ONO revenues fall 6.2% to EUR 371 mln in Q3

Reading today ONO’s performance indicators of the last quarter, I wanted to share some of this info in this post.

The Spanish cable operator reported third-quarter revenues of EUR 371 million, down 6.2 percent from EUR 396 million in the year-ago quarter. The decline was mainly as a consequence of the reduction in telephony and variable consumption and the reduction in the residential cable customer base in line with the strategy of acquiring quality customers implemented during the last year.

The EBITDA decreased 0.8 percent year-on-year to EUR 178 million and the EBITDA margin improved 2.6 percentage points to 48 percent. The gross margin grew to 78 percent from 76.7 percent previously. The company moved to a net profit of EUR 15 million from a net loss of EUR 4 million in the same period of the last year.

ARPU went down 4.4 percent versus the last year, to EUR 50.2. Net churn fell by 1.4 percent in the third quarter versus second quarter, but showing a decrease of 2.3 percent versus the third quarter of 2008. The company served 1.82 million residential customers at the end of September, down 2.7 percent year-on-year.

ONO won 1,000 telephony customers, up by 1.5 percent versus the year-earlier period. At the end of June, the company had 1.65 million telephony customers. The company served over 1.30 million broadband users, up 2.4 percent year-on-year. The residential internet penetration remained flat at 18.6 percent versus the quarter before but it experienced an increase of 0.3 percent versus the third quarter of 2008. ONO had some 977,000 pay-TV subscribers at end-September, down by 7.6 percent year-on-year.

As explained in previous posts (here and here), it’s difficult to play face-to-face against Telefonica. However ONO maintains a profitable operation in the market.  Current EBITDA margin unveils more than 700M of yearly EBITDA. Not bad. However, current profitability levels are not be enough for stakeholders that see that there’s still EUR 4,175 millions of debt and that at this growth rate, it will take time to reach their EBITDA expectations that might be around the EUR 1Bl per year. Let’s see how does the operator finish the year.

Best, CVA