Millicom revenues down 4% in Q4 on forex effects, FY profit up 1.5%

Millicom reported fourth-quarter service revenues down 4.4 percent to USD 1.01 billion, impacted by weaker currencies in a majority of its Latin American markets, the restructuring of its Africa operations, as well as the recent adoption of IFRS 15 accounting standards. However, organic service revenue growth in its main Latin American business was up 3.7 percent in the quarter and 4.3 percent for the full year 2018, compared to 0.9 percent in 2017. The figure beat the company’s 2-4 percent full-year organic growth outlook, thanks above all to a rapid expansion of its residential cable business and surging data consumption.

Millicom’s operating expenses increased by 14.1 percent year-on-year to USD 460 million, largely due to approximately USD 50 million of one-off charges related to the acquisition of Panama’s Cable Onda, as well as its US listing and the restructuring of its Africa operations. Full-year operating profit rose 1.5 percent to USD 655 million, even as one-offs affected the company's Q4 results.

Quarterly EBITDA rose 0.9 percent to USD 524 million, with the company guiding for growth of 4-6 percent over the coming year, including USD 184 million at Cable Onda. Quarterly capex came to USD 346 million, up 3.1 percent year on year, and is expected to come in at USD 1 billion in 2019, including USD 85 million at the Panama unit, with a view to further boosting its residential cable business to 15 million homes-passed and accelerating 4G adoption to 60 percent of customers.

In Latin America, Millicom said it added 406,000 HFC customer relationships in 2018 to end the year with 3.1 million, up 33.2 percent year on year, while total revenue generating units came to 7.9 million, including 6.2 million on HFC networks, up 42.0 percent. It reached 11.0 million homes-passed at the end of December, including its newly-acquired operations in Panama.

At the mobile business, the company ended Q4 with 32.4 million subscribers in LatAm, up 1.6 percent year on year than a year ago, with 4G customers surging 46 percent year on year to 10.1 million. Postpaid customers rose by 7.7 percent year-on-year to 3.2 million, although ARPU dipped 5.2 percent to USD 7.7  mainly due to weaker currencies in some of Millicom’s markets.