Euskaltel loses 3 million euros second 2021 quarter, but increases its number of customers in the final stretch of the takeover bid launched by MásMóvil on the company.

Euskaltel lost 3.4 million euros in the second quarter of 2021, according to the results it has presented to the CNMV at the close of the market. Next Friday it will finally be known if the telecommunications company will become part of MásMóvil.

The group that integrates the brands Euskaltel, R, Telecable and Virgin telco, has recorded revenues of 174.3 million euros in this second quarter of 2021, representing a year-on-year increase of 1.5%.

These results are very similar to those recorded in the first quarter of this year, with revenues of 174.2 million euros, and losses of 2.1 million euros.

Gross operating profit or ebitda for this second quarter reached 73.9 million euros, down from 87.5 million euros recorded in the same period last year. The expansion of Virgin Telco in the Spanish market has been what has skyrocketed the costs of this semester.

Euskaltel loses 3 million euros second 2021 quarter

“The success of the 2020 loyalty campaigns, which have stabilized the customer base and pushed the ARPUs —average revenue per user—back to growth, coupled with the continuous implementation of efficiencies, have led to a solid evolution of EBITDA in the quarter,” the company said in a statement.

However, regarding the number of customers, the Euskaltel group continues on the path of growth in terms of customers. The teleco has closed this second quarter with 862,000 users, which is a new record, and 10.3% more than those registered in the second quarter of 2020.

"Euskaltel has emerged as one of the leaders in growth after the market crash caused by the pandemic crisis. It is currently among the 3 main operators in terms of customer growth in the Spanish market during the last 9 months and the company has increased its market share in mobile portabilities quarter by quarter, reaching in the second quarter, the record of 7.5% share of ported numbers”, the company assured in the same statement.

In addition, its new brand Virgin telco (with which it entered the national market in May 2020) has exceeded 120,000 customers in its first year. In total it has 122,000: 24,000 come from mobile services, and the remaining 98,000 customers from fixed services. With these results, the group has achieved more than 15 million euros in revenue.

Euskaltel loses 3 million euros second 2021 quarter

Virgin telco's good results are explained by the fact that the Euskaltel Group is present in 24.5 million households in Spain, 6 million more than in the last year.

The company says that the current project to upgrade the cable to fiber network, has caused an accelerated depreciation of 13 million euros. Without this effect, according to Euskaltel, the company would have generated more than 6 million euros of net profit in the quarter.

The results show a solid financial situation of the company, which on Friday will know if it will finally be acquired by MásMóvil, a company that recently launched a friendly takeover bid valued at 2,000 million euros, which already has the approval of the regulatory bodies.

Next July 30 will be the day when it will be known if the Basque group is finally acquired by the telecommunications company MásMóvil. For the purchase to take place, the transaction must be backed by at least 75% of the shareholders. The price offered per share is 11 euros.

Euskaltel loses 3 million euros second 2021 quarter

Although everything indicates that the operation will finally take place.

For the moment, MásMóvil already has the support of Kutxabank, Zegona, and Corporación Financiera Alba, which represents a 52,32% of the capital, with which it has signed an agreement to keep the headquarters in the region, jobs, and the three main brands, for 5 years.

If successful, the group resulting from this integration will total 14 million lines, and would enter about 2,700 million euros, which would become a clear competitor of Orange and Vodafone.

Currently, Euskaltel and MásMóvil are the fifth and fourth operators in Spain respectively.

Euskaltel loses 3 million euros second 2021 quarter

As established in the prospectus of the operation, after the purchase MásMóvil will suspend the payment of dividends among its shareholders and will convene an extraordinary meeting to remove the operator from the stock exchange.

In 2021, the Euskaltel group has advanced the payment of its supplementary dividend to the second quarter, this has meant the distribution of 80 million euros of dividends among its shareholders in the last 12 months.

Euskaltel loses 3 million euros second 2021 quarter