Revenue, EBITDA Surge for euNetworks

July 28th, 2016 by · Leave a Comment

The pan-European fiber builder and operator euNetworks reported its earnings today, a couple weeks ahead of their usual schedule.  And why not get the news out early, as they did have a very nice quarter, posting revenues and EBITDA up 10% and 30% over the same period last year.  Here are their numbers in some context:

 in millions of €, UOS  Q2/15 Q3/15 Q4/15 Q1/16 Q2/16
 - Fibre 6.1 6.5  6.6 6.7 6.8
 - Wavelengths 9.0 9.2 9.7 10.1 11.2
 - Ethernet 5.4 5.5 5.5 5.5 5.6
 - Non-focus 6.1 6.0 6.0 5.9 5.9
 - Energy, Amortised, Other 2.6 2.5 2.7 2.4 2.7
Total Revenue 29.2 29.6 30.6 30.6 32.2
Gross margin 77.2% 77.6% 77.6% 78.0% 78.4%
Adj EBITDA 8.2 8.2 9.9 9.8 10.7
Adj EBITDA margin 28.1% 27.7% 32.3% 32.0% 33.2%
Capital Expenditures 9.8 11.3 10.9 11.5 16.1
Proxy Cash Flow (1.6) (3.1) (1.0)  (1.7) (5.6)
New Sales (in thousands of €) 796 898 819 970 937
Installs (in thousands of €) 774 699 655 706 904
Monthly Incremental Service Revenue 240 166 197 381 254
Churn 1.1% 1.3% 0.9% 0.7% 1.1%

There are several interesting Q2 numbers in that table.  On the revenue side, while fiber and Ethernet were up sequentially it was in wavelengths that euNetworks had the big quarter with a jump of more than 10% sequentially.  Meanwhile, churn returned to levels seen last year at 1.1%, but 49% of those were service replacements due to a change in trading venue in their financial vertical, a factor which also probably contributed to the higher level of installs.  But the biggest individual shift was seeing capex rise to 50% of revenue during the quarter.  That clearly reflects the company's network expansions, adding dark fiber to Marseilles and Stockholm as well as other as-yet undisclosed projects.  While EBITDA and margins also jumped, those capex levels translated to a substantial amount of proxy cash flow spent.  Now privately held, euNetworks seems more willing and able to spend on longer term growth projects.

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Categories: Fiber Networks · Financials

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