by John Celentano, Inside Towers Business Editor
SBA Communications (NASDAQ: SBAC) is feeling good about its trajectory. The company upgraded its overall outlook for full-year 2020 based on a strong showing in 3Q20.
SBAC reported total 3Q20 revenues of $522.9 million, up 3 percent from $507.5 million in 3Q19. Site leasing revenues were $486.8 million comprising $391.0 million in the U.S. markets and $95.8 million from international markets.
Note that SBAC derives 80 percent of its site leasing revenues from the U.S. market even though its tower portfolio is divided nearly 50/50 between the U.S. and international markets.
Consolidated adjusted EBITDA for the quarter was $373.3 million, up 5.0 increase over the prior year period.
AFFO for the quarter was $270.1 million, a 9.2 percent increase over 3Q19 results with AFFO per share of $2.38, a 15.3 percent increase over 3Q19 on a constant currency basis.
The company updated its full-year 2020 guidance for consolidated site leasing revenues of $1,947-1,957 million, up 6 percent from its 2Q20 projections, excluding foreign exchange impacts. At the same time, SBAC raised adjusted EBITDA by 9.5 percent to $1,485-1,495 million and AFFO by 26.0 percent to $1,053-1,079 million.
SBAC’s site leasing revenues are highly concentrated. In the U.S. market, T-Mobile, AT&T, and Verizon account for 91 percent of the total. T-Mobile alone accounted for $157 million or 40 percent of 3Q20 domestic site leasing revenues.
Outside the U.S., Oi S.A. of Brazil is the largest single customer accounting for 28 percent or $27 million of international site leasing revenues, on a constant currency basis. Overall site enhancement activity in international markets has slowed due to COVID-19 impacts. SBAC says Oi S.A. has advised that some site expansion activity is on a temporary hold until 2021 when it expects to fully resume network operations.
SBAC indicates that site activity with T-Mobile picked up in the quarter as the carrier moved ahead with its 5G deployment plans in the aftermath of its merger with Sprint. SBAC expects that activity to accelerate into 2021.
Moreover, the company says that churn activity with Sprint leases is still low. Some Sprint leases extend for another four years out while most have five to six years left. SBAC expects related churn activity to be heavily weighted towards the back end of those leases.
With other carriers, SBAC sees a steady level of activity with no pronounced turndowns in either AT&T or Verizon site work. Without being specific, SBAC says that it is in discussions with other carriers including DISH Network and winners of 3.5 GHz CBRS licenses about their 2021 network build plans.
Once the C-band auction finalizes, the company expects to engage auction winners before the end of the year.
During 3Q20, SBAC acquired a total of 44 communication sites and one data center for a total cash consideration of $73.5 million. The company also built 75 towers in international markets during the quarter.
At the end of 3Q20, SBAC owned or operated 32,724 communication sites. Of the total, 16,495 are in the U.S. and its territories, and 16,229 are located internationally.
SBAC spent $7.2 million to purchase land and easements and to extend ground lease terms.
Total cash capital expenditures for 3Q20 were $109.3 million consisting of $101.3 million of discretionary cash capex (new tower builds, tower augmentations, acquisitions, and purchasing land and easements). and $8.0 million of non-discretionary cash capex (tower maintenance and general corporate).
SBAC expects its full-year 2020 discretionary capex to be in the $356-366 million range.
Prior to the end of 3Q20, SBAC acquired 54 communication sites for a total of $14.6 million in cash. In addition, the company agreed to purchase and anticipates closing on 132 additional communication sites for another $85.0 million. The company anticipates that these deals will close by the end of 1Q21.