After the Liberty Global results last night (see our take here), we now have the more detailed results from VMO2. With lower than expected FCF guidance, weak on-net subscriber trends, ongoing price competition across the market, cash out for spectrum and ongoing dividend upstreaming, we think the path back to 4-5x leverage could be a challenge. As a result, we remain Underweight on the bonds.
The FT is reporting that VMO2 is selling a further stake in CTIL to an infrastructure fund. The transaction multiple has not been disclosed, but we estimate could be as low as 15x – the lowest in recent years. In this Quick Take we discuss reasons for the discount and implications for VMO2.
After the initial results out from Liberty Global last night, we get more detailed results this morning from VMO2, so we are able to further analyse the disappointing guidance given for VMO2 which implies a higher cost base than previously expected to support the current revenue trajectory. In this note, we dive deeper into the implications of this and what it means for Liberty Global and Telefonica.
After the main set of results from Liberty Global last night, we now get the full set of results from VMO2, which include some encouraging signs in their fixed-line business. In this note, we assess the details, what is still needed in Q4 and also thoughts on their CTIL tower sale and how they keep to 5x leverage this year.
Last night we got the Liberty Global results, which includes a summary of VMO2 results, but this morning we get the fuller information on VMO2, so we are able to do a deeper-diver into their Q2 results, which we analyse here and to what extent future growth rates are still achievable based on the KPI trends reported.
This morning we now get the (more) detailed earnings release from VMO2 which help to give us better insight into the drivers behind their guidance of a £1.8-2.0bn dividend for 2023, which is >50% ahead of consensus - and also ahead of our £1.6bn estimate. We undertake a deeper dive into their results and we show how this should still keep leverage at 4.9x – similar to the end of 2022.
There is a significantly sized private/high yield Telecom universe, of which we already have direct coverage of c.80% and indirect coverage of a further c10%. In this new product, we pull together market data and commentary for this high yield telecom universe (>€155bn of gross debt), leaning specifically on our sector knowledge and expertise to provide context and outlook for all. We also look closely at the European FTTH overbuilder sector, which we believe will see more debt raises in the nea...
Virgin Media’s announcement to upgrade its network to FTTH could be read as drawing a clear line between cable operators sticking with the HFC path, notably Vodafone, and those taking the plunge with an FTTH migration as a move to counter incumbents upgrading their own networks.
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
NEWS SUMMARY: EUSKALTEL. MARKETS YESTERDAY AND TODAY Despite uncertainties surrounding Covid and China, the S&500 hit new record highs European stock markets continued to see moderate gains during the entire session, underpinned by the bullish US opening that hit new record highs and by the good earnings season. In the Euro STOXX, Industrials and Leisure (both linked to airline traffic and tourism) in addition to Insurance and Real Estate led gains vs. the falls of discretionary consumer sec...
COMPAÑÍAS QUE APARECEN EN EL INFORME: ESPAÑA: EUSKALTEL. EUROPA: ALLIANZ, ING GROEP. Incluido en el informe diario de hoy, y durante toda la campaña de resultados, incorporamos al final una presentación con previews de Rdos. 2T’21 que se publicarán en Europa en los próximos días. A pesar de las incertidumbre sobre el Covid y China el S&P 500 marca nuevos máximos Las bolsas europeas mantuvieron ganancias moderadas durante toda la sesión apoyadas en la apertura alcista de EE.UU. que acabo marcan...
Virgin Media – O2 already reported its Q2 results and FTTP announcement earlier today, and Telenet also reported its Q2 results. These represent c.50% of Liberty’s value, which means more focus will now be on the Swiss results, and corporate announcements.
NEWS SUMMARY: BANKING SECTOR, EUSKALTEL, SIEMENS GAMESA. MARKETS YESTERDAY AND TODAY Stock market rally The positive US opening and the expectations about the 2Q’21 earnings season fuelled European stock markets, which ended with gains despite the initial doubts. Within the Euro STOXX, the best-performing sectors were Utilities and Real Estate whereas Travel&Leisure (hit by the increasing number of cases of the delta variant) and Basic Resources where the only sectors not ending with gains. On...
COMPAÑÍAS QUE APARECEN EN EL INFORME: ESPAÑA: EUSKALTEL, SIEMENS GAMESA. EUROPA: SECTOR BANCOS EUROPA Remontada en las bolsas La buena apertura en EE.UU. y las expectativas sobre la campaña de resultados del 2T’21 animaron a las bolsas europeas, que terminaron en ganancias a pesar de un inicio con dudas. En el Euro STOXX los mejores sectores han sido Utilities e Inmobiliario mientras que Viajes&Ocio (perjudicado por el avance de los contagios de la variante delta) y R. Básicos fueron los únicos...
NEWS SUMMARY: EUSKALTEL, FERROVIAL REPSOL. MARKETS YESTERDAY AND TODAY Slight gains with the US closed The session began with losses on the markets, but following the release of the final Services PMI in the euro zone, the indices turned around and ended the session with gains, with peripheral indices (MiB and IBEX) leading the way. The best-performing sectors in the Euro STOXX were Banks and Basic Materials, whereas Pharma and Media were the worst relative performers. On the macro side, in th...
COMPAÑÍAS QUE APARECEN EN EL INFORME: ESPAÑA: EUSKALTEL, FERROVIAL, REPSOL. EUROPA: AIRBUS. De menos a más con EE.UU. cerrado La jornada comenzó con pérdidas, pero tras la publicación de los datos finales de PMI de servicios de la Eurozona, los índices giraron al alza y terminaron la sesión con ganancias, con los periféricos (Mib e Ibex) liderando los avances. Los mejores sectores del Euro STOXX fueron Bancos y Recursos Básicos mientras que Farma y Media terminaron con el peor comportamiento ...
NEWS SUMMARY: ACS, EUSKALTEL, GRUPO CATALANA OCCIDENTE, IBERDROLA, OHL. MARKETS YESTERDAY AND TODAY Stock markets unaffected by the good macro data The European stock markets were unaffected by the good macro data and the slightly bullish US opening, posting generalised losses that exceeded -1% in the case of the Dax or the Ibex. Thus, within the Euro STOXX, all sectors except Food and Basic Resources closed in the red, with Retail and Utilities being the worst relative performers. On the macr...
COMPAÑÍAS QUE APARECEN EN EL INFORME. ESPAÑA: ACS, EUSKALTEL, GRUPO C. OCCIDENTE, IBERDROLA, OHL. Los buenos datos macro no consiguen impulsar las bolsas A pesar de los buenos datos macro y de la apertura de EE.UU. ligeramente alcista, las bolsas europeas no se vieron beneficiadas y cerraron con pérdidas generalizadas, que en el caso del Dax y el Ibex superaron el -1%. Así, en el Euro STOXX todos los sectores menos Alimentación y R. Básicos cerraron en negativo, con Retail y Utilities mostrando...
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