Grupo Iusacell: First Quarter 2004 Results
Thursday April 29, 8:02 pm ET
MEXICO CITY, April 29 /PRNewswire-FirstCall/ -- Grupo Iusacell, S.A. de C.V.
(NYSE: CEL; BMV) (Iusacell or the Company) today announced unaudited
financial results for the first quarter ended March 31, 2004(1).
Financial Results
Revenue in the quarter increased 2% from the previous quarter to P$1,326
million, and 8% from the first quarter in 2003 as a result of higher handset
sales, more effective advertising campaigns and also due to the good
acceptance of the renewed product offerings. As of March 31, 2004,
subscribers totaled approximately 1.3 million.
Cost of sales in the first quarter of 2004 decreased 2% from the previous
quarter to P$855 million. However, this item increased 95% from the first
quarter in 2003 mainly driven by the policy adopted in the third quarter of
2003 of expensing the postpaid handset-related costs rather than amortizing
them within the average life of the postpaid contracts.
Operating expenses: sales and advertising expenses in the quarter decreased
38% from the previous quarter to P$269 million and 5% from the first quarter
in 2003, mainly driven by lower advertising expense. General and
administrative expenses decreased 56% from the previous quarter to P$70
million and 22% from the year ago period as a result of the implementation of
new cost reducing measures.
EBITDA(2) increased to a positive figure of P$228 million, from a negative
amount of Ps$74 million in the previous quarter, but decreased 45% from the
first quarter in 2003 affected by the increase in the cost of sales, driven
mainly by the cost of handsets under the related adopted accounting policy.
Depreciation and amortization at P$496 million in the first quarter of 2004
reflected the Company's decision, adopted during 2003, of expensing the
postpaid handset-related costs rather than amortizing them within the
average life of the postpaid contracts.
Operating loss in the first quarter decreased to P$268 million from P$576
million recorded in the previous quarter and increased 14% from the first
quarter in 2003, mainly driven by the increased in cost of sales.
Integral financing cost in the first quarter decreased to P$22 million from
P$276 million in the previous quarter and P$448 million in the same quarter
of 2003. The result was mainly driven by an exchange gain of $52 million.
Net loss in the quarter amounted to P$346 million. This compares with a net
loss of P$1,340 million in the previous quarter and P$725 million in the first
quarter of 2003.
Capital expenditures: Iusacell invested approximately US$8 million in its
different coverage regions during this quarter to expand coverage.
Reconciliation between Net Loss and EBITDA
(Figures in million of constant
March 31, 2004 pesos) 1Q04 1Q03
Net loss for the period (346) (725)
Plus (less) the following items:
Depreciation and amortization 496 652
Integral financing cost 22 448
Taxes 55 26
Minority interest 0 (3)
Equity in earnings of subsidiaries 0 18
Reported EBITDA for the period 228 416
Recent Developments
Towers sale and-lease-back in the quarter, the Company sold and leased
back 46 towers to MATC for approximately P$95 million of net income,
proceeds were completely reinvested in the operation of the company.
Iusacell signed a contract with Unefon: Iusacell signed a contract with
Operadora Unefon S.A. of C.V. for the mutual service procurement of
capacity, based on traffic in the network of each one of the parts, being
limited to a specific coverage.
It is of our Knowledge that the agreement is still to be approved by Unefon's Board.
Iusacell reached an agreement with Telefonica on Short Message Service
(SMS): on February 12, 2004, Iusacell and Telefonica Moviles Mexico
(Telefonica) announced an agreement by which all subscribers of these
companies will be able to send and receive SMS among them. The service
became operative on February 15, 2004.
Lawsuit by the 2004 Note holders: In January 2004, certain holders of the
Senior Notes due 2004, which were issued by the Company's principal
subsidiary, Grupo Iusacell Celular, S.A. de C.V. ("Iusacell Celular"), filed a
lawsuit against Iusacell Celular and others, alleging breach of the Senior Note
Indenture. Iusacell Celular moved to dismiss the portion of the complaint that
requested the court to declare that the holders are entitled to the benefit of
liens senior to or at least equal in priority to liens held by the Company's
other creditors.
In response to the motion to dismiss, the holders filed an amended complaint
and now also seek injunctive relief barring Iusacell Celular and certain of its
subsidiaries from selling, transferring or otherwise encumbering their assets
pending decision on the merits of the holders' claim for specific performance.
The time in which to respond to the request for an injunction has not yet
expired. Iusacell Celular and the subsidiaries will respond to request for
injunctive relief in due course.
Shareholders Meeting and Resolution: On April 28, 2004, the Company held a
general annual ordinary shareholder's meeting by which its shareholders
approved, among other things, the 2003 audited financial results and elected
a new Board of Directors, which is now comprised of eight members instead
of nine.
The following table presents the members of the Board of Directors of Grupo
Iusacell, S.A. de C.V as of April 28, 2004:
Board of Directors
Ricardo B. Salinas Pliego Chairman of the Board of Directors
Pedro Padilla Longoria Vice Chairman of the Board of Directors
Gustavo Guzman Sepulveda Director
Luis Jorge Echarte Fernandez Director
Joaquin Arrangoiz Orvananos Director
Gonzalo Brockmann Garcia Director
Marcelino Gomez Velasco Director
Manuel Rodriguez de Castro Director
Legal Disclaimer
Grupo Iusacell, S.A. de C.V. quarterly reports and all other written materials
may from time to time contain statements about expected future events and
financial results that are forward-looking and subject to risks and
uncertainties. For those statements, the Company claims the protection of the
safe harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Discussion of factors that may affect future
results is contained in our filings with the Securities and Exchange
Commission.
Attached are the Consolidated Income Statements of each of Grupo Iusacell,
S.A. de C.V. and Grupo Iusacell Celular, S.A. de C.V. for the three-month
period ended March 31, 2004, and the Consolidated Balance Sheet of Grupo
Iusacell, S.A. de C.V. and Grupo Iusacell Celular, S.A. de C.V. at March 31,
2004. The financial statements of Grupo Iusacell Celular, S.A. de C.V. exclude
the impact on results and financial position of the US$350 million in 14.25%
Senior Notes due 2006, certain microwave equipment and related purchase
money indebtedness and the PCS business.
GRUPO IUSACELL CONSOLIDATED BALANCE SHEET
COMPARISON OF FIRST QUARTER 2004 WITH FIRST QUARTER 2003
(Figures in thousands of constant March 31, 2004 pesos)
1Q04 1Q03 Change
1Q04 /1Q03
ASSETS
Current Assets
Cash and marketable
securities 3,088 0.0% 52,217 0.3% -94.1%
Accounts receivable,
net 571,330 4.9% 593,829 3.9% -3.8%
Related Parties 118,156 0 0.0% 0%
Recoverable taxes and
other 236,553 2.0% 653,485 4.3% -63.8%
Inventories 283,092 2.4% 29,875 0.2% 847.6%
TOTAL CURRENT ASSETS 1,212,219 10.4% 1,329,406 8.8% -8.8%
Property and
equipment, net 7,483,237 64.1% 9,386,153 61.9% -20.3%
Excess of cost of
investments in
subsidiaries over
book value, net 1,895,546 16.2% 2,143,728 14.1% -11.6%
Other assets 1,090,880 9.3% 2,295,846 15.1% -52.5%
TOTAL ASSETS 11,681,882 100.0% 15,155,133 100.0% -22.9%
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Accrued liabilities 1,607,332 13.8% 1,010,542 6.7% 59.1%
Related parties 81,568 0.7% 0 0.0% 0%
Accounts payable 563,990 4.8% 159,362 1.1% 253.9%
Short-term debt 8,849,660 75.8% 128,251 0.8% 6800.3%
TOTAL CURRENT
LIABILITIES 11,102,550 95.0% 1,298,155 8.6% 755.3%
Non-current
liabilities 92,781 0.8% 8,912,929 58.8% -99.0%
TOTAL LIABILITIES 11,195,331 95.8% 10,211,084 67.4% 9.6%
Minority interest -41,429 -0.4% 6,485 0.0% -738.8%
Shareholders4 Equity
Capital stock 7,549,173 64.6% 7,549,173 49.8% -
Legal reserve 21,217 0.2% 21,217 0.1% -
Capital
contributions 1,485,567 12.7% 1,485,567 9.8% -
Net loss -345,874 -3.0% -724,605 -4.8% -52.3%
Accumulated earnings
from prior years -8,402,179 -71.9% -3,613,864 -23.8% -132.5%
Excess from
restatement of
shareholders'
equity 220,076 1.9% 220,076 1.5% -
TOTAL SHAREHOLDERS4
EQUITY 527,980 4.5% 4,937,564 32.6% -89.3%
TOTAL LIABILITIES AND
SHAREHOLDERS'
EQUITY 11,681,882 100.0% 15,155,133 100.0% -22.9%
GRUPO IUSACELL CONSOLIDATED INCOME STATEMENT
COMPARISON OF FIRST QUARTER 2004 WITH FIRST QUARTER 2003
(Figures in thousands of constant March 31, 2004 pesos)
1Q04 1Q03 Change
1Q04 /1Q03
REVENUE
Service 1,100,114 83.0% 1,155,604 94.2% -4.8%
Equipment
sales and
other 226,084 17.0% 71,210 5.8% 217.5%
TOTAL
REVENUE 1,326,198 100.0% 1,226,814 100.0% 8.1%
Cost of
services 419,486 31.6% 385,299 31.4% 8.9%
Other costs 435,189 32.8% 53,170 4.3% 718.5%
TOTAL COSTS 854,675 64.4% 438,469 35.7% 94.9%
GROSS MARGIN 471,523 35.6% 788,345 64.3% -40.2%
Sales &
Advertising
expenses 269,143 20.3% 282,873 23.1% -4.9%
General and
administrative
expenses 69,812 5.3% 89,441 7.3% -21.9%
Other income -95,025 -7.2% 0 0.0% 0.0%
TOTAL
OPERATING
EXPENSES 243,930 18.4% 372,314 30.3% -34.5%
EBITDA 227,593 17.2% 416,031 33.9% -45.3%
Depreciation
and
amortization 495,809 37.4% 652,180 53.2% -24.0%
OPERATING
LOSS -268,216 -20.2% -236,149 -19.2% 13.6%
Interest
expense, net 245,878 18.5% 239,388 19.5% 2.7%
Foreign
exchange
loss (gain) -52,260 -3.9% 292,616 23.9% -117.9%
Monetary
gain -171,729 -12.9% -84,416 -6.9% 103.4%
INTEGRAL
FINANCING
COST 21,889 1.7% 447,588 36.5% -95.1%
LOSS BEFORE
TAXES AND
STATUTORY
PROFIT
SHARING
COST -290,105 -21.9% -683,737 -55.7% -57.6%
Equity in
income
(losses) of
subsidiaries 24 0.0% 17,813 1.5% -
Taxes 55,467 4.2% 26,476 2.2% 109.5%
NET LOSS BEFORE
MINORITY
INTEREST -345,596 -26.1% -728,026 -59.3% -52.5%
Minority
interest 278 0.0% -3,421 -0.3% -108.1%
NET LOSS -345,874 -26.1% -724,605 -59.1% -52.3%
GRUPO IUSACELL CELULAR CONSOLIDATED BALANCE SHEET
COMPARISON OF FIRST QUARTER 2004 WITH FIRST QUARTER 2003
(Figures in thousands of constant March 31, 2004 pesos)
1Q04 1Q03 Change
1Q04 /1Q03
ASSETS
Current Assets
Cash and
marketable
securities 2,191 0.0% 53,551 0.4% -95.9%
Accounts
receivable,
net 563,869 5.4% 592,367 4.5% -4.8%
Related
parties 254,650 2.4% 108,519 0.8% 134.7%
Recoverable
taxes and
other 237,002 2.3% 505,846 3.8% -53.1%
Inventories 283,092 2.7% 29,875 0.2% 847.6%
TOTAL CURRENT
ASSETS 1,340,804 12.9% 1,290,158 9.7% 3.9%
Property and
equipment,
net 6,710,958 64.5% 8,530,672 64.3% -21.3%
Excess of
cost of
investments
in subsidiaries
over book
value,
net 1,709,439 16.4% 1,946,616 14.7% -12.2%
Other assets 641,861 6.2% 1,501,677 11.3% -57.3%
TOTAL
ASSETS 10,403,062 100.0% 13,269,123 100.0% -21.6%
LIABILITIES
AND
SHAREHOLDERS'
EQUITY
Current
Liabilities
Accrued
liabilities 638,612 6.1% 696,421 5.2% -8.3%
Related
parties 81,568 0.8% 0 0.0% -
Accounts
payable 471,839 4.5% 38,442 0.3% 1127.4%
Short-term
debt 4,642,492 44.6% 44,874 0.3% 10245.6%
TOTAL CURRENT
LIABILITIES5,834,511 56.1% 779,737 5.9% 648.3%
Non-current
liabilities 661 0.0% 4,666,525 35.2% -100.0%
TOTAL
LIABILITIES5,835,172 56.1% 5,446,262 41.0% 7.1%
Minority
interest -41,429 -0.4% 0 0.0% -
Shareholders4
Equity
Capital
stock 16,838,572 161.9% 16,838,572 126.9% -
Legal reserve 29,983 0.3% 29,983 0.2% -
Capital
contri-
butions 103,751 1.0% 103,751 0.8% -
Net loss -259,666 -2.5% -429,654 -3.2% -39.6%
Accumulated
earnings
from prior
years -11,360,372 -109.2% -7,976,842 -60.1% 42.4%
Excess from
restatement
of shareholders'
equity -742,949 -7.1% -742,949 -5.6% -
TOTAL
SHAREHOLDERS4
EQUITY 4,609,319 44.3% 7,822,861 59.0% -41.1%
TOTAL
LIABILITIES AND
SHAREHOLDERS'
EQUITY 10,403,062 100.0% 13,269,123 100.0% -21.6%
GRUPO IUSACELL CELULAR CONSOLIDATED INCOME STATEMENT
COMPARISON OF FIRST QUARTER 2004 WITH FIRST QUARTER 2003
(Figures in thousands of constant March 31, 2004 pesos)
1Q04 1Q03 Change
1Q04 /1Q03
REVENUE
Service 1,139,425 83.5% 1,151,669 94.2% -1.1%
Equipment
sales and
other 225,573 16.5% 70,933 5.8% 218.0%
TOTAL
REVENUE 1,364,998 100.0% 1,222,602 100.0% 11.6%
Cost of
services 425,795 31.2% 385,125 31.5% 10.6%
Other costs 435,189 31.9% 53,170 4.3% 718.5%
TOTAL COSTS 860,984 63.1% 438,295 35.8% 96.4%
GROSS MARGIN 504,014 36.9% 784,307 64.2% -35.7%
Sales &
Advertising
expenses 268,712 19.7% 282,865 23.1% -5.0%
General and
administrative
expenses 66,631 4.9% 82,182 6.7% -18.9%
Other income -68,588 -5.0% - 0.0% 0.0%
TOTAL
OPERATING
EXPENSES 266,755 19.5% 365,047 29.9% -26.9%
EBITDA 237,259 17.4% 419,260 34.3% -
Depreciation
and
amortization 457,171 33.5% 607,570 49.7% -24.8%
OPERATING
LOSS -219,912 -16.1% -188,310 -15.4% 16.8%
Interest
expense, net 91,679 6.7% 85,351 7.0% 7.4%
Foreign
exchange loss
(gain) -20,200 -1.5% 154,997 12.7% -113.0%
Monetary gain -82,065 -6.0% -42,200 -3.5% 94.5%
INTEGRAL
FINANCING
COST -10,586 -0.8% 198,148 16.2% -105.3%
INCOME (LOSS)
BEFORE TAXES AND
STATUTORY
PROFIT
SHARING
COST -209,326 -15.3% -386,458 -31.6% -45.8%
Equity in
losses of
subsidiaries 24 0.0% 17,813 1.5% -99.9%
Taxes 50,038 3.7% 26,476 2.2% 89.0%
NET LOSS BEFORE
MINORITY
INTEREST -259,388 -19.0% -430,747 -35.2% -39.8%
Minority interest 278 0.0% -1,093 -0.1% -
NET LOSS -259,666 -19.0% -429,654 -35.1% -39.6%
(1) Unless otherwise noted, all monetary figures are expressed in Mexican
pesos and presented as of March 31, 2004 in accordance with Mexican
GAAP. The symbols "P$" and "US$" refer to Mexican pesos and U.S.
dollars, respectively.
(2) This press release contains a reference to EBITDA and provides the
components of EBITDA on the face of the Consolidated Income Statement.
EBITDA is used by management for comparisons to other companies within
our industry as an alternative to GAAP measures and is used by
investors and analysts in evaluating performance. EBITDA, which is
earnings before interest, taxes, depreciation and amortization, is
computed by adding back net interest expense, income and asset tax
expense, depreciation expense and amortization expense to net income
(loss) before minority interest and loss of subsidiaries as reported.
EBITDA should be considered in addition to, but not as a substitute
for other measures of financial performance reported in accordance
with Mexican GAAP. EBITDA, as defined above, may not be comparable
to similarly titled measures reported by other companies.
Source: Grupo Iusacell, S.A. de C.V |
