % |
(628) |
(10 %) |
||||
|
Other non-current assets |
1,595 |
2 % |
2,340 |
3 % |
745 |
47 % |
||||
|
Total non-current assets |
63,151 |
80 % |
68,150 |
79 % |
4,999 |
8 % |
||||
|
Total assets |
78,843 |
100 % |
85,991 |
100 % |
7,148 |
9 % |
||||
|
Liabilities and Stockholders’ Equity |
||||||||||
|
SHORT-TERM LIABILITIES |
||||||||||
|
Short-term financial debt |
4,916 |
6 % |
4,448 |
5 % |
(468) |
(10 %) |
||||
|
Trade payables |
11,890 |
15 % |
15,499 |
18 % |
3,609 |
30 % |
||||
|
Other payables and taxes |
4,738 |
6 % |
3,987 |
5 % |
(751) |
(16 %) |
||||
|
Derivative financial instruments |
766 |
1 % |
57 |
0 % |
(709) |
(93 %) |
||||
|
Lease liabilities |
1,919 |
2 % |
2,399 |
3 % |
480 |
25 % |
||||
|
Total short-term liabilities |
24,229 |
31 % |
26,390 |
31 % |
2,161 |
9 % |
||||
|
LONG-TERM LIABILITIES |
||||||||||
|
Long-term financial debt |
41,999 |
53 % |
45,832 |
53 % |
3,833 |
9 % |
||||
|
Other long-term payables |
1,539 |
2 % |
4,267 |
5 % |
2,728 |
177 % |
||||
|
Derivative financial instruments |
– |
0 % |
2,086 |
2 % |
2,086 |
n.a. |
||||
|
Lease liabilities |
4,566 |
6 % |
3,975 |
5 % |
(591) |
(13 %) |
||||
|
Total long-term liabilities |
48,104 |
61 % |
56,160 |
65 % |
8,056 |
17 % |
||||
|
Total liabilities |
72,333 |
92 % |
82,550 |
96 % |
10,217 |
14 % |
||||
|
STOCKHOLDERS’ EQUITY |
6,510 |
8 % |
3,441 |
4 % |
(3,069) |
(47 %) |
||||
|
Total stockholders’ equity and liabilities |
78,843 |
100 % |
85,991 |
100 % |
7,148 |
9 % |
||||
|
TOTAL PLAY TELECOMUNICACIONES, S.A.P.I. DE C.V. AND SUBSIDIARIES |
|||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||
|
(Millions of Mexican pesos) |
|||||
|
Nine months period ended |
|||||
|
September 30, |
|||||
|
2022 |
2023 |
||||
|
Operating activities: |
|||||
|
Loss before income tax provision |
(728) |
(267) |
|||
|
Items not requiring the use of resources: |
|||||
|
Depreciation and amortization |
9,239 |
11,914 |
|||
|
Employee benefits |
23 |
7 |
|||
|
Items related to investing or financing activities: |
|||||
|
Accrued interest income |
(60) |
(138) |
|||
|
Accrued interest expense and other financial transactions |
3,233 |
4,880 |
|||
|
Loss on unrealized changes – net |
(78) |
(2,832) |
|||
|
Effect per conversion |
– |
6 |
|||
|
Non-controlling participation |
(8) |
19 |
|||
|
11,621 |
13,589 |
||||
|
Resources (used in) generated by operating activities: |
|||||
|
Customers and unearned revenue |
(1,120) |
756 |
|||
|
Other receivables |
4 |
49 |
|||
|
Related parties, net |
– |
420 |
|||
|
Taxes to be recovered |
323 |
(275) |
|||
|
Inventories |
(847) |
(423) |
|||
|
Advance payments |
(453) |
392 |
|||
|
Trade payables |
1,948 |
2,564 |
|||
|
Other payables |
1,207 |
(725) |
|||
|
Cash flows generated by operating activities |
12,683 |
16,347 |
|||
|
Investing activities: |
|||||
|
Acquisition of property, plant and equipment |
(16,970) |
(11,815) |
|||
|
Other assets |
53 |
(63) |
|||
|
Collected interest |
60 |
138 |
|||
|
Cash flows (used in) investing activities |
(16,857) |
(11,740) |
|||
|
Financing activities: |
|||||
|
Capital contributions |
122 |
– |
|||
|
Loans received |
5,388 |
3,304 |
|||
|
Leasing cash flows |
(2,142) |
(1,936) |
|||
|
Restricted Cash in Trusts |
(539) |
(1,840) |
|||
|
Reverse factoring |
1,132 |
(466) |
|||
|
Financial derivative instruments |
(9) |
– |
|||
|
Interest payment |
(2,672) |
(3,809) |
|||
|
Net cash flows generated by financing activities |
1,280 |
(4,747) |
|||
|
Increase in cash and cash equivalents |
(2,894) |
(140) |
|||
|
Cash and cash equivalents at the beginning of the year |
4,166 |
1,890 |
|||
|
Cash and cash equivalents at the end of the year |
1,272 |
1,750 |
|||
SOURCE Total Play Telecomunicaciones, S.A.P.I. de C.V.
