Millicom maintains FY outlook, Q3 sales up 7.6%

Latin America and Africa operator Millicom reported third-quarter revenues up 7.6 percent to USD 1.29 billion, while EBITDA fell to USD 459 million from USD 507 million a year earlier. The company said sales growth was slowed by regulatory effects, while USD 10.8 million in one-time charges, mainly for taxes in Africa, affected EBITDA. Millicom also increased sales and marketing spend to grow new services such as mobile data and payments. 

The mobile activities grew sales in local currency by 3.3 percent, revenues from mobile financial services nearly doubled, and the cable activities grew by 11.5 percent. The operator, which uses the brand Tigo, added 1.01 million mobile customers in the three months, for a total 9.021 million at the end of September, while ARPU was stable compared to the previous quarter at USD 7.9. The proportion of customers using data services increased to 18.4 percent, with over 1 million new users in Q3 thanks to higher subsidies on smartphones. Just over 11 percent of the mobile customers were using Tigo's financial services at the end of the period, led by a penetration of 43.3 percent of the Tanzania customer base. 

Millicom maintained its outlook for an adjusted EBITDA margin around 40 percent this year, versus 39.6 percent in the first nine months. Losses from its online division will also be less than expected, due to lower sales there. Capex is still expected at around 20 percent of revenues, after spending USD 662 million in the first nine months of 2013.