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Grupo Iusacell Announces Results For 4th Quarter 1997
February 19, 1998
Media contacts: |
Cynthia M. Pelini |
400,123 subscriber base, 72% YOY growth
$539 million pesos in revenues, 23% higher YOY
$142 million pesos in EBITDA, 26% of revenues
EBITDA growth of 256%
Mexico City, Mexico - Grupo Iusacell, S.A. de C.V. (BMV: IUSACEL,
NYSE: CEL and CEL.D) reported that its cellular subscriber base at
December 31, 1997 was 400,123 customers versus 232,906 customers as of
December 31, 1996, an increase of 167,217 subscribers, or 72%. This
strong subscriber growth, coupled with customer usage of $437 pesos
per month and outstanding efficiency improvements produced a fourth
quarter EBITDA margin of 26% (22% margin for the year) and cash flow
growth of 256%.
Tom Bartlett, CEO of Grupo Iusacell, noted, "These outstanding results
are the outcome of hard work and the timely implementation of the Bell
Atlantic wireless model. Going forward, 1998 will witness our
CDMA-digital roll-out, our systems upgrades, and our ongoing
investment in customer care and service quality. This represents a US
$200 million investment during 1998, a clear signal of the confidence
that the shareholders have regarding the opportunities in Mexico and
management's ability to maximize them. We will have the capacity and
the groundbreaking products and services necessary for continued
strong growth."
The company reported revenues of $539.4 million pesos for the 4th
quarter of 1997, a 23% increase compared to its reported revenues of
$440.1 million pesos for the 4th quarter of 1996, with all results
stated on a December 31, 1997 constant purchasing power basis.1
Revenue growth reflected the strong subscriber growth during 1997, as
well as price increases during the course of 1997 of approximately 15%.
Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)
for the 4th quarter of 1997 were $142 million pesos, compared to $39.9
million pesos in the fourth quarter of 1996 and represented a 256%
increase.
Iusacell posted a net loss for the quarter of $49.2 million pesos,
compared to a net loss of $328.7 million pesos in the fourth quarter
of 1996. The loss in the fourth quarter of 1996 included a $157.8
million peso reserve for restructuring costs in anticipation of a
change in management control of Iusacell; the change in control
occurred on February 18, 1997.
Operationally, Grupo Iusacell reported total service costs of $131.5
million pesos in the fourth quarter of 1997, or 24% of revenues, a 4.6%
decline from total service costs of $137.8 million pesos reported in
the fourth quarter of 1996. Sales, general and administrative expenses
were $198.6 million pesos in the fourth quarter of 1997, a 14.7%
decline from the $232.9 million pesos reported in the fourth quarter of
1996.
Fulvio del Valle, President and Director General of Iusacell, noted,
"There is no doubt that we're on a strong growth track. 1998 is a
window of opportunity to continue to build, through our $200 million
dollar capex program, on the productivity and efficiency gains of 1997
and position Iusacell as the best in class in its markets. When new
competition comes to Mexico through the PCS spectrum awards, we expect
to be the standard of service and quality against which the rest will
measure themselves. We will achieve this standard by our focused
investments in the network and in distribution and customer care. We
are especially proud of having brought contract churn down from over 4%
to 2.72%. The results will continue to speak for themselves."
Howard F. Zuckerman, CFO of Iusacell, added, "Our strong EBITDA for
the fourth quarter validates the restructuring efforts of 1997 and the
improvement in our business fundamentals. It positions Iusacell very
well for our growth plans for 1998 and beyond."
Average monthly minutes of use (MOU's) per subscriber for the fourth
quarter of 1997 were 101, as compared to 117 in the fourth quarter of
1996. This decline is attributable to a normal industry trend of
lower MOU's per subscriber as the cellular subscriber base expands,
and as a result of higher relative growth in the prepay subscriber
base. Average monthly revenue per subscriber declined to $437 pesos
in the fourth quarter of 1997, versus $489 pesos in the fourth quarter
of 1996; average monthly revenue per subscriber is not adjusted to
reflect constant peso purchasing power as of December 31, 1997.
Grupo Iusacell is a leading independent telecommunications company in
Mexico. It is the non-wireline cellular service provider in four of
Mexico's nine regions in the central portion of Mexico (including
Mexico City) covering a total of 66 million POPs - representing 70% of
the country's total population. Since February 1997, the Company has
been under the operating and management control of Bell Atlantic
which, through certain subsidiaries, owns 42% of the capital stock of
Grupo Iusacell.
Unaudited Fourth Quarter Operating Highlights
1997 1996 % Change
Cellular Subscribers (EOP) 400,123 232,906 71.8
Net Subscriber Additions 61,823 7,799 692.7
Avg Monthly MOU / Sub 101 117 (13.7)
Avg Monthly Rev / Sub $437 $489 (10.6)
Avg Monthly Contract Churn 2.72% 4.04% (32.7)
Paging Subscribers (EOP) 14,220 2,776 412.2
Number of Employees 1,892 2,348 (19.4)
Bell Atlantic - formed through the merger of Bell Atlantic and NYNEX -
is at the forefront of the new communications and information
industry. With 40.5 million telephone access lines and six million
wireless customers worldwide, Bell Atlantic companies are premier
providers of advanced wireline voice and data services, market leaders
in wireless services and the world's largest publishers of directory
information. Bell Atlantic companies are also among the world's
largest investors in high-growth global communications markets, with
operations and investments in 21 countries.