Boston, MA 05/23/2014 (wallstreetpr) – NII Holdings Inc (NASDAQ:NIHD) reported disappointing results with continued loss of customers and negative operating income. The Company continues to withstand the challenges in its operating results that are likely to put pressure on the Company’s liquidity outlook.
Operating Metrics
The declining subscribers have a significant impact on the Company’s operating metrics during its first quarter 2014. The gross adds were up by 12% compared to prior year period due to the improvement in 3G growth especially in Brazil. However, it reported a net loss of 52K subscribers in 1Q2014 that reduced the Company’s subscriber base by 4% year over year to 9.4 million.
As a result, the average churn rate was up by 100 basis points to 3.42% (1Q2013: 2.42%). Additionally, lower average revenue per subscriber (ARPU) in Brazil decreased the Company’s consolidated ARPU to $29 from $39 a year’s ego. Subsequently, the cost per gross add (CPGA) increased by $13 year over year to $290.
Therefore, total revenues were down by 27% year over year to $970 million and generated operating loss of $239 million and net loss of $376 million or $2.19 per basic share.
Strong 3G growth in Brazil improved the overall operating performance to an extent. In addition, positive adjusted OIBDA of $27 million was partially offset the loss incurring from services in Brazil and Mexico. So, consolidated adjusted OIBDA loss was $84 million in 1Q2014.
Lower Cash Generation
The NII Holdings Inc (NASDAQ:NIHD) used more cash in its operation and received $90.4 million from its investing activities including capital expenditures of $118 million during the period.
As of March 31, 2014, NII Holdings ended up with $5.9 billion of total debt and cash balances of $1.7 billion including cash and cash equivalents of $1.3 billion that resulted to net debt of $4.2 billion.
Moving Forward
NII Holdings Inc (NASDAQ:NIHD) primarily focuses on improving its operating results by investing in subscriber growth, in Brazil and stabilizing its operation in Mexico, and balances its capital investments and maintains the liquidity.
