Tele Columbus Group reports an increase in revenues in the second quarter of this year by 2.3 percent year on year to EUR 54.3 million. Compared with a high normalised EBITDA of EUR 25.4 million in the previous year's second quarter, the company showed growth of 9.2 percent year on year to EUR 27.7 million in the second quarter of 2015, generating an EBITDA margin uplift of 3.2 percentage points to 51.0 percent from 47.8 percent. With capital expenditures of EUR 23.4 million in the second quarter, Tele Columbus increased the number of households connected to its own two-way, fully upgraded network to 955,000 by 15,000 from March of this year.
In May 2015, the company successfully migrated 22,000 internet-only customers with low broadband speeds onto double flat products at a minimum of 16 Mbps. The churn on the migrated customer base was kept to a minimum. This underpinned the increase in telephony RGUs by 27,000 to a total of 202,000, up 15.3 percent quarter on quarter or 26.0 percent year on year. Based on this customer migration, the bundle rate increased to 82.7 percent at the end of June, up from 72.8 percent at the end of the first quarter of 2015 and from 73.0 percent at the end of the second quarter of 2014.
At the same time, internet RGUs reached 213,000 at the end of the second quarter (+12.3% y-o-y). Compared with the second quarter 2014, the number of subscriptions per Tele Columbus customer reached an all-time high of 1.50 RGUs per subscriber versus 1.42 RGUs a year earlier.
Monthly average revenue per user (ARPU) for the Internet & Telephony product in the second quarter jumped to EUR 23.20, up EUR 0.60 quarter on quarter and EUR 0.90 year on year. Total blended monthly ARPU showed stable growth of 3.3 percent to EUR 14.30 from EUR 13.90 in the same period of 2014.
The company continues executing its migration projects. By 30 June, approximately 57 percent or 955,000 of Tele Columbus' homes connected were upgraded for two-way communication and connected to its own Level 3 network, compared with 54 percent or 925,000 on 30 June 2014, an increase of 30,000.
In line with its future growth strategy, the company invested EUR 23.4 million in network and infrastructure upgrades in the second quarter, compared with EUR 12.5 million in the second quarter 2014 (+ 86.4%). Overall, the Internet & Telephony business continued to be the growth engine of Tele Columbus, generating revenues of EUR 15.1 million in the second quarter, reporting 20.3 percent growth year on year.
The management board of Tele Columbus confirms its guidance for the full fiscal year 2015 of Tele Columbus on a standalone basis. It is looking at the stabilisation of its homes connected base at 2014 levels. It expects revenue growth towards the lower end of the 4.0 percent to 6.0 percent range. It predicts expansion of the normalised EBITDA margin to more than 47.5 percent.
Capex will be between EUR 80 and EUR 100 million, compared with between EUR 110 and 120 million, with the additional amount deferred to 2016. There will be an increase in two-way upgraded networks connected to its own signal to more than 60 percent by year-end.
On the back of the Primacom acquisition announced in July, Tele Columbus increased its leverage temporarily to approximately 5.0 times normalised EBITDA, and expects to reduce leverage back to 3.0 to 4.0 times normalised EBITDA within 18-24 months.
