OUTFRONT, like Lamar, revised down revenue guidance on yesterday’s conference call. Here are the results of the OUTFRONT 2Q 2023 earnings release, 2Q 2023 earnings deck and conference call.
- Revenue increased by 4% to $468 million during the second quarter of 2023. The company’s US media billboard yield increased by 5.3% to $2,865 during the second quarter of 2023.
- Adjusted cashflow (OBIDTA) declined by 1.6% to $122 million for the second quarter of 2023 due to high lease and franchise costs. All of the company’s cashflow is currently coming from billboards. The transit business is approximately break even cashflow.
- The company had a weighted average cost of debt of 5.4% at June 30, 2023 with a Debt/Cashflow ratio of 5.3.
- OUTFRONT took a $511 million non-cash impairment charge in the second quarter of 2023 to recognize high transit costs and slow to recover transit ridership and revenues.
OUTFRONT CEO Jeremy Male says the company is negotiating with the MTA over transit fees
…given the current challenges posed by the MTA contracts in particular we are currently engaged in conversations with the MTA and hoping to find a mutually agreeable approach to address the significant changes in the New York City transit environment since the signing of the agreement in 2017.
Male expects modest single digit revenue growth in the third quarter of 2023
As we look at our look at our business in Q3 we’re expecting modest growth in our national billboard business in Q3 we believe our national transit business will be down you know reflecting reflecting that that the strikes that we just talked about and our local business will be you know up in the likelihood low single digit range
OUTFRONT CFO Matt Siegel says there will be fewer acquisitions.
We closed approximately $22 million of tuckin acquisitions in the quarter completing a number of small deals we committed to last year. Given our current pipeline and the activity in the marketplace we will have a much lower volume of deals in 2023 than we completed in 2022 in both quantity and dollar terms this likely continue in 2024.
Billboard Insider’s take: Some real concerns in disappointing transit numbers and a Hollywood riders strike which may impact tv show launch advertising in OUTFRONT’s key markets. OUTFRONT closed the day down 1.6% on a day when the S&P 500 declined 0.25%, Clear Channel Outdoor declined 1.8% and Lamar declined 4.9%.
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