Hawaiian Telcom, which has been a subsidiary of Cincinnati Bell for just over two years, will soon start contributing revenue to another owner.
Cincinnati Bell said today that despite dealing with the COVID-19 pandemic it produced a strong second quarter and that its $2.9 billion sale in March to a subsidiary of Macquarie Infrastructure Partners is expected to close by the first half of 2021. Cincinnati Bell cleared one of the hurdles to that deal in May when 99% of its shareholders approved the transaction. Regulatory approval is still required for the merger in which Cincinnati Bell shareholders will receive $15.50 a share. Shares of Cincinnati Bell closed unchanged today at $15.
“We appreciate our shareholders’ continued support and adoption of the MIP merger agreement,” Cincinnati Bell President and CEO Leigh Fox said in a statement. “Our team has been working closely with MIP, which has made significant progress on all major regulatory filings as we continue working to ensure a successful close in the first half of 2021.”
Cincinnati Bell posted a wider loss of $10.4 million, or loss of 21 cents a share, compared with a loss of $8.1 million, or loss of 16 cents a share. The company had operating income of $24 million in the quarter, excluding a $25 million break-up fee it paid Brookfield Infrastructure for pulling out of its merger agreement with that company so it could accept a better offer from Macquarie.
Revenue fell 4.2% to $380 million from $384.2 million. Hawaiian Telcom contributed $74 million of that revenue.
The Ohio company said fiber-to-the-premise (FTTP) activations — the installation and use of optical fiber from a central point directly to residences, apartment buildings and businesses for high-speed internet access — is now available to 35% of Hawaii, or 176,200 addresses. FTTP internet subscribers in Hawaii increased by 1,000 in the quarter to 57,400.
“Given the uncertainty and volatility surrounding COVID-19, our second quarter results were strong,” Fox said. “Our performance demonstrates the importance of high-speed data connectivity provided by our robust fiber networks. Additionally, the growth in our recurring IT services more than offset volatility in hardware purchasing during this period, driving an impressive 24% increase in adjusted EBITDA year-over-year.” EBITDA refers to earnings before interest, taxes, depreciation, and amortization is added back.
Cincinnati Bell has owned Hawaiian Telcom since July 2018 when it finalized a deal for that company for $650 million in stock and cash.
Hawaiian Telcom, which has about 1,200 employees, has been heavily investing in its fiber-optic network to provide high-speed internet as well as video services through Hawaiian Telcom TV.