Clear Channel Outdoor Holdings Inc. reported second-quarter financial results on August 5 that demonstrated operational momentum across its advertising segments even as the company approaches privatization. The pending acquisition by an investor consortium advised by Mubadala Capital at $2.43 per share was approved by stockholders on May 12 and is expected to close by the end of the third quarter.
Consolidated revenue rose 8.7% in the second quarter to $438.0 million, with first-half revenue climbing 10.2% to $811.9 million. The company attributed gains partly to advertising spending related to the FIFA World Cup across both operating divisions. The America segment, encompassing billboard and street furniture operations, generated $324.3 million in quarterly revenue, a 7% increase, bolstered by technology advertiser demand in the San Francisco Bay Area and digital billboard revenue that grew 7.2% to $122 million. The Airports segment reported stronger performance with revenue jumping 14% to $113.6 million, driven by activity at San Francisco International Airport and digital sales climbing 15.6% to $73.4 million, with national advertisers representing 57.8% of segment revenue.
Profitability metrics expanded at a faster pace than revenues. Adjusted EBITDA increased 11.6% to $143.4 million in the quarter and 19% to $247.3 million for the first half, while Airports Segment Adjusted EBITDA jumped 22.8% to $29.9 million. Adjusted Funds From Operations surged 61.6% to $44.9 million in the quarter and reached $51.5 million for the half-year compared to $5 million a year prior. The company also completed the sale of its Spain business for approximately $132.3 million in early August, with proceeds directed toward debt reduction.
Despite operational improvements, reported earnings remained negative. Clear Channel posted a $10 million loss from continuing operations in the quarter, reversing a $6.3 million profit from the prior year, while consolidated net loss totaled $5 million versus $10.6 million net income a year earlier. Operating costs increased 5.9% during the quarter, with Airports site lease expenses jumping 12.0% to $67.1 million due to higher minimum guaranteed payments and contract renewals. Corporate expenses climbed 17.5% to $36.6 million. Net interest expense remained substantial at $99 million for the quarter, with total debt standing at $5.1 billion against a stockholders’ deficit of $3.5 billion. The company anticipates paying approximately $197 million in interest during the second half of the year and roughly $394 million in the following year.
Market sentiment indicators reflected uncertainty around deal completion rather than fundamental operations. Hedge fund ownership of Clear Channel declined from 47 funds to 34 between consecutive quarters, while short interest remained at 9.58% of float. The company skipped its customary earnings call and provided no forward guidance due to the pending merger.
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