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Total Play announces 19% growth in EBITDA, to Ps.4,434 million in the first quarter of 2023

—Revenue increased 17%, to Ps.9,826 million in 1Q23, driven by a 20% increase in Total Play Residencial—
—The company will moderate its subscriber base growth which will strengthen its liquidity and capital structure—

Mexico City, April 27, 2023—Total Play Telecomunicaciones, S.A.P.I. de C.V. (“Total Play”), a leading telecommunications company in Mexico, which offers internet access, pay television and telephony services, through one of the largest 100% fiber optic networks in the country, today announced financial results for the first quarter of 2023.

“We will moderate our subscriber base growth starting in the second quarter of the year — which will result in lower levels of investment and a reduction of operating expenses — in order to further strengthen our liquidity and amortize a significant portion of future debt maturities,” commented Eduardo Kuri, CEO of Total Play. “This week we issued Certificados Bursatiles of Ps.1,000 million and we have close to Ps.4,000 million in securitization programs, which are added to the savings due to lower growth, estimated at Ps.11,000 million in three years, and will allow us to comply with a liability reduction program between now and 2025, further boosting the strength of the company's capital structure.”

First quarter results

Revenue for the quarter was Ps.9,826 million, 17% above the Ps.8,416 million from the same period of the previous year. Total costs and expenses were Ps.5,392 million, compared to Ps.4,688 million of the previous year.

As a result, Total Play's EBITDA grew 19%, to Ps.4,434 million, from Ps.3,728 million a year ago; the EBITDA margin for the quarter was 45%, one percentage point above the previous year. The company posted operating income of Ps.592 million, compared to Ps.976 million a year ago.

Total Play reported net income of Ps.317 million, from Ps.477 million in the same period of 2022.

Revenues from services

The company's revenue grew 17%, as a result of a 20% increase in sales from the residential segment and a 3% increase in revenues from the enterprise division.

The growth in revenue of Totalplay Residencial, to Ps.8,274 million, compared to Ps.6,909 million of the previous year, results from an 18% increase in the number of subscribers to the company's services, to 4,403,210, due to higher household demand for Total Play telecommunications services. Average revenue per subscriber for the quarter — ARPU — was Ps.617, compared to Ps.614 a year ago.

The continuous increase in Total Play revenue is reaffirmed this period despite intense competition in the industry — which affects market prices — and the normalization of face-to-face activities throughout the country. This shows the preference of users for the superior attributes of our internet, pay television and telephony services, which optimally satisfy the connectivity and entertainment needs of millions of homes.

During the quarter, the company concluded its investment program to increase geographic coverage, since it reached the territory in which its target market is located throughout the country. The number of homes passed in Mexico was 17.5 million at the end of the period, from 15.4 million a year ago. The fiber optic network currently has 141,129 kilometers, 29% higher than 109,024 kilometers the previous year.

Penetration — the proportion of homes passed by Total Play that have telecommunications services from the company —reached 25% at the end of the quarter, up from 24% a year ago, despite the increase of 2.1 million homes passed in the period.

Revenues from the enterprise segment were Ps.1,553 million, compared to Ps.1,507 million the previous year. The enterprise division provides its services to 50,340 organizations, 9% higher than 46,088 in the same period of 2022.

Costs and expenses

Total costs and expenses grew 15%, as a result of a 7% increase in service costs and a 20% increase in general expenses. The growth in costs, to Ps.2,008 million, from Ps.1,870 million of the previous year, mainly results from the cost of equipment sales, memberships, rental of links and other interconnection services for the operation of the network, partially offset by efficiencies generated by content costs renegotiation.

The increase in expenses, to Ps.3,384 million, from Ps.2,818 million, reflects higher personnel expenses, advertising and promotion, maintenance and operation of the call center, in the context of growing operations in the company, partially offset by economies of scale resulting from a larger subscriber base.

EBITDA and net result

Total Play EBITDA was Ps.4,434 million compared to Ps.3,728 million of the previous year.

Relevant variations below EBITDA were the following:

Increase of Ps.1,090 million in depreciation and amortization, as a result of user acquisition cost — telecommunications equipment, labor and installation expenses — as well as investments in coverage of the fiber optic network.

Growth of Ps.412 million in interest charges, mainly derived from the increase in the balance of financial debt.

Increase of Ps.163 million in other financial expenses as a result of expenses related to debt issuances and financial derivative instruments.

Growth of Ps.1,111 million in foreign exchange gains, as a consequence of the net liability monetary position in foreign currency, together with a greater appreciation of the peso against the basket of currencies in which the company's monetary liabilities are denominated this quarter, in comparison with the previous year.

Total Play reported a net income of Ps.317 million, from Ps.477 million in the same period of 2022.

Balance Sheet

As of March 31, 2023, the company's debt with cost was Ps.48,228 million, compared to Ps.41,275 million the previous year. The growth of the debt balance is related to the issuance of Certificados Busatiles and loans with financial institutions during the period.

The balance of cash and cash equivalents, as well as restricted cash in the trust totaled Ps.4,445 million, 37% higher than Ps.3,237 million a year ago.

The lease liability was Ps.7,077 million, compared to Ps.5,804 million of the previous year.

The company's fixed assets — which include the accumulated investment in fiber optics, telecommunications equipment, and the cost of acquiring subscribers, among other assets — were Ps.59,227 million, 21% above the Ps.48,816 million a year ago.

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