ATN International Swings to Profit on Tower Sale, Cuts Leverage
ATN International reported net income of $167.3 million in the second quarter after a $229.9 million non-cash gain on its US tower sale, even as core revenue growth slowed to 2%.
ATN International (ATNI) reported second-quarter net income attributable to stockholders of $167.3 million, or $10.71 a diluted share, reversing a year-earlier loss of $(7.0) million, or $(0.56) a share. The rural telecom and broadband operator's swing to profit came almost entirely from a $229.9 million non-cash gain tied to the initial closing of its US Tower Portfolio Sale, which pushed operating income to $239.7 million from just $0.2 million a year earlier.
The tower deal, which generated $267.7 million in initial-closing proceeds in line with the roughly $268 million figure the company disclosed when the closing was announced on June 2, also reshaped the balance sheet. Cash and restricted cash nearly tripled to $331.9 million at June 30 from $117.2 million at year-end 2023, while total debt fell to $513.3 million from $565.2 million over the same period. The company's net debt ratio improved to 0.91 times at quarter-end from 2.36 times at December 31, extending a deleveraging trend that began earlier in the year and accelerated sharply once the tower proceeds landed.
Underlying operating performance told a more modest story. Revenue rose 2% year over year to $184.5 million from $181.3 million, a deceleration from the first quarter's 1.6% increase to $182.2 million. Adjusted EBITDA climbed 9% to $49.7 million from $45.8 million, also a step down from the first quarter's 10% growth rate, even as Adjusted EBITDA margin expanded to 27.0% from 25.3% a year earlier, marking a second consecutive quarter of margin gains.
Stripped of the tower-sale gain, operating income improved by roughly $9.6 million, in line with the first quarter's $9.0 million year-over-year gain to $11.7 million. International Telecom segment operating income grew 35% to $21.9 million from $16.2 million, while US Telecom segment operating income swung to $224.2 million from a $(5.5) million loss, a shift that reflects the accounting treatment of the tower gain within that segment rather than a change in its core operations.
Broadband subscriber trends softened. High-speed broadband homes passed grew 21% year over year to 523,400, down from 24% growth in the first quarter, while customer growth slowed to 1% from 3%, with subscriber counts actually declining sequentially to 140,900 from 143,200. Mobile blended churn rose to 3.48% from 2.97% in the first quarter.
Operating cash flow weakened for a second straight period, with net cash from operations for the six months ended June 30 down 11% to $53.5 million from $59.8 million, following a 17% decline in the first quarter alone. The softness was due to timing and working-capital movements tied to the tower transaction. The company also booked $6.3 million in transaction-related charges during the quarter, up from $0.2 million a year earlier, covering costs from the tower sale and a related spectrum license agreement.
ATN reaffirmed full-year 2024 Adjusted EBITDA guidance of $183 million to $193 million, unchanged from the range it set alongside the June 2 tower-sale update but below the $190 million to $200 million range it had guided as of the first quarter, reflecting the dilutive impact of the tower divestiture.
The company raised its quarterly dividend 5.5% to $0.29 a share, paid July 8, and expanded its share repurchase authorization by $15 million to $30 million on July 31 after buying back no stock under the prior $25 million program during the quarter.