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01/11 03:24
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary presents a positive outlook with strong B2B growth, optimistic guidance for the Home business recovery, and expanding customer bases in key markets like Colombia and Guatemala. The interim dividend announcement further boosts investor confidence. Despite litigation and tax issues, management's strategic focus on efficiency, market expansion, and leverage control is reassuring. The Q&A section did not reveal significant negative trends, and the market cap suggests a moderate reaction. Overall, these factors indicate a likely positive stock price movement in the short term.
Service Revenue $1.34 billion, representing a year-over-year decline of 0.5%. The decline was due to the application of IAS 21 for Bolivia, which negatively impacted service revenues by $74 million compared to last year. Excluding the FX impact, underlying service revenue growth accelerated to 3.5% year-over-year.
Adjusted EBITDA $695 million, an all-time high with a margin of 48.9%. This represents a 23.8% year-over-year increase, influenced by one-time restructuring and M&A charges in 2024. Normalized growth was 10% year-over-year.
Equity Free Cash Flow $243 million for the quarter, totaling $638 million over the last 9 months, marking an 18.1% year-over-year increase. The growth was driven by increased profitability and lower finance charges, offset by higher cash CapEx and litigation settlements.
Mobile Service Revenue Up 5.5% year-over-year, driven by ARPU expansion in prepaid and migration from prepaid to postpaid. Postpaid base grew 14%, reaching 8.9 million customers.
Home Service Revenue Flat year-over-year, a marked improvement from a nearly 5% decline a year ago. Supported by a convergence strategy bundling multiple services under one plan.
B2B Service Revenue $231 million, up 5.3% year-over-year in constant currency. Growth driven by a 10% increase in small business clients and a 35% year-over-year growth in digital services like cloud, cybersecurity, and SD-WAN.
Colombia Service Revenue $364 million, up 6.5% year-over-year. Growth driven by an expanding postpaid customer base, robust B2B performance, and a turnaround in the home business.
Guatemala Service Revenue $366 million, up 3.6% year-over-year. Growth driven by effective customer base management and ARPU increases through prepaid to postpaid migration.
Panama Service Revenue $170 million, flat year-over-year. Gains in postpaid subscribers were offset by a decline in B2B revenue from earlier government contracts.
Paraguay Service Revenue $143 million, up 3.5% year-over-year. Growth achieved through expansion in both prepaid and postpaid customer bases and stable ARPUs.
Bolivia Service Revenue $84 million, up 6.1% year-over-year in constant currency. Growth reflects currency stabilization and increased service revenue.
Adjusted EBITDA Margin in Guatemala 56.6%, up 147 basis points year-over-year, driven by service revenue growth and operational efficiencies.
Adjusted EBITDA Margin in Colombia $161 million, up 17.3% year-over-year. Growth driven by top-line growth and disciplined OpEx management.
Adjusted EBITDA Margin in Panama 52.2%, up 480 basis points year-over-year, driven by cost savings from efficiency programs.
Adjusted EBITDA Margin in Paraguay 51.4%, up 11.8% year-over-year, reflecting operational discipline and customer base growth.
Adjusted EBITDA Margin in Bolivia 49.7%, up 649 basis points year-over-year, driven by cost efficiencies and dedollarization efforts.
Mobile Service Revenue: Strongest organic growth since 2021, up 5.5% year-over-year, driven by ARPU expansion in prepaid and migration from prepaid to postpaid.
Home Business: Added 60,000 new customers, up 5.4% year-over-year. Revenue was flat year-over-year but improved from a 5% decline a year ago.
B2B Segment: Service revenue reached $231 million, up 5.3% year-on-year. Digital services revenue rose 10%, led by cloud, cybersecurity, and SD-WAN growing around 35% year-over-year.
Acquisitions of Uruguay and Ecuador: Broadened footprint to 11 countries. Uruguay adds $246 million in annual revenues and $93 million in adjusted EBITDA. Ecuador adds $490 million in revenues and $161 million in adjusted EBITDA.
Colombia Market: Service revenue grew 6.5% year-over-year, driven by postpaid growth, B2B performance, and a turnaround in the home business.
Guatemala Market: Postpaid customers grew 20%, driving mobile service revenues up 4.6%. Operating cash flow grew 22% year-on-year.
Panama Market: Postpaid customers grew 15%, supporting 7.1% mobile service revenue growth. Achieved record EBITDA margin of 52.2%.
Adjusted EBITDA: Reached $695 million, with a record 48.9% margin, reflecting operational efficiency and cost discipline.
Equity Free Cash Flow: Achieved $243 million for the quarter, on track to meet the $750 million target for 2025.
Leverage: Net leverage reduced to 2.09x, with a target to remain below 2.5x.
Tower Sales: Completed sale of tower companies in El Salvador and Honduras for $975 million, concluding the infrastructure monetization plan.
Costa Rica Legal Matters: Settled litigation with Telefonica related to the 2020 acquisition attempt. Filed an appeal against the regulator's decision to prohibit the proposed combination with Liberty Latin America.
DOJ Investigation: Recorded a $118 million provision for the ongoing investigation, with more details expected soon.
Regulatory Hurdles in Costa Rica: The Costa Rica regulator has prohibited the proposed combination with Liberty Latin America, citing potential competitive effects that could not be mitigated. The company has filed a formal appeal, but this decision creates uncertainty and potential delays in strategic plans.
DOJ Investigation: A $118 million provision was recorded this quarter related to an ongoing DOJ investigation. The financial impact and resolution timeline remain uncertain, posing a risk to financial stability.
Currency Devaluation in Bolivia: The application of IAS 21 for Bolivia negatively impacted service revenues by $74 million this quarter. Although there are signs of stabilization, the currency devaluation remains a risk to revenue and profitability.
Litigation Settlement in Costa Rica: A settlement related to the 2020 acquisition attempt with Telefonica resulted in a financial impact, affecting cash flow and operational focus.
Government Contract Decline in Panama: B2B revenue in Panama declined due to the execution of government contracts earlier in 2024, impacting overall revenue growth in the region.
Integration Risks for Uruguay and Ecuador Acquisitions: The acquisitions of Uruguay and Ecuador bring opportunities but also risks related to integration, achieving synergies, and maintaining operational efficiency.
Equity Free Cash Flow Target: The company remains firmly on track to deliver its $750 million equity free cash flow target for 2025.
Leverage Target: The company is committed to maintaining leverage below 2.5x, even as it integrates acquisitions in Ecuador and Uruguay in Q4 2025.
Home Business Revenue Growth: The company expects positive revenue growth in the home business segment in the next quarter, following a marked improvement from a nearly 5% decline a year ago.
B2B Segment Growth: The B2B segment is scaling profitably, with digital services like cloud, cybersecurity, and SD-WAN expected to continue driving growth, having already grown around 35% year-over-year.
Colombia Business Growth: The company expects continued profitable growth in Colombia, supported by an expanding customer base, robust B2B performance, and a turnaround in the home business.
Panama Business Efficiency: Panama is expected to maintain its position as one of the company's most efficient operations, with a record EBITDA margin of 52.2% achieved in Q3 2025.
Acquisitions in Uruguay and Ecuador: The acquisitions are expected to enhance earnings quality through greater scale and macroeconomic stability, unlocking meaningful synergies and stable cash generation.
Costa Rica Regulatory Appeal: The company has filed a formal appeal against the Costa Rica regulator's decision to prohibit the proposed combination with Liberty Latin America and remains confident in the transaction's benefits.
Colombia Transactions: The company expects the EPM and Telefonica transactions in Colombia to close in the first quarter of 2026.
Dividend Payment: We paid $125 million dividend in line with our approved dividend policy.
Share Repurchase: No mention of a share repurchase program was made in the transcript.
The earnings call summary presents a positive outlook with strong B2B growth, optimistic guidance for the Home business recovery, and expanding customer bases in key markets like Colombia and Guatemala. The interim dividend announcement further boosts investor confidence. Despite litigation and tax issues, management's strategic focus on efficiency, market expansion, and leverage control is reassuring. The Q&A section did not reveal significant negative trends, and the market cap suggests a moderate reaction. Overall, these factors indicate a likely positive stock price movement in the short term.
The earnings call reveals strong financial performance with record high EBITDA margins across regions, driving positive sentiment. Growth in postpaid customer base and revenue, coupled with strategic CapEx allocation and cost control, further supports optimism. Despite some competitive pressures and regulatory uncertainties, the company's focus on ARPU growth and digitalization initiatives is promising. The market cap suggests moderate volatility, but overall, the positive financial metrics and growth strategies indicate a likely stock price increase in the short term.
The company shows strong financial performance with increased EBITDA and improved leverage ratio. Despite some challenges in Bolivia and competitive pressures, guidance is optimistic with expected growth in key markets. Strategic transactions and a share buyback program further bolster confidence. The market cap suggests moderate volatility, hence a positive outlook (2% to 8%) is appropriate.
The earnings call summary reflects strong financial performance with increased equity free cash flow and EBITDA, despite restructuring costs. The leverage ratio improvement and optimistic guidance for 2024 further support a positive outlook. The Q&A section suggests confidence in CapEx management and potential shareholder remuneration once leverage targets are met. Although there are risks like competitive pressure and currency headwinds, the overall sentiment is positive. Given the market cap, the stock price is likely to react positively, within a 2% to 8% range over the next two weeks.
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