Globo Cabo Consolidates Growth Trend Through Strong Operational Results
Compared to the First Quarter of 1999, Net Revenues Increased 5.8%, EBITDA Increased 38.6% and Subscriber Base Increased 1.4% in the First Quarter of 2000
SAO PAULO, Brazil (BUSINESS WIRE) - Globo Cabo S.A. (NASDAQ:GLCBY) today announced its financial results for the first quarter of 2000. Comments below are based on U.S. GAAP principals and all figures are stated in U.S. dollars.
I. Executive Summary - Results for the First Quarter 2000
Connected subscribers excluding Unicabo, increased to 949.1 thousand in the first quarter of 2000, compared to 936.1 thousand in the fourth quarter of 1999, representing an annualized increase of 5.7%. Although the subscriber base at the end of March 2000 was still around 1.0% below the base of March 1999, there has been a clear improvement in the subscriber base structure in terms of churn and of the subscription revenues mix.
Annualized churn rate decreased to 16.1% in the first quarter of 2000, compared to 21.5% during the same period last year. This level represents a deterioration from the fourth quarter of 1999, already showing an increase in commercial activity. This figure compares to international churn rate levels which are above 20%.
Advanced Package subscribers as a percentage of total subscribers grew to 54.5% in the first quarter of 2000, compared to 40.1% in the first quarter of 1999 and 52.9% in December of 1999, signaling that subscribers are perceiving more value in programming selections providing more options in terms of channels and services.
The provision for doubtful accounts dropped from 1.7% in the first quarter of 1999 and 2.0% in the last quarter of 1999 to 1.5% during the first quarter of 2000.
EBITDA in the first quarter of 2000 totaled US$ 21.7 million, representing an margin over net sales of 21.0% compared to US$ 17.4 million and 16%, respectively, in the fourth quarter of 1999.
Reflecting the Company's growth strategy, EBITDA of US$ 21.669 million in the first quarter of 2000 represents slight decrease from US$ 21.965 million EBITDA in the first quarter of 1999, while margin decreased to 21.0% from 23.3%, respectively. The decline in margin is a direct result of the increase in maintenance & programming costs and marketing expenses.
Net loss declined to US$ 20.9 million in the first quarter of 2000, compared to US$ 152.6million in the first quarter of 1999. This is a result of the reduction in net financial expenses after the recapitalization program (US$ 7.4 million in 1Q00 versus US$ 117.8 million in 1Q99 including loss on exchange rate), and a change in the depreciation method to more efficiently measure the useful life of assets.
The recapitalization initiated during the second half of 1999 was only concluded in January 2000, at which time approximately 90% of the R$350 million convertible debentures to preferred shares were issued. As such, comparing first quarter of 2000 with the same period last year, total debt increased to US$ 616.4 million in the first quarter of 2000 from US$ 610.1 million at the end of 1999 and net debt decreased to US$ 392.5 million from US$ 608.9 million as of the same periods, respectively. Considering that short-term obligations total US$ 269.1 million, which includes a portion of the short-term notes that will be paid to investors in 2000 (see item F), Globo Cabo's cash position totals US$ 223.9 million, demonstrating that the Company's short-term liquidity has improved significantly in the last 12 months. |
