Unshackled From the SGX, euNetworks Pushes Forward

We have one last earnings report for the first quarter left to look at.  The pan-European fiber operator euNetworks may no longer be listed on the Singapore exchange, but are still reporting their numbers.  And it was a pretty strong quarter, with revenues and EBITDA both up sequentially for the third consecutive quarter.  Here are their numbers in some context:

in millions of €, UOS	Q1/14	Q2/14	Q3/14	Q4/14	Q1/15
– Fibre	4.5			5.1	5.8
– Wavelengths	6.5			7.8	8.2
– Ethernet	5.1			5.3	5.3
– Non-focus	6.3			6.2	6.2
Total Revenue	25.4	25.1	25.7	27.2	27.8
Gross margin	73.5%	75.3%	76.1%	76.6%	77.5%
Adj EBITDA	6.5	7.0	7.5	7.5	7.6
Adj EBITDA margin	25.6%	27.8%	29.1%	27.5%	27.3%
Capital Expenditures	6.8	6.9	8.8	6.1	9.2
Proxy Cash Flow	(0.3)	0.1	(1.3)	1.3	(1.6)
New Sales (in thousands of €)	782.6	788.1	630.8	783.7	789
Installs (in thousands of €)	640.3	661.6	688.9	734.8	585
Monthly Incremental Service Revenue	155.1	225.9	254.2	123.9	209
Churn	1.0%	0.8%	1.1%	1.6%	1.0%

Dark fiber revenues surged during the quarter, and wavelengths did well also as monthly recurring product revenues grew faster than total revenues.  New Sales and MISR were both strong, although actual installs were down due to several expected factors.  Capex was up as the company invested in its infrastructure, as we saw recently with the opening of their low latency route to Zurich and the ongoing integration of the Fibrelac assets.  EBITDA was steady despite the extra expenses associated with the move off the SGX.

European fiber consolidation still beckons, although the pace of actual deals at the infrastructure level hasn’t approached what we saw in the USA a few years back.  euNetworks has more flexibility than it did before, and it should be interesting to see what they do with it.

 

 

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Categories: Financials · Metro fiber