Crown Castle International Corp. (NYSE: CCI)

Crown Castle sets share growth target for 2020

18 May 2020 | Melanie Mingas

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Crown Castle International Corp. (NYSE: CCI) has set a dividend per share growth target of 7% to 8% for the coming year in its Q1 financial results.

During the quarter, Crown Castle paid common stock dividends of approximately US$513 million in the aggregate, or $1.20 per common share, an increase of approximately 7% on a per share basis, year on year.

While the impact of Covid-19 on the industry and global markets cannot be ignored, the US-based communications infrastructure provider and investment trust set a dividend per share growth target of 7% to 8% for the coming year.

Looking ahead, CEO Jay Brown (pictured) said this positioned the company to “generate attractive growth in cash flows and dividends per share for full year 2020”.

“Our business continues to perform well during this period of unprecedented uncertainty with Covid-19, and we are focused on taking the appropriate steps to deliver on our long-term annual dividend per share growth target of 7% to 8%. To this end, we have prioritised the health and safety of our workforce, while continuing to deliver critical infrastructure for our customers and the communities in which we operate.

“I'd like to thank our team for quickly adjusting to a new operating environment and prioritising the needs of our customers. Although Covid-19 has the potential to create challenges in the near term, we remain confident our long-term contracted revenues will allow us to deliver value to shareholders through a high quality and growing dividend,” he added.

Over recent months, Covid-19 has caused a number of financial issues for the telecoms industry, while in tech it has been reported that as many as 55% of CEOs failed to prepare for the  economic downturn a pandemic brings.

Samsung and Apple  are among those that have issued profit warnings or lower than expected financial results.

However, quarter on quarter, Crown Castle saw site revenues increase by approximately 5.5%, or $68 million, , inclusive of approximately $71 million in organic contribution to site rental revenues and a $3 million decrease in straight-lined revenues.

The $71 million in organic contribution to site rental revenues represented around 5.8% growth, comprised of approximately 9.9% growth from new leasing activity and contracted tenant escalations, net of approximately 4.1% from tenant non-renewals.

Over the quarter Crown Castle, which has more than 40,000 cell towers and approximately 70,000 route miles of fibre, spent $13 million on discretionary land purchases $21 million sustaining capital expenditures and $413 million on discretionary capital expenditures, comprised of approximately $319 million attributable to fibre and approximately $87 million to towers.

“The performance of our business during this period of significant disruption highlights the durability in the demand for our critical communications infrastructure and the strength of our strategy,” stated Dan Schlanger, Crown Castle CFO.

“We took steps to further improve our strong balance sheet position by opportunistically accessing the bond market in April to repay existing borrowings under our revolving credit facility. With an undrawn $5 billion revolving credit facility combined with our investment grade balance sheet and no debt maturities this year, we are well positioned to continue to navigate the current environment while investing in new assets that we believe will add to long-term growth in dividends per share,” he added.