Millicom International Cellular SA (TIGO) Q3 2024 Earnings Call Highlights: Record Cash Flow ...

GuruFocus News
4 min read

In This Article:

  • Equity Free Cash Flow: Record of $271 million in Q3, more than doubled compared to last year.

  • Service Revenue: $1.34 billion in Q3, up 1.8% year-on-year or 2.4% organically.

  • Mobile Service Revenue Growth: 4.2% increase in Q3.

  • EBITDA: $585 million, up 9.8% year-on-year, including $73 million in restructuring and other one-off charges.

  • Colombia EBITDA Margin: 39%, 6 points higher than last year.

  • Guatemala EBITDA Margin: 55%, one of the highest ever, with EBITDA of $220 million.

  • Panama Service Revenue Growth: 5.8% year-on-year in Q3.

  • Leverage: Reduced to 2.59 times by the end of Q3.

  • Net Debt: Declined by $245 million in Q3, down to $5.4 billion.

  • Guidance for 2024: Increased to around $650 million in equity free cash flow for the full year.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Millicom International Cellular SA (NASDAQ:TIGO) reported a record equity free cash flow of $271 million in Q3 2024, surpassing previous quarters.

  • The company achieved strong customer growth with nearly 300,000 postpaid net additions and 70,000 home net additions, marking the strongest net additions since 2021.

  • Service revenue growth was driven by a 4% increase in the mobile business, supported by prepaid price increases and customer migration from prepaid to postpaid.

  • Millicom's restructuring efforts have led to significant cost reductions and improved operational efficiency, contributing to a leaner and more cash-generative company.

  • The company announced strategic transactions in Colombia, Costa Rica, and a tower transaction in Central America, expected to enhance returns in the coming years.

Negative Points

  • Millicom faced currency headwinds in Colombia and Paraguay, impacting overall financial performance.

  • The company incurred $73 million in restructuring and other one-off charges in Q3 2024, including severance payments and insurance costs.

  • Increased competitive pressure was noted in Guatemala, particularly in regions where Millicom previously had a stronghold.

  • The home business in Colombia experienced a double-digit decline in service revenue, although signs of recovery were noted.

  • Millicom's operations in Bolivia are challenged by a difficult currency situation, leading to conservative capital deployment in the region.

Q & A Highlights

Q: Can you provide an update on the CapEx guidance for 2024 and expectations for 2025? A: Marcelo Benitez, CEO: We are on track to stay below the $700 million CapEx target for 2024. For 2025, we expect to maintain similar levels, focusing on return-based investments and short-term projects. Bart Vanhaeren, CFO, added that the current levels are sustainable and recurring, with potential upsides as cost-saving programs mature.

Recommended Stories