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01/10 16:06
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals: positive developments include a completed migration in Puerto Rico, promising 5G trials, and strong growth in C&W Panama and Caribbean. However, declines in Puerto Rico and Liberty Networks, high leverage, and a negative free cash flow are concerning. The Q&A reveals cautious optimism but lacks clarity on EBITDA projections. The market cap suggests moderate volatility. Thus, the stock price is likely to remain stable, with a neutral movement of -2% to 2% over the next two weeks.
Adjusted OIBDA $763 million in the first half, down 12% year-over-year due to declines in Puerto Rico and Liberty Networks, despite growth in C&W Panama and C&W Caribbean.
Revenue $1.1 billion in Q2, reflecting a 1% year-over-year decline on a rebased basis, with positive momentum in C&W Panama, C&W Caribbean, and Costa Rica offset by declines in Puerto Rico and Liberty Networks.
Revenue (C&W Caribbean) $368 million in Q2, reflecting 4% rebase growth, driven by higher ARPUs and year-over-year subscriber growth.
Adjusted OIBDA (C&W Caribbean) $157 million in Q2, representing 8% rebase growth, fueled by revenue growth and cost discipline.
Revenue (C&W Panama) $197 million in Q2, reflecting 9% rebase revenue growth, driven by increased sales activity and broadband.
Adjusted OIBDA (C&W Panama) $65 million in Q2, representing 10% rebase year-on-year growth, driven by revenue growth.
Revenue (Liberty Networks) $119 million in Q2, reflecting a 1% rebase decline, impacted by lower IRU revenue.
Adjusted OIBDA (Liberty Networks) $63 million in Q2, reflecting a 13% rebase decline, due to lower IRU revenue and a bad debt adjustment.
Revenue (Liberty Puerto Rico) $309 million in Q2, reflecting a 12% rebase decline year-over-year, driven by mobile subscriber losses and lower ARPU.
Adjusted OIBDA (Liberty Puerto Rico) $71 million in Q2, reflecting a 48% rebase decline year-over-year, impacted by lower revenues and higher OpEx related to migration.
Revenue (Costa Rica) $147 million in Q2, reflecting 4% rebase revenue growth, driven by mobile revenue.
Adjusted OIBDA (Costa Rica) $53 million in Q2, reflecting 1% rebase growth, impacted by incremental costs related to commercial activity.
P&E Additions $180 million in Q2, or 16% of revenue, compared to $192 million, or 17% of revenue, in Q2 2023.
Adjusted Free Cash Flow Negative $18 million for Q2, down from $31 million in Q2 2023, primarily due to lower adjusted OIBDA.
Total Debt $8.1 billion at the end of Q2, with gross leverage of 5.3 times and net leverage of 4.9 times, a modest increase from Q1.
Stock Repurchase $22 million of stock repurchased in Q2, increasing year-to-date total to $83 million.
Bad Debt $12 million in Q2, driven by billing and collection issues on new systems.
Cash and Availability $600 million of cash and $800 million of availability under revolving credit lines.
Hurricane Beryl Impact Expected revenue and adjusted OIBDA impact of $10 million to $20 million in H2, with additional P&E additions for repairs.
Parametric Weather Derivative Program Expected to receive $44 million of net proceeds in Q3 due to Hurricane Beryl.
Subscriber Growth: Added 62,000 subscribers in total across the group in the first half, with close to 200,000 additions excluding Puerto Rico.
5G Launch: Successfully launched initial 5G service in Costa Rica and Cayman.
Combination with Millicom: Announced combination with Millicom in Costa Rica to improve market structure and drive synergies.
Market Expansion: Acquisition of Dish's Boost subscribers and Spectrum in Puerto Rico, expected to close in Q3.
5G Market Leadership: First to market with a commercial 5G offering in Costa Rica.
Operational Efficiency: Expect to achieve $45 million in monthly adjusted OIBDA in the second half of 2024.
Cost Reductions: Initiatives started in Q2 expected to drive significant OpEx savings in H2.
M&A Activity: Active in M&A with the acquisition of Tigo's fixed business in Costa Rica and Dish's Boost subscribers.
Equity Repurchase: Repurchased over $300 million of equity and convertible notes, including $22 million in Q2.
Subscriber Migration Challenges: The company faced specific challenges related to the completion of mobile subscriber migration in Puerto Rico, leading to increased churn and subscriber losses.
Hurricane Impact: Hurricane Beryl caused infrastructure damage in Jamaica, Grenada, and St. Vincent, with expected operational and financial impacts ranging from $10 million to $20 million in revenue and adjusted OIBDA.
Regulatory Issues: The sunset of the ECF program in Puerto Rico resulted in a significant reduction in subscribers and revenue, impacting the overall performance.
Bad Debt Write-off: A decision to write off $12 million of bad debt due to billing and collection issues related to the migration process negatively impacted financial performance.
Competitive Pressures: The competitive backdrop in Costa Rica's fixed market remains challenging, prompting the company to pursue a combination with Millicom to enhance market structure and drive synergies.
Operational Disruptions: The migration from AT&T led to operational disruptions, particularly in mapping and billing, affecting subscriber retention and overall performance.
Debt Levels: The company reported a gross leverage of 5.3 times and net leverage of 4.9 times, indicating a modest increase in debt levels.
Subscriber Growth: Added 62,000 subscribers in total across the group in the first half, with close to 200,000 additions excluding Puerto Rico.
Buyback Activity: Repurchased over $300 million of equity and convertible notes, equivalent to total capital allocated during 2023.
Combination with Millicom: Announced combination with Millicom in Costa Rica to improve market structure, drive synergies, and invest in fiber and 5G.
5G Trials: Successful 5G trials during May elections in Panama, showcasing technology leadership.
Acquisition of Dish's Boost Subscribers: Expected closing in Q3, acquiring over 100 Megahertz of Spectrum and over 110,000 Boost subscribers.
Adjusted OIBDA Expectations: Expect adjusted OIBDA to exceed $45 million per month in the second half of 2024.
Revenue Growth Outlook: Anticipate underlying improvements in revenue growth in the second half, particularly in Puerto Rico.
Financial Performance in Puerto Rico: Expect to stabilize mobile subscriber base and generate significant OpEx savings in H2.
Hurricane Beryl Impact: Expect revenue and adjusted OIBDA impact of $10 million to $20 million in H2 due to Hurricane Beryl.
Long-term Growth Confidence: Remain confident in long-term plans and excited about returning to growth in Puerto Rico.
Share Repurchase Program: Liberty Latin America has been aggressive with its buyback activity this year, having repurchased over $300 million of its equity and convertible notes, which is equivalent to the total capital allocated during 2023.
Equity Repurchase: In Q2, the company repurchased $22 million of stock, increasing the year-to-date total to $83 million.
Convertible Notes Redemption: Subsequent to the quarter end, Liberty Latin America purchased and canceled the remaining $140 million of outstanding convertible notes due July 2024.
Future Share Repurchase Strategy: The company entered into a derivative cap call arrangement that allows for the repurchase of upwards of 6 million shares or 3% of LLA in H2 2025 at attractive prices.
The earnings call reveals strong financial performance with growth in revenue and adjusted OIBDA across most segments. The strategic focus on cost-cutting and operational efficiencies is yielding results. The Q&A highlights ongoing cost initiatives and margin expansion, with positive sentiment despite some lack of clarity on cash use priorities. The market cap indicates a small-cap stock, which tends to react more strongly. Overall, the financial health and optimistic outlook suggest a positive stock price movement of 2% to 8% over the next two weeks.
The earnings call presents mixed signals. Strong financial performance in various regions, like the Caribbean and Panama, is counterbalanced by declines in Puerto Rico and Costa Rica. The Q&A reveals management's optimism but lacks specifics on liability management. The market cap suggests moderate volatility. Overall, the sentiment is neutral, with positive growth in some areas offset by challenges in others.
The earnings call summary reveals mixed results: a decline in revenue and adjusted OIBDA, particularly in Puerto Rico, and positive developments in Costa Rica and Panama. The refinancing of debt and increased free cash flow are positive, but the lack of clear guidance and competition concerns in Puerto Rico are negative. The Q&A section highlighted management's focus on cost-cutting and strategic investments, but also showed some reluctance in providing direct answers, adding uncertainty. Considering the market cap and the mixed signals, a neutral stock price movement is expected over the next two weeks.
The earnings call presents mixed signals: positive developments include a completed migration in Puerto Rico, promising 5G trials, and strong growth in C&W Panama and Caribbean. However, declines in Puerto Rico and Liberty Networks, high leverage, and a negative free cash flow are concerning. The Q&A reveals cautious optimism but lacks clarity on EBITDA projections. The market cap suggests moderate volatility. Thus, the stock price is likely to remain stable, with a neutral movement of -2% to 2% over the next two weeks.
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