Millicom reported revenues up 5.1 percent to USD 1.50 billion in the first quarter of 2020, aided by recent acquisitions in Panama (Cable Onda) and Nicaragua (Telefonica) but impacted by weaker foreign currency and the early effects of the coronavirus pandemic. The company said Covi-19 lockdowns adversely affected operational and financial performance in many of its markets beginning in mid-March, and early signs suggested service revenue could be down “between 6 percent and 7 percent organically” in April. As a result, it predicted that operating and financial performance in Q2 and for the full year 2020 would be “materially weaker” than previously expected.
In its main market of Latin America, the company’s first-quarter EBITDA was up 2.3 percent year on year to USD 600 million, with OCF (EBITDA less Capex) for the quarter rising 1.9 percent to USD 427 million. The EBITDA margin declined 1.2 percentage points to 39.9 percent in Q1 compared to 41.2 percent a year earlier.
By country, organic service revenue growth for the quarter was positive in Guatemala (+4.8%), Colombia (+1.2%) and Bolivia (+0.4%) and negative in Panama (-5.2%), Honduras (-2.3%), Paraguay (-1.5%) and El Salvador (-0.9%).
In terms of customers, Millicom’s mobile base increased 16.4 percent year on year to 39.4 million but fell by around 397,000 in the first 3 months of 2020, attributed in part to store closures. The company said it was halting migration of prepaid customers to postpaid plans, a key driver of postpaid growth in recent years, with a view to mitigating future credit risk. Total 4G customers were up 38.3 percent year on year to 14.9 million, aided by the acquisition of mobile businesses in Nicaragua and Panama.
Millicom also added a further 75,000 customer relationships to its HFC network, for a total of 3.53 million at the end of March. However, overall home ARPU fell by 2.7 percent to USD 28.7 due above all to a decline in Colombia caused by the weaker currency.
