SBA CEO Says They Were “Solid” in Q3, Added 889 Towers in South Africa

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SBA Communications Corporation (NASDAQ: SBAC) late yesterday reported results for the quarter ended September 30, 2019.

Highlights of the third quarter include:

  • Strong operating results in both the leasing and site development businesses
  • Net income of $21.8 million or $0.19 per share
  • AFFO per share growth of 12.0 percent over the year earlier period 
  • Closed on South Africa transaction adding 889 towers

“We had another solid performance in the third quarter,” commented President/CEO Jeffrey Stoops. “Our customers, domestic and international, continued to stay active primarily with 4G densification work but also, particularly in the U.S., with early 5G deployment. In the U.S., we believe we are at the beginning of a long-term 5G deployment cycle that we expect will sustain activity levels for quite some time, with international markets to follow.” 

Stoops added: “Operationally, we executed well again in the third quarter. We closed on the consolidation of our South Africa operation, smoothly integrating approximately 900 towers. We paid our first cash dividend, and allocated capital materially in three areas – portfolio growth, stock repurchases, and the cash dividend. All this positive activity helped contribute to double-digit growth in AFFO per share. We look forward to a strong finish to 2019.” 

Total revenues in the third quarter of 2019 were $507.5 million compared to $467.2 million in the year earlier period, an increase of 8.6 percent. Site leasing revenue in the quarter of $468.6 million was comprised of domestic site leasing revenue of $374.7 million and international site leasing revenue of $93.9 million. Domestic cash site leasing revenue was $371.4 million in the third quarter of 2019 compared to $350.4 million in the year earlier period, an increase of 6.0 percent. International cash site leasing revenue was $93.4 million in the third quarter of 2019 compared to $79.8 million in the year earlier period, an increase of 17.0 percent, or 17.9 percent excluding the impact of changes in foreign currency exchange rates.

Site leasing operating profit was $375.6 million, an increase of 9.5 percent over the year earlier period. Site leasing contributed 97.8 percent of the company’s total operating profit in the third quarter of 2019. Domestic site leasing segment operating profit was $310.9 million, an increase of 8.5 percent over the year earlier period. International site leasing segment operating profit was $64.7 million, an increase of 14.9 percent over the year earlier period.

Tower Cash Flow for the third quarter of 2019 of $376.3 million was comprised of Domestic Tower Cash Flow of $311.6 million and International Tower Cash Flow of $64.7 million. Domestic Tower Cash Flow for the quarter increased 7.4 percent over the prior year period and International Tower Cash Flow increased 18.2 percent over the prior year period. Tower Cash Flow Margin was 81.0 percent for the third quarter of 2019, as compared to 80.2 percent for the year earlier period.

Net income for the third quarter of 2019 was $21.8 million, or $0.19 per share, and included a $21.0 million loss, net of taxes, on the currency related remeasurement of U.S. dollar denominated intercompany loans with foreign subsidiaries, while net income for the third quarter of 2018 was $16.1 million, or $0.14 per share, and included a $17.1 million loss, net of taxes, on the currency related remeasurement of U.S. dollar denominated intercompany loans with a Brazilian subsidiary.

Adjusted EBITDA for the quarter was $355.4 million, an 8.3 percent increase over the prior year period. Adjusted EBITDA Margin was 70.6 percent in the third quarter of 2019 compared to 71.0 percent in the third quarter of 2018.

October 29, 2019

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