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01/10 16:01
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Revenue $1.1 billion in Q3, reflecting a return to year-over-year growth driven by better trends in B2B, improved enterprise and government-related contracts, and easing of tough year-over-year comparisons.
Adjusted OIBDA $433 million, showing a rebased year-over-year growth of 7%, driven by cost initiatives and strong customer base management.
Adjusted OIBDA less P&E additions 22% year-over-year expansion, leading to a margin of 26%, attributed to lower capital intensity and adjusted OIBDA growth.
Liberty Caribbean Revenue $369 million in Q3, with 3% year-over-year rebased growth, supported by FMC growth, price increases, and recovery from storm impacts in Q3 2024.
Liberty Caribbean Adjusted OIBDA $173 million, representing 10% rebased growth year-over-year, driven by lower operating costs and efficiency programs.
Cable & Wireless Panama Revenue $199 million, with 6% year-over-year rebased growth, driven by a 14% increase in B2B revenue.
Cable & Wireless Panama Adjusted OIBDA $72 million, reflecting 4% year-over-year rebased growth, supported by lower network and labor costs.
Liberty Networks Revenue $117 million, with a 6% year-over-year rebased growth, driven by subsea capacity revenue and managed services growth.
Liberty Networks Adjusted OIBDA $65 million, reflecting 10% year-over-year rebased growth, supported by revenue increases and lower bad debt.
Liberty Puerto Rico Revenue $298 million, with a 5% year-over-year rebased decline, primarily due to subscriber losses from mobile network migration.
Liberty Puerto Rico Adjusted OIBDA $96 million, showing 7% year-over-year rebased growth, driven by cost reduction plans and lower bad debt expenses.
Liberty Costa Rica Revenue $155 million, with a 3% year-over-year rebased growth, driven by higher postpaid volumes and strong equipment sales.
Liberty Costa Rica Adjusted OIBDA $56 million, reflecting 7% year-over-year rebased growth, supported by cost control measures.
5G Launch in Barbados: Introduced 5G services in Barbados, marking the second market in the Liberty Caribbean segment to offer 5G.
Satellite Partnership with Starlink: Launched emergency Direct to Cell connectivity in Jamaica during Hurricane Melissa, aiding over 140,000 users.
MAYA-1.2 Subsea Cable Upgrade: Enhanced subsea cable system, doubling capacity and strengthening regional connectivity.
Standalone 5G Network in Costa Rica: Acquired 5G spectrum and partnered with Ericsson to deploy a standalone 5G network.
Postpaid Subscriber Growth: Added over 100,000 postpaid subscribers across the group, the strongest quarter in 3 years.
B2B Revenue Growth in Panama: Achieved 14% year-over-year growth in B2B revenue, driven by government and enterprise contracts.
Costa Rica Mobile Expansion: Postpaid mobile segment grew by 13% year-to-date, supported by prepaid to postpaid migration.
Adjusted OIBDA Growth: Reported $433 million in adjusted OIBDA, a 7% year-over-year growth.
Cost Efficiency Initiatives: Implemented cost-saving measures, leading to a 22% year-over-year expansion in adjusted OIBDA less P&E additions.
Parametric Insurance Utilization: Activated parametric insurance for Hurricane Melissa, expecting $81 million in payouts to aid recovery.
Shareholder Value Focus: Emphasized organic growth, cash flow generation, and strategic initiatives to address stock price undervaluation.
Regulatory Appeal in Costa Rica: Filed an appeal against the regulator's decision to block the transaction with Millicom.
Hurricane Melissa Impact: Significant damage in Jamaica, with adverse impacts to revenue, adjusted OIBDA, and customer base in Q4. Recovery efforts are ongoing, but the situation is dynamic and dependent on power restoration. The company anticipates financial and operational challenges in the short term.
Regulatory Hurdles in Costa Rica: The regulator in Costa Rica, Sutel, has prohibited the proposed transaction with Millicom. This unexpected decision creates uncertainty and may lead to cost-saving measures that could impact operations.
Puerto Rico Revenue Decline: Liberty Puerto Rico experienced a 5% year-over-year revenue decline, driven by subscriber losses and competitive pressures. This has necessitated cost reduction measures to stabilize operations.
Cash Flow Challenges: The company faced cash flow challenges in Q3 due to delayed collections from government customers and the absence of prior year benefits like handset monetization and weather derivative payouts. This could impact liquidity if not resolved.
Competitive Pressures: Competitive tensions in markets like Costa Rica and Puerto Rico are impacting subscriber growth and revenue, particularly in the mobile and broadband segments.
Economic and Operational Risks in Jamaica: The economic hub of Kingston was less impacted by Hurricane Melissa, but the broader economic and operational risks in Jamaica remain significant due to the storm's aftermath.
Debt and Leverage Concerns: The company has a high net leverage of 4.6x, with Puerto Rico contributing significantly to this. Liquidity concerns are partially mitigated by recent financing, but the situation remains precarious.
Revenue Expectations: The company anticipates robust free cash flow performance in Q4 2025, despite the impact of Hurricane Melissa, which is expected to be mitigated by proceeds from the parametric insurance program. Sequentially, revenue increased by 2% in Q3 2025, setting momentum into Q4.
Margin Projections: Adjusted OIBDA margin improved nearly 300 basis points year-over-year in Liberty Caribbean, reaching 47%. The company expects continued adjusted OIBDA expansion into Q4 2025, supported by cost reduction and efficiency programs.
Capital Expenditures: The company is focused on lowering capital intensity, with P&E additions at 13% of revenue in Q3 2025. Investments include the deployment of a standalone 5G mobile network in Costa Rica and the installation of the Manta subsea cable system.
Market Trends: The company is seeing strong demand for bandwidth and IT services in the region, particularly in Colombia and the Dominican Republic. The launch of the MAYA-1.2 subsea cable system and the upcoming Manta cable system are expected to strengthen regional connectivity and digital resilience.
Business Segment Performance: Liberty Caribbean reported strong postpaid mobile additions and a 10% year-over-year rebased growth in adjusted OIBDA. Liberty Costa Rica plans to strengthen its mobile leadership with the deployment of a standalone 5G network. Liberty Puerto Rico is focusing on fixed mobile convergence to drive growth into 2026.
Share Price and Value: Today, and despite some recovery through this year, we continue to believe our share price does not fully reflect the intrinsic value of our underlying businesses. We remain focused on delivering organic growth and cash flow generation, which we believe is critical for share price appreciation. Additionally, as previously discussed, we continue to look across our array of assets in the group and evaluate opportunities to close the embedded discount in our stock price.
Capital Allocation and Shareholder Value: And finally, we at LLA remain focused on improving value for our shareholders as we fundamentally believe the share price doesn't reflect the value of our businesses. We are focused on organically growing the business, pursuing strategic initiatives and optimizing capital allocation. These 3 components will be helpful in unlocking incremental shareholder value.
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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