SBA Communications Corporation (NASDAQ: SBAC) last night reported results for the quarter ended December 31, 2023. Brendan Cavanagh, President and Chief Executive Officer said the company ended the year with some momentum and had exceeded several metrics.
Highlights of the fourth quarter include:
- Net income of $109.5 million or $1.01 per share
- AFFO per share of $3.37, representing an 8.0 percent growth over the prior year period
- Issued a new senior secured Term Loan B and increased and extended the maturity of the senior secured revolving credit facility subsequent to quarter end
In addition, the company announced yesterday that its Board of Directors has declared a quarterly cash dividend of $0.98 per share of the Company’s Class A Common Stock, an increase of approximately 15 percent over the dividend paid in the fourth quarter. The distribution is payable March 28, 2024 to the shareholders of record at the close of business on March 14, 2024.
“We had a strong finish to 2023, exceeding our outlook for Site Leasing Revenue, Tower Cash Flow, Adjusted EBITDA and AFFO,” Cavanagh said. “While domestic carrier activity was at a low level by historical standards during 2023, a significant percentage of our sites still require 5G related upgrades, and with the growing success of products such as Fixed Wireless Access, the demand for improved speeds, lower latency and greater network capacity continues to advance. This dynamic bodes well for solid organic leasing growth on our U.S. assets for years to come. Internationally, we continued to experience strong demand for our towers across many of our markets and have become a trusted partner to our international carrier customers.”
The company reported total revenues in the fourth quarter of 2023 were $675.1 million compared to $686.1 million in the prior year period, a decrease of 1.6 percent. Site leasing revenue in the fourth quarter of 2023 of $636.1 million was comprised of domestic site leasing revenue of $466.6 million and international site leasing revenue of $169.5 million. Domestic cash site leasing revenue in the fourth quarter of 2023 was $460.9 million compared to $443.0 million in the prior year period, an increase of 4.0 percent. International cash site leasing revenue in the fourth quarter of 2023 was $171.4 million compared to $157.5 million in the prior year period, an increase of 8.8 percent, or 6.2 percent on a constant currency basis. Site development revenues in the fourth quarter of 2023 were $39.0 million compared to $76.5 million in the prior year period, a decrease of 49.1 percent.
Site leasing operating profit in the fourth quarter of 2023 was $516.8 million, an increase of 4.5 percent over the prior year period. Site leasing contributed 97.4 percent of the Company’s total operating profit in the fourth quarter of 2023.
Domestic site leasing segment operating profit in the fourth quarter of 2023 was $399.0 million, an increase of 3.2 percent over the prior year period. International site leasing segment operating profit in the fourth quarter of 2023 was $117.8 million, an increase of 9.3 percent from the prior year period.
Tower Cash Flow in the fourth quarter of 2023 of $512.2 million was comprised of Domestic Tower Cash Flow of $392.0 million and International Tower Cash Flow of $120.2 million. Domestic Tower Cash Flow in the fourth quarter of 2023 increased 4.1 percent over the prior year period and International Tower Cash Flow increased 10.0 percent over the prior year period, or 6.9 percent on a constant currency basis. Tower Cash Flow Margin was 81.0 percent in the fourth quarter of 2023, as compared to 80.9 percent for the prior year period.
“2023 was a year marked by higher interest rates than we have seen throughout much of our history,” Cavanagh said. “As a result, we directed a significant portion of our allocable capital into reducing some of our highest cost debt, and we ended the year with a net debt to Adjusted EBITDA leverage ratio of 6.3x, the lowest level in decades. Notwithstanding the higher cost of borrowing and the slower pace of organic leasing activity, we still produced fourth quarter AFFO/share growth of 8.0 percent over the fourth quarter of 2022. Our business remains steady, and we continue to produce significant free cash flow. As a result, today we announced an increase in our quarterly dividend of 15 percent. While a sizeable increase, this dividend on an annual basis represents less than 30 percent of our AFFO in our 2024 Outlook, meaning that we still have significant capital available for potential portfolio growth and stock repurchases. The strength and quality of our core business gives me great confidence about our prospects to create increased value for our shareholders for years into the future.”
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