Millicom (TIGO) Q3 2024 earnings summary

Executive summary

• Record Q3 equity free cash flow of $271m, more than double year over year, supported by cost reductions and lower cash CapEx.

• Service revenue reached $1,344m, up 1.8% reported and 2.4% organically; EBITDA rose 9.8% to $585m.

• Strong commercial activity: 299k postpaid mobile and 68k home net additions, the strongest since 2021.

Financial highlights

• EBITDA margin improved to 40.9% from 37.4% in Q3 2023; operating profit increased 43.1% to $300m.

• Net debt fell $245m in the quarter to $5,405m; leverage declined to 2.59x from 2.77x in Q2.

• Operating cash flow increased 18.6% to $419m; cash CapEx was $125m, down $78m year over year.

• 9M revenue was $4.376B and EBITDA was $1.851B; net profit was $217m versus an $88m loss a year earlier.

Outlook and guidance

• 2024 equity free cash flow target raised to $650m from more than $600m; year-end leverage expected near 2.5x, excluding tower-sale proceeds.

• 2024 CapEx expected below $700m, with a similar percentage of revenue planned for 2025; Q4 expected to be the strongest quarter for equity free cash flow.

• Costa Rica operations merger with Liberty Latin America expected to close in H2 2025, subject to approvals; retained ownership would be ~14%.

• Proposed Colombia combination involving Coltel and TigoUne implies potential investment of ~$1B, subject to definitive agreements and regulatory approvals.