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Cellnex’s core earnings grow 63%, says Germany remains a target

Randy Mancini 2 Feb 25
A placard with the logo of SpainÕs telecoms infrastructures firm Cellnex is seen attached to the wall of main telecom tower, known as
FILE PHOTO: A placard with the logo of SpainÕs telecoms infrastructures firm Cellnex is seen attached to the wall of main telecom tower "Torrespana" , known as "Piruli", in Madrid, Spain, March 10, 2016. REUTERS/Sergio Perez

February 25, 2022

By Joan Faus

BARCELONA (Reuters) -Cellnex remains interested in expanding into Germany Europe’s largest mobile phone tower operator said on Friday after it reported a 63% rise in adjusted core earnings in 2021 to 1.92 billion euros ($2.15 billion).

Telecom towers have been the target of several big takeovers in the past few years and Cellnex is vying with U.S.-based American Tower Corp to increase its European footprint ahead of the roll out of 5G.

By 2030, Barcelona-based Cellnex aims to control around 130,000 masts in 12 European countries. It could spend up to 9 billion euros on acquisitions this year.

Chief executive Tobias Martinez said Cellnex would carefully consider a push into Germany – the only big Western European country where it is not present.

“We would love to be in Germany but after six years (existing as a company) and being present in 12 countries this company does not depend on being in Germany.”

His comments came a day after Deutsche Telekom Chief Executive Tim Hoettges, speaking during a news conference after the company’s results, said that the group was ready to deconsolidate its tower business in Germany but had “no time pressure.”

Cellnex reported a 58% surge in revenue in 2021, beating its own target and Refinitiv estimates.

But costs related to its European expansion, an early retirement plan in Spain and a tax hike in Britain meant its net loss widened to 351 million euros from 133 million the previous year.

In 2022, Cellnex expects earnings before interest, taxes, depreciation and amortisation (EBITDA) to grow to between 2.65 billion euros and 2.7 billion euros, while revenues are estimated to reach 3.46 billion euros to 3.51 billion euros.

Cellnex entered Poland in 2021 and built its presence in four other countries. It invested 1.09 billion euros in increasing stakes in companies in France and Poland, fulfilling purchase rights for Iliad and Play.

The company said it is likely to offset the spending with 1.1 billion euros it may raise from antitrust sales required by France and potentially in Britain, where it hopes to get approval in March for a planned 10 billion euro deal to buy towers from Hong Kong’s CK Hutchinson.

It could also sell stakes in its different units to minority shareholders but there have been no advanced conversations on that front, Martinez said.

Given its presence in Poland, Cellnex has contingency plans related to Russia’s invasion of Ukraine, he said.

($1 = 0.8922 euros)

(Reporting by Joan Faus; additional reporting by Nadine Schimroszik in Berlin; editing by Devika Syamnath, Elaine Hardcastle and Jane Merriman)