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NII Holdings Q1 Results - P&L Belies Underlying Strength
NII Holdings, the iDEN operator with subsidiaries in Argentina, Brazil, Chile, Mexico and Peru has reported Q1 numbers. These show a 3% year-on-year drop in revenues to $961m and a 14% decline in EBITDA, to $245m. The year-on-year comparatives get worse as we move down the P&L, with the operating results down 20.6%, the pre-tax down 29.1% while the after tax is off a third, at $70.6m. These numbers represent a real turnaround from previous NII figures - but it would be wrong to think this indicated any deterioration in the business. The drop in the figures is a direct result of the sharp drop in the value of the currencies of those countries where NII operates, compared to the US dollar in which it draws up its accounts. In constant currency terms, revenues were up 23% and EBITDA 34%.
Nextel International now has 6.5m customers connected to its five national networks. Over the last year, Mexico has grown from 2.27m to 2.82m, Brazil from 1.396m to 1.939m, Argentina from 851k to 978k, Peru from 521k to 704k and Chile from 12k to 29k. This last obviously recorded the greatest proportionate increase - of 141% - but all the businesses managed double digit gains, with Brazil and Peru both exceeding 35%.
ARPUs reflect the collapse of local currencies. In Mexico, the level of spend fell from $68 to $47, a drop of 31%, while there were reductions of 26% in Brazil, 19% in Peru and 8% in Argentina. The way that NII calculates these numbers makes it impossible to reverse engineer the figures to produce precise local currency ARPUs, but Peru and Mexico were about 8% down, while Brazil was little changed and Argentina nearly 5% ahead. According to NII, constant currency ARPUs were down 6% overall, which coheres with these indications.
Just before it published these numbers, NII announced a reduction in its target for net adds in 2009, from 1.275-1.350m to 1.1-1.2m. However, it has not revised its revenue or EBITDA targets, which remain in the range of $4.1-4.3bn and $1.0-1.1bn respectively. This confidence is encouraging and reflects the underlying strength of this specialist business.
Posted to the site on 30th April 2009
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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