The following is a summary of the Uniti Group Inc. (UNIT) Q1 2024 Earnings Call Transcript:
Financial Performance:
Uniti Group's net leverage for the combined company as of the previous year end was 4.8 times, including the incremental $425 million of cash consideration at closing. This may increase a bit during the major part of their fiber-to-the-home build.
A synergy opportunity will enhance cash flows and provide returns to shareholders, with OpEx synergies expected to reach up to $100 million annually within the first three years.
There's an update in Uniti Group's 2024 outlook with an increase in leasing revenue and EBITDA due to high lease-up activity, primarily due to increased hyperscale activity.
Estimated full-year AFFO has been slightly lowered due to higher interest expense with a range between $1.36 and $1.43 per diluted common share.
Plans for an expansion of their ABS financing plan could provide an opportunity to extend beyond the current $350 million ABS loan commitment.
Business Progress:
Uniti Group has announced a merger with Windstream, aiming to create a significant fiber provider in the US, serving over 1.1 million customers.
Uniti will suspend its common dividend for considerable internal uses of capital but may reinstate it in the future if this proves appropriate.
The company has ambitious growth plans inclusive of an acceleration of home fiber deployments, synergies from the merger, and potential expansion of home fiber builds by up to one million additional households.
Uniti Group plans to continue its substantial investment in its fiber business combined with Windstream wholesale, expecting capital intensity to drop due to network overlap with Windstream wholesale.
The merger is expected to close in the second half of 2025, subject to necessary approvals.
The company also plans to extend its fiber-to-the-home build, continue investing in Uniti Fiber and leasing businesses, pursue M&A opportunities, and expand the ABS program using Kinetic assets.
More details: Uniti Group Inc IR
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