Technology , innovation, service and growth in line

Anual Report 2014
Other Operating Results

Corporate Segment and Carriers

2014 was a relevant work for the growth of the Corporate Segment, which consists of the Metrocarrier, MCM, Ho1a and the PCTV business units. At December 31, there was a 78% growth in relation to 2013, which represents 11% of the Company’s total revenues.

The segment is responsible for developing commercial customers, which consists of micro, small and medium-sized companies to corporate carriers, to which we offer transportation, connectivity, equipment and administrative services.

Metrocarrier is the Megacable-division responsible for providing comprehensive telecommunications and technology information-technology services to companies of all sizes. It represents el 7% of the business segment and has technological partners recognized the world over, with whom we have been able to create a first-level network.

Cable Operations Business Segment

The video, internet and telephony services business segment includes services for hotels, hospitals, schools, universities, governments and other users. This segment reflected a growth of 32% compared to 2013 and represents 6% of the Company’s total revenues.

Service Income

Service income represented reached 11.5 million pesos, which represents a growth of 14% over the prior year. This was due to the great acceptance of our internet product, which reflected a significant growth and is the result of the digitalization process. The ARPU per single subscriber reached Ps. 398.3 in 2014, thanks to the increase in subscribers and the additional services contracted by our customers.

Net Income

Net income amounted to Ps. 2,409 million with a margin of 21%. The increase in income reflected a growth of 24% over 2013 due mainly to the excellent operating results achieved by the Company, the benefits of the Reform to the Telecommunications Law and the reduction in the fiscal burden both in current and deferred taxes.

Operating expenses increased by 21% year on year as a result of the growth of our infrastructure, the digitalization process, increased labor and other expenses related to our commercial and operating efforts.

Balance Sheet

The Company’s balance sheet reflects great strength that is evidenced by the on-going improvement in the financial indicators, in which an increase of 39% in current assets can be observed, as well as a 54% growth in the cash and temporary investments account.

Total assets reached 25,223 million pesos at year-end 2014, observing an increase of 14%, mainly as a result of an improved generation of cash. Short-term assets amounted to 2,320 million pesos, a figure 32% above that observed in 2013. This is as a result of an increase in liabilities that mature in less than one year and to the suppliers’ account.

Total liabilities reflected an increase of 10% to close in the amount of 4,946 million pesos. This increase can be explained mainly by the increase in short-term liabilities. The Company’s stockholders’ equity increased year-on-year by 16%, mainly as a result of the cumulative income.

The Company’s financial strength represents a leverage for growth at low risk.

Capital Investments

In 2014, a CAPEX investment was recorded in the amount of 2,336 million pesos, which represents an increase of 17% compared with the prior year. This investment was mainly focused on productive assets to support the increase in subscribers seen throughout the year. Other relevant investments were allocated to the construction of kilometers of the network for the digitalization process and the purchase of terminal equipment for subscribers.

The aforementioned investments are proof of our commitment to have the first-class network that offers diverse services in line with our customers’ needs.

The investments in the technical infrastructure we have made throughout the year have played a very important role for our growth and development and have contradicted and has contributed to us being able to position ourselves as leaders in the telecommunications sector.

Stock Market Performance

At December 31, 2014, Megacable had 1,718 million outstanding shares, 298 outstanding CPOs and 1,710 CPOs held in Treasury.