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Towering H1 growth from Cellnex (shame about net losses)

Spain's Cellnex, Europe's biggest listed tower business, posted a fairly robust set of H1 financials (especially if you turn a blind eye to the net income/loss column).

Boosted by a string of acquisitions, EBITDA jumped 64%, year-on-year, to €527 million (US$603 million).

Group turnover came in at €723 million/$827 million (up 48%). Infrastructure services for mobile network operators contributed 77% (€553 million/$633 million), which is a hefty 70% increase compared with the same period in 2019.

More than 60% of Cellnex revenue (and 72% of EBITDA) is now generated outside the firm's domestic market.

Ups and downs
Because of feverish expansionist activity during H1 costing a head-turning €2.5 billion ($2.9 billion), which includes the purchases of OMTEL and NOS Towering in Portugal – plus the acquisition this month of Arqiva's Telecommunications division in the UK – Cellnex upped its full-year EBITDA guidance.

The revised EBIDTA forecast sits between €1.16 billion ($1.33 billion) and €1.18 billion ($1.35 billion), compared with the previous estimate of between €1.065 billion ($1.22 billion) and €1.085 billion ($1.24 billion).

The rapid expansion of the Group's geographical footprint beyond Spain, coupled with what Cellnex describes as an "intense acquisition process," has nonetheless come at a price.

Cellnex posted a H1 net loss of €43 million ($49 billion), largely because of higher amortizations related to acquisitions (up 95% compared with H1 2019) and heavier financial costs (up 23%).

Cellnex said it expected to post net losses in the "coming quarters," which perhaps explains why its share price fell by nearly 2% when news broke (although it recovered most of that lost ground a few hours later).

As of June 30, 2020, Cellnex had a total of 40,505 operational sites across Europe, plus 2,090 nodes (DAS and small cells).

Other lines of business include broadcasting infrastructures (16% of Group turnover) and solutions for "smart urban infrastructure management" (7%).

— Ken Wieland, contributing editor, special to Light Reading

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