SBA Communications Corporation (SBAC) yesterday reported results for the quarter ended June 30, 2020.
“We are very pleased with our second quarter results,” CEO Jeffrey Stoops said. “Through the entire period in all of our markets we operated under COVID-19 conditions, and I am extremely proud of the way in which our team members performed, the levels at which they performed and the fine results we were able to provide our customers and the communities we serve. Our operational performance, as best evidenced by our margins, continues to be excellent, and I commend all of our team members. In the US, activity levels were similar to first quarter levels but slower than the comparable year-ago period.”
Highlights of the second quarter include:
- Net income of $22.8 million or $0.20 per share and site leasing revenue of $482.4 million
- AFFO per share growth of 14.8 percent over the year earlier period on a constant currency basis
- Tower Cash Flow and Adjusted EBITDA margins of 81.8 percent and 72.8 percent, respectively
- Subsequent to quarter end, issued $1.35 billion of Tower Securities at a blended rate of 2.081 percent
Total revenues in the second quarter of 2020 were $507.2 million compared to $500.1 million in the year earlier period, an increase of 1.4 percent. Site leasing revenue in the quarter of $482.4 million was comprised of domestic site leasing revenue of $388.0 million and international site leasing revenue of $94.4 million.
Domestic cash site leasing revenue was $387.1 million in the second quarter of 2020 compared to $366.7 million in the year earlier period, an increase of 5.6 percent. International cash site leasing revenue was $95.0 million in the second quarter of 2020 compared to $89.4 million in the year earlier period, an increase of 6.2 percent, or 30.2 percent excluding the impact of changes in foreign currency exchange rates.
Site development revenues were $24.8 million in the second quarter of 2020 compared to $41.1 million in the year earlier period, a decrease of 39.7 percent.
Site leasing operating profit was $390.8 million, an increase of 6.9 percent over the year earlier period. Site leasing contributed 98.8 percent of the Company’s total operating profit in the second quarter of 2020. Domestic site leasing segment operating profit was $323.9 million, an increase of 6.7 percent over the year earlier period. International site leasing segment operating profit was $66.9 million, an increase of 8.0 percent over the year earlier period.
“We’ve seen a slower start than we expected to new revenue bookings post the T-Mobile-Sprint merger,” Stoops said, “but recent increases in leasing activities and backlogs give us confidence in the rest of the year. We expect to see increasing levels of operational activity in the US as we move through the year, with the reported financial results to follow. Internationally, demand remains solid as well although several of our markets have been particularly hard hit by the COVID-19 crisis, which we anticipate temporarily affecting the level of capital investment by some of our international wireless carrier customers. However, in these markets in particular the pandemic has highlighted the critical role of wireless as the primary source of broadband services, even before consideration of all of the benefits 5G service will bring. As business and consumer economic conditions improve in these markets we expect wireless capital spending will increase even more.”
“In addition to our strong operational performance, during the second quarter and early third quarter, we took advantage of very favorable capital markets conditions to build a fortress balance sheet. We lowered our weighted average interest rate, extended our maturities and increased liquidity to record levels. We are comfortable at current leverage levels, with future capital allocation priorities first to our dividend and then the substantial remaining amount of investable capital to opportunistic portfolio growth and stock repurchases. During these challenging times, we realize and appreciate the essential nature and mission-criticality of our business,” Stoops said.
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