Cable Onda (- / Ba1 / BBB-) posted good 2Q and 1H21 results. So, in the first half of the year, Cable Onda's revenue grew to $ 4.3 billion compared to $ 4.2 billion that the company generated for the entire 2020. EBITDA for the first six months increased to $ 1.725 billion, while for the whole of 2020 the figure was at the level of $ 1.654 billion.
We forecast that by the end of the year Cable Onda will be able to increase EBITDA to $ 2.5-2.7 billion. At the end of 2020, the ratio of net debt to EBITDA was 3.5x. The company's debt increased after the purchase of Telefonica assets and some pressure from the consequences of the pandemic. However, in the first six months of this year, the company improved the figure to 3.3x.
We project that Cable Onda will be able to generate $ 800-900 million in free cash flow by the end of the year. We think the company will prefer to channel its cash flows to reduce its debt burden, rather than to pay dividends, which will strengthen its credit profile. By the end of 2021, net leverage could be reduced to 3x, or even slightly lower. We are highlighting the January 2030 Cable Onda Eurobond (USP1926LAA37). The bonds offer a dollar yield of 3.3% with a duration of 7 years.
YTM
3.3%
RISK
- / Baa1 / BBB-
DURATION
7
Cable Onda is a leading provider of mobile services, as well as broadband, pay TV and fixed telephony services in Panama. The company serves both private and corporate clients, as well as government agencies. The company provides corporate clients with Internet services and offers various technological solutions. Cable Onda is the Panamanian market leader in every category of its operations. The company's infrastructure consists of 11,000 km of HFC and 8,000 km of fiber-optic network. At the end of 2020, Cable Onda's subscriber base consisted of 2 million mobile customers and more than 1 million fixed-line customers. Cable Onda is 80% owned by Millicom.