Earnings call transcript: Unidentified Telecom Co. sees Q3 2024 profits surge

The unidentified telecommunications company reported robust financial results for Q3 2024, with significant increases in profitability and subscriber growth. The company declared a dividend of 3.6¢ per share, marking the highest since its merger. According to InvestingPro data, the company currently has a market capitalization of $22.63 million, with analysts maintaining a Strong Buy consensus. This performance underscores the company’s successful integration efforts and competitive positioning in the market.

Key Takeaways

• EBIT and Profit After Tax grew by 186% quarter-over-quarter.
• Declared a 3.6¢ per share dividend, the highest since the merger.
• Achieved 70% network integration, aiming for 75% by year-end.
• Opened 13 new branded retail stores with a target of 50 by year-end.
• Added over 300,000 postpaid subscribers year-on-year.

Company Performance

The company’s Q3 2024 performance highlights a recovery and growth trajectory. With a 186% increase in EBIT and Profit After Tax from the previous quarter, the company shows improving metrics despite an EBITDA of -$19.24 million in the last twelve months. The strategic merger has enabled the company to regain market momentum, particularly in subscriber acquisition, surpassing competitors in both mobile and fiber segments. InvestingPro subscribers can access detailed financial health metrics and 12+ additional ProTips about this company’s growth potential.

Financial Highlights

• EBIT and Profit After Tax: 186% increase quarter-over-quarter
• Dividend: 3.6¢ per share, highest since the merger
• Postpaid subscriber growth: Over 300,000 year-on-year

Outlook & Guidance

The company is focused on continuing its network modernization efforts, with a target to complete 75% of the integration by the end of the year. Plans are also in place to expand the number of branded retail stores to 50. With 32 days until the next earnings report on March 13, 2025, and analyst price targets suggesting significant upside potential, the company remains committed to operational excellence and maintaining a sustainable dividend policy. A comprehensive analysis of the company’s growth trajectory is available in the Pro Research Report on InvestingPro.

Executive Commentary

Executives expressed optimism about the company’s growth trajectory. One executive noted, "We’re starting to see growth and traction in our Enterprise Solutions business," highlighting the expanding opportunities in this segment. Another executive emphasized the progress in network integration, stating, "Our network integration is well on track." The commitment to shareholder returns was reiterated with, "We are committed to our dividend policy of delivering a sustainable dividend to all our shareholders."

Risks and Challenges

• Continued integration challenges post-merger could impact operations.
• Market competition remains intense, requiring constant innovation.
• Economic uncertainties may affect consumer spending and demand.
• Regulatory changes in the telecommunications sector could pose risks.
• Maintaining subscriber growth amidst market saturation is a challenge.

The company’s Q3 2024 results reflect its strong competitive position and successful merger integration, setting a positive outlook for future growth and shareholder returns.

Full transcript - Condor Blanco Mines Ltd (CDB) Q3 2024:

Company Executive/CEO: Hi, everyone. I’m pleased to be back here to share with you some highlights of our performance in the recent quarter. For the third quarter of twenty twenty four, I’m pleased to share that we have another strong quarter, both in terms of profitability as well as we’re seeing some recovery in our position in the market. We have continued focus on operational excellence as yielded in the result from both growth in our EBIT, Better Than Expected, as well as in our PAT. Both grew by almost 186%, respectively, quarter over quarter.

We continue to see growth in our key core segments. Our postpaid has grown more than 300,000 year on year. We’re starting to see growth in our mobile and fiber business and regaining momentum on this as we added more subscribers than anyone else in the market. We’re starting to see growth and traction in our Enterprise Solutions business. And we’re starting to see our prepaid business stabilize overcoming the impact of the merger, which we saw some consolidation of the SIM, that has both our customer that has both SOUTHCOM SIM as well as the DG SIM.

So these are all good progress that we are making. And overall, quarter on quarter, we’re seeing that our subscribers now start to grow again. So this is something that’s very, very encouraging for us. And more importantly, we’re starting to realize the benefits, the merger integration that we have been working very hard in the past eighteen to twenty months. Our network integration is well on track.

Now almost 70% complete with the confidence we will hit around three quarters of our network. We will be modernized by the end of the year. Our IT migrated half of our subscribers from the old DG platform to the legacy DG platform to a new billing platform. And we did this in almost no issues across the board. So this is something that we are very proud of, that the team has been working on, is that our partners could achieve this milestone.

Our retail transformation is progressing well. Now 13 fully branded stores with a new brand is opened across the country and we target at least 50 by the year end. And we are starting to see real benefits coming in as all our stores now are cross selling off products, both from the old Salcom legacy product, new old DG legacy products. And what’s more encouraging is we’re starting to see around 20% in terms of increased productivity from these transformed retail outlets. So all these are very, very good indication and our business is progressing very well and the merger is delivering its benefits and expected synergy that we hope for.

As a result, for the third quarter, we are bearing a 3.6¢ per share dividend, which is in a way the highest dividend since the merger. And we are committed to our dividend policy of delivering a sustainable dividend to all our shareholders. So with that, thank you for joining us for this session and we will come back to you again in the next quarter. Thank you.

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