The towerco also posted earnings for the first nine months, reporting revenues of over €3bn, lowers losses, generates free cash flow ahead of 2024 goal
Cellnex Networks, the passive infrastructure giant headquartered in Barcelona, has pulled out of the 4G and 5G private networks market. It acquired Finnish firm Edzcom in July 2020, for an undisclosed sum, touting private networks as an important engine of growth.
Now it has announced it will sell that acquired business to Boldyn Networks, which describes itself as “one of the largest neutral host providers in the world”. The deal is subject to the usual regulatory scrutiny. There is no information concerning the price, but Cellnex says it plans to complete the deal before the end of next March.
Change of focus
Things started well: in March 2022 Edzcom signed up engineering group Segula Technologies in Germany to much fanfare. It expected this foot in the door of the automotive would lead to more business in the sector and elsewhere, to leverage the economics of scale.
Still, much has changed in the intervening two years and, as Cellnex set out at MWC 2023, its focus is on its core tower and associated operations, and reducing the heavy debt incurred in building its portfolio, fuelled by cheap money and low inflation.
First nine months
Cellnex’s revenues for the first nine months of the year were more than €3 billion. Earnings before interest, taxation, and amortisation (EBITDA) rose by more than 16%. Adjusted EBITDA was €2.248 billion, compared with €1.937 billion at the same point in 2022.
This was on the back of organic growth – a 6.8% increase in points of presence (PoPs) at existing sites – and consolidation of its footprint. This includes in March agreeing to sell 1,225 French towers to Phonenix Tower International for €631 million with another €360 million to come in 2024. In September, Cellnex sold 49% of its business in Sweden and Denmark to Stonepeak for €730 million.
Ahead of schedule
The towerco also achieved free cash flow of €436 million, compared with minus €774 million for the first nine months of 2022. This is ahead of the scheduled target date of 2024. It also reduced debt by €300 million during the last quarter, that is since the end of H1, and maintains its determination to gain higher S&P investment grading by 2024 at the latest.
Its net financial debt stands at €17.6 billion of which 75% is at a fixed rate. Cellnex has available liquidity (cash and undrawn debt) of about €4.6 billion. The Board has approved a dividend payment of € 0.04035 per share, charged to the share premium reserve, which will be effective on 23 November.
Going to plan
Marco Patuano, CEO of Cellnex, commented, “This period has been marked by excellent commercial performance and consistent operational execution, with revenues and EBITDA well on track and our free cash flow turning positive earlier than anticipated.
“Once again, we are confirming all our short and medium term financial targets including achieving positive [free cash flow] by the end of the year, ahead of the planned 2024 timeframe, thanks to a strict control of CAPEX expenditure. We are making good progress on reducing debt thanks to the disposal of sites in France and the recent deal in the Nordics.”
He added, “We are introducing a new organizational model [announced at MWC 2023] fully aligned with our Next Chapter objectives and enabling commercial and operational excellence”.