Millicom third-quarter revenues down 6.5% YoY, customer base up 2%

Millicom, owner of Tigo-branded operations across Latin America and Africa, reported a 6.5 percent year on year fall in revenues to USD 1.03 billion in the third quarter of 2020, impacted by the ongoing effects on its business of the Covid-19 pandemic. However, the company was keen to emphasise that the result was an improvement on the 8.0 percent decline posted in the previous quarters as lockdowns eased in most of its countries and the improved performance that began in June continued in the July to September period with robust customer growth. On a year-on-year basis, service revenue declined 3.1 percent organically, improving from a 6.8 percent fall in Q2, with EBITDA down 6.1 percent year on year to USD 581 million. Third-quarter net loss improved to USD 51 million from a negative USD 131 million a year earlier. 

Millicom CEO Mauricio Ramos stressed the company’s record levels of customer additions in the prepaid mobile and residential cable businesses, driven in part by the reconnection of customers who had temporarily benefited from lifeline services. He said Millicom remained confident of achieving its revised 2020 target of generating about USD 1.4 billion of OCF after reducing its net debt by around USD 240 million since the end of March.

In its main market of Latin America, Millicom said service revenues declined 3.7 percent year on year to USD 1.45 billion due to the impact of the pandemic and weaker FX rates, partially offset by contributions from its acquisition of Cable Onda in Panama. Organic service revenue growth for the quarter was negative in every country except Guatemala, where it grew 3.9 percent. The most affected countries were Bolivia (-10.6%), Panama (-9.4%) and Honduras (-6.0%), while Colombia (-0.2%), and El Salvador (-2.6%) performed relatively better.

In terms of customers, Millicom’s mobile base increased 2.3 percent year on year to 39.48 million in Latin America, aided by recent acquisitions in Panama and Nicaragua. Total 4G customers were up 20.6 percent year on year to 16.3 million, although postpaid subscribers fell 4.9 percent year on year to 4.77 million. Mobile ARPU declined 4.9 percent year on year to USD 6.8 due to Covid-19 impact and foreign currency impact in Colombia and Paraguay above all.

Total homes passed by Millicom’s HFC network climbed another 4.0 percent year on year to 12.11 million, with HFC revenue generating units rising 8.4 percent year on year to 7.34 million.