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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. 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.
Revenue $2.2 billion in the first half of 2025, with residential revenue up 2% in Liberty Caribbean and Costa Rica and 8% in C&W Panama year-over-year on a rebased basis. The increase was attributed to the launch of new customer value propositions and better momentum in B2B revenue expected in the second half.
Adjusted OIBDA $822 million in the first half of 2025, reflecting a rebased year-over-year growth rate of 8%. This includes double-digit rebased growth in Liberty Caribbean, Panama, and Puerto Rico. The growth was driven by a focus on lowering capital intensity and management's emphasis on profitable growth.
Adjusted OIBDA less P&E additions 23% expansion year-over-year, bringing the margin to 25% of revenue in the first half and 29% excluding Puerto Rico. This reflects strong cash conversion and management's focus on profitable growth.
Mobile Revenue in Liberty Caribbean 6% rebased revenue growth in Q2 year-over-year, supported by prepaid price increases and a larger postpaid subscriber base.
Fixed ARPU in Liberty Caribbean Increased both sequentially and year-over-year, reflecting the benefit of pricing changes.
Mobile Revenue in C&W Panama 6% rebased revenue growth year-over-year, driven by postpaid subscriber growth and stable ARPU.
Fixed ARPU in C&W Panama Declined both sequentially and year-over-year due to retention discounts and lower acquisition ARPU in response to competitors' offers.
Wholesale Revenue in Liberty Networks Declined year-over-year due to the acceleration of noncash IRU revenue in the first half of 2024. However, underlying wholesale revenue grew 8% on a rebased basis year-over-year, driven by new lease capacity sales.
Mobile Revenue in Liberty Costa Rica 5% rebased revenue growth year-over-year, supported by postpaid price increases and a higher proportion of postpaid subscribers.
Fixed ARPU in Liberty Costa Rica Declined both sequentially and year-over-year due to a challenging competitive backdrop and the introduction of a new video proposition.
Revenue in Liberty Puerto Rico $301 million in Q2 2025, representing a 5% year-over-year rebased decline. Residential fixed revenue declined 1%, while mobile residential revenue declined 3% on a rebased basis. The declines were attributed to the discontinuation of the ACP program and a lower postpaid subscriber base post-migration.
Adjusted OIBDA in Liberty Puerto Rico Increased by 21% year-over-year on a rebased basis, reaching $87 million. The improvement was driven by lower bad debt expense, phaseout of integration and TSA costs, and reduced labor costs.
Revenue in Liberty Costa Rica $151 million in Q2 2025, reflecting a 1% rebased revenue growth year-over-year. Mobile residential revenue grew 5%, while fixed revenue declined 3% year-over-year on a rebased basis.
Adjusted OIBDA in Liberty Costa Rica Flat year-over-year on a rebased basis, as revenue gains were offset by higher equipment costs and increased bad debt.
New customer value propositions: Launched new customer value propositions in residential space to sustain momentum.
Liberty Mix: Introduced Liberty Mix, an innovative mobile plan with customizable tiers for postpaid customers in Puerto Rico.
Video proposition in Costa Rica: Revamped video offerings to include popular over-the-top platforms in home plans.
Market expansion in Costa Rica: Maintained #1 mobile operator position and expanded postpaid market share by 2 percentage points year-over-year.
Panama Ministry of Education contract: Awarded a contract to provide high-speed internet to all public schools in Panama.
Project MANTA: Progressing on a new subsea cable system to enhance regional connectivity, expected completion in 2027.
Subscriber growth: Added 70,000 subscribers in the first half of 2025, with significant contributions from Costa Rica, Panama, and Jamaica.
Adjusted OIBDA growth: Achieved 8% rebased year-over-year growth in adjusted OIBDA in the first half of 2025.
Cost efficiency: Focused on lowering capital intensity, achieving a 23% expansion in adjusted OIBDA less P&E additions year-over-year.
Separation of Liberty Puerto Rico: Announced plans to separate Liberty Puerto Rico from the group to unlock shareholder value.
AI adoption: Implemented AI solutions for billing quality assurance and churn prediction in Puerto Rico.
Tigo acquisition in Costa Rica: Working towards regulatory approval for acquiring Tigo's business in Costa Rica, expected to close in early 2026.
Separation of Liberty Puerto Rico: The separation of Liberty Puerto Rico from Liberty Latin America is contingent on establishing a strong and sustainable capital structure. The current capital structure of Liberty Puerto Rico is deemed unsustainable due to high leverage and expected carry costs, posing risks to its long-term success.
Market Competition in Trinidad: Trinidad faces challenges due to the presence of three national fixed players and the lack of a mobile offering, leading to broadband subscriber declines and competitive pressures.
Nationwide Protests in Panama: Nationwide protests in Panama negatively impacted prepaid mobile recharges, affecting revenue during the quarter.
Fixed ARPU Decline in Panama: Fixed ARPU in Panama declined due to retention discounts and lower acquisition ARPU, driven by competitive offers from rivals.
B2B Revenue Decline in Panama: B2B revenue in Panama experienced a 30% year-over-year decline due to a high volume of government project wins in the prior year, creating tough comparisons.
Competitive Backdrop in Costa Rica: The fixed market in Costa Rica remains challenging, with fixed ARPU declining due to competitive pressures and the need to differentiate offerings.
Postpaid Subscriber Losses in Puerto Rico: Postpaid subscriber losses in Puerto Rico, coupled with the discontinuation of the ACP program, led to a decline in fixed revenue and a lower subscriber base.
B2B Revenue Decline in Puerto Rico: B2B revenue in Puerto Rico declined by 18% year-over-year, driven by a reduced mobile subscriber base and ARPU decline.
Capital Expenditures for Project MANTA: Elevated capital expenditures for Project MANTA, a subsea cable system, are impacting cash flow, though it is expected to contribute to long-term profitability.
Debt and Leverage Concerns: Liberty Puerto Rico has a high covenant leverage of 7.9x, and the company is undertaking liability management exercises to address near-term liquidity gaps and stabilize the business.
Separation of Liberty Puerto Rico: The company plans to separate Liberty Puerto Rico from Liberty Latin America (LLA) to unlock shareholder value. This separation is targeted for completion in the first half of 2026 and aims to position Liberty Puerto Rico with a strong and sustainable capital structure post-separation.
Revenue and Adjusted OIBDA Projections: LLA expects stronger revenue delivery in the second half of 2025, particularly in the B2B segment across several geographies. Adjusted OIBDA is projected to grow, supported by cost-out initiatives and operational efficiencies.
Capital Expenditures and Free Cash Flow: The company anticipates lower capital intensity and improved free cash flow performance in the second half of 2025, driven by disciplined capital management and favorable working capital trends.
Project MANTA: The subsea cable system project, in partnership with Sparkle and Gold Data, is on track for completion in 2027. It is expected to establish a solid foundation of monthly recurring revenue and enhance long-term profitability for Liberty Networks.
B2B Revenue Growth: Governments are investing in digitization, security, and cloud computing, which are expected to drive improved B2B revenue performance in the second half of 2025. The company is focusing on ICT growth opportunities, including cloud and cybersecurity solutions.
Residential Revenue Growth: The company expects continued momentum in residential revenue growth in the second half of 2025, supported by new customer value propositions and fixed-mobile convergence strategies.
Tigo Acquisition in Costa Rica: The acquisition of Tigo's business in Costa Rica is expected to close in early 2026, supporting growth in that market and creating synergies.
Liberty Puerto Rico Capital Structure: The company is undertaking a liability management exercise to stabilize Liberty Puerto Rico's capital structure, aiming to address leverage and carry costs. This initiative is expected to set Liberty Puerto Rico up for long-term success.
Potential for recurring dividends: Post separation, LLA expects to have the ability to enhance its capital return strategy, including the potential for not only share repurchases, but recurring dividends, capitalizing on the FCF generation of the LLA assets, excluding Liberty Puerto Rico.
Share repurchase program: Post separation, LLA expects to have the ability to enhance its capital return strategy, including the potential for not only share repurchases, but recurring dividends, capitalizing on the FCF generation of the LLA assets, excluding Liberty Puerto Rico.
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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