Cellnex to expand existing markets after failed DT tower bid


A telecommunications antenna of Spanish telecommunications infrastructure company Cellnex is seen in Madrid, Spain April 27, 2022. REUTERS/Susana Vera/File Photo

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  • First half core profit up 59%
  • Net loss doubled to 170 million euros

BARCELONA, July 28 (Reuters) – Spain’s Cellnex (CLNX.MC) said on Thursday it would consolidate and expand in its 12 existing European markets after a failed bid on Deutsche Telekom’s towers ( DT) (DTEGn.DE).

Europe’s largest mobile tower operator withdrew a bid for a stake in the DT business earlier this month. The 51% stake was landed by Brookfield and DigitalBridge in a deal valuing the company at 17.5 billion euros ($17.9 billion). Read more

The deal would have allowed Cellnex to enter Germany.

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“Our financial package was super competitive,” chief executive Tobias Martinez told analysts on an earnings call, noting there was no doubt about the return on investment.

“The main issue was the lack of strategic fit and the lack of capacity (handed over to) Cellnex to consolidate and manage the assets, and run the business, which for us is a must,” he said. he adds.

Under the winning bid, DT will continue to run the business and has the right to regain control and reconsolidate it in the future.

Many telecom companies have set up tower companies or launched joint ventures to raise funds, while retaining a stake to benefit from any future growth.

Cellnex raised capital in April 2021 and has given itself 18 months to invest in acquisitions. Martinez said the company would extend that period after failing to complete the deal with DT, but did not give a new deadline.

Cellnex, which has 104,000 cell towers, posted basic profit of €1.28 billion in the first half, up 59% year-on-year, benefiting from its expansion and higher its turnover. The company maintained its 2022 outlook.

However, its net loss doubled to 170 million euros due to higher depreciation and costs from its 2021 acquisitions.

At 09:30 GMT, Cellnex shares were down 3.5%.

For 2022, the company expects adjusted earnings before interest, taxes, depreciation and amortization to increase to 2.65-2.7 billion euros and revenue to 3.46-3.51 billion.

In the first half of the year, revenue increased by 59% to 1.69 billion euros, with its number of masts increasing by 27%.

Its net financial debt in June was 14.3 billion euros compared to 11.9 billion at the end of 2021. Available liquidity is 7.6 billion euros.

($1 = 0.9887 euros)

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Reporting by Joan Faus Additional reporting by Andres Gonzalez and Tiago Brandao Editing by Inti Landauro and Mark Potter

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