Introduction & Market Context
Empresa Nacional de Telecomunicaciones S.A. (Entel) presented its first quarter 2025 results on May 6, revealing revenue growth of 8.7% year-over-year despite missing analyst expectations. The Chilean telecommunications company reported mixed results, with improved cash flow management but pressure on margins due to restructuring costs. Following the earnings announcement, Entel’s stock declined by 0.6%, reflecting investor concerns over the earnings miss.
The company currently trades at CLP 2,700, up 0.5% since the earnings release, but still below its 52-week high of CLP 3,198. According to available data, Entel maintains a relatively low price volatility with a beta of 0.2, potentially appealing to stability-focused investors despite recent performance challenges.
Quarterly Performance Highlights
Entel reported consolidated revenues of CLP $725 billion, representing an 8.7% increase compared to the same period last year. However, this fell short of the CLP $722.39 billion analysts had forecast. The company’s EBITDA reached CLP $194 billion, growing 3.1% year-over-year, with an EBITDA margin of 26.7%.
As shown in the following consolidated financial metrics chart, Entel’s EBIT declined 2.1% to CLP $51 billion, while net income remained stable at CLP $23 billion:
The company noted that excluding one-time costs, EBITDA would have grown 11.0% year-over-year with a margin of 28.5%, while EBIT would have increased by 26.6%. This indicates that restructuring expenses significantly impacted the quarter’s profitability.
The following chart breaks down the components affecting organic EBITDA performance:
Strategic Initiatives
Entel’s management highlighted their ambitious capital expenditure plans for 2025, with a total investment of CLP $618 billion, representing a 29.5% increase from the previous year. This strategic Capex plan focuses on expanding mobile networks and fiber infrastructure in both Chile and Peru.
The detailed breakdown of the investment plan is illustrated in this comprehensive chart:
The company successfully completed a satellite SMS test through Starlink D2C in February 2025, with deployment expected later in the year. Additionally, Entel placed UF 2 million (approximately US$80 million) in bonds in the local market in April 2025, with maturities in 2030 and 2034.
In the ESG arena, Entel reported shutting down its 2G network and migrating to cleaner technologies (4G and 5G), while also launching initiatives to train 350,000 elderly people with digital skills by 2030. The company has reduced its emissions (scope 1 and 2) by 29.3% since 2022.
Detailed Financial Analysis
A significant improvement in Entel’s financial performance was its positive free cash flow from operations, which reached CLP $1,172 million (0.2% of revenues) in Q1 2025, compared to negative CLP $32,082 million (-4.8%) in Q1 2024. This improvement was driven by better working capital management, as shown in the following cash flow breakdown:
The company maintains sound financial indicators with a net financial debt of CLP $1,363 billion and a net financial debt to LTM EBITDA ratio of 1.71x. Entel continues to maintain investment grade credit ratings from all major agencies (S&P:BBB-, Fitch: BBB-, Moody’s: Baa3).
The following chart illustrates Entel’s key financial indicators and credit ratings:
At the Annual Shareholders’ Meeting on April 22, 2025, shareholders approved a final dividend of CLP $179 per share from 2024 profits, resulting in a dividend yield of 6.8%. The company reaffirmed its dividend policy to distribute up to 80% of distributable net profit.
Competitive Industry Position
Entel continues to strengthen its market position in both Chile and Peru, with particular focus on postpaid mobile subscribers and fiber connections. In Chile, the company reported 10,558 thousand mobile users, with postpaid subscribers growing 2.1% year-over-year to 7,957 thousand, while prepaid subscribers declined 14.7% to 2,601 thousand.
The Chilean operation showed strong revenue growth of 8.4% year-over-year to CLP $467 billion, with EBITDA increasing 2.8% to CLP $129 billion. Excluding one-time costs, EBITDA would have grown 13.9% with a margin of 30.7%.
The following chart details Chile’s revenue and profitability performance:
In the fixed-line segment, Entel’s fiber and TV OTT connections in Chile grew impressively by 41.7% year-over-year to 547 thousand, while HFC connections declined 34.6% to 95 thousand. This shift reflects the company’s strategic focus on fiber infrastructure.
The Chilean mobile revenue performance is illustrated in this breakdown:
In Peru, Entel reported continued growth with revenues increasing 6.4% year-over-year, led by mobile services (+6.1%) and strong performance in fixed (+13.2%) and wholesale (+8.6%) segments. The company added 105 thousand net postpaid subscribers in Q1 2025.
The following chart shows Peru’s sustained growth across segments:
Mobile service revenues in Peru continued their positive trend with growth of 3.4% year-over-year:
Forward-Looking Statements
Entel’s management outlined several strategic objectives for the next 4-5 years, focusing on maintaining leadership, gaining scale and profitability, and capturing new opportunities across Chile, Peru, and B2B segments.
CFO Marcelo Versmoues emphasized the company’s commitment to growth and financial stability during the earnings call, stating, "We are increasing our customer base. We added almost 1,000,000 subscribers, almost 9% growth year on year." He also highlighted the strategic importance of maintaining investment grade status.
Despite the positive outlook presented in the slides, investors should note that Entel’s actual EPS of 89.19 significantly missed the forecast of 149.34, according to the earnings report. This discrepancy, along with the revenue miss, likely contributed to the initial negative market reaction.
The company faces ongoing challenges from competitive pressures in both Chile and Peru, as well as potential continued impact from restructuring costs. However, Entel’s focus on expanding its fiber network and strategic partnerships positions it to potentially improve performance in future quarters.
Full presentation:
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