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01/11 03:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Equity Free Cash Flow $218 million for the quarter, bringing H1 total to $395 million, $126 million ahead of last year. This was achieved despite adverse foreign exchange impacts and prepayment of $20 million in CapEx originally scheduled for 2026. The increase is attributed to improved working capital management and reduced FX exposure.
Adjusted EBITDA $641 million for the quarter, up 1.1% year-over-year. On an organic basis, it grew 9.3%, reflecting cost optimization and operational efficiency. Adjusted EBITDA margin reached 46.7%, up 3.2 points year-over-year.
Service Revenue $1.28 billion for the quarter, a year-over-year decline of 5.9% due to $110 million in FX headwinds, primarily from Bolivia. Excluding FX impact, organic service revenue growth was 2.4%, driven by mobile postpaid growth and B2B digital services.
Mobile Postpaid Customer Base Grew by 14% year-over-year, reaching nearly 9 million customers. Growth was driven by pre-to-post migrations, network upgrades, and convergence strategies.
Home Business Customers Added 41,000 customers in the quarter, nearly 4x the intake from Q2 last year, representing a 6% year-over-year growth. Broadband customer base grew by 8%, while service revenue improved from -6.1% last year to -1.4% this quarter.
B2B Service Revenue Grew nearly 4% organically, driven by a 16% CAGR in digital services over the past 2 years and a 13% year-over-year increase in mobile B2B.
Colombia Service Revenue $339 million, up 4.9% year-over-year. Growth was fueled by a 15% increase in mobile postpaid customers and a 12% increase in Home business customers. Adjusted EBITDA margin was 39.5%.
Guatemala Service Revenue $358 million, up 1.9% year-over-year. Postpaid customer base expanded by 20%, driving mobile service revenue growth of more than 5%.
Panama Adjusted EBITDA Margin Reached a record high of 51.7%, driven by operational efficiency and a 20% year-over-year growth in the mobile postpaid customer base.
Paraguay Adjusted EBITDA Grew 9.2% year-over-year to $69 million, with an adjusted EBITDA margin of 50.5%, driven by consistent top-line growth and operational leverage.
Bolivia Adjusted EBITDA Increased 16.7% year-over-year to $33 million, with a margin of 45.5%. Growth was driven by top-line acceleration and cost efficiencies, despite challenges from currency devaluation.
Mobile Business: Added nearly 250,000 net postpaid customers, up from 178,000 a year ago. Mobile business grew by mid-single digits, with postpaid growing 14% and reaching near 9 million customers.
Home Business: Added 41,000 Home customers, nearly 4x more than Q2 last year. Broadband customer base grew by 8%, while Pay TV remained flat and fixed telephony declined.
B2B Business: Service revenue grew nearly 4% organically, with a 16% CAGR in digital services over the past 2 years and a 13% year-on-year increase in mobile B2B.
Geographic Expansion: Acquired Telefónica's Uruguay operations, signed a definitive agreement for Telefónica Ecuador, and partially closed an infrastructure transaction with SBA. Expanded footprint in South America.
Country Performance: Colombia: Service revenue grew 5%, driven by a 15% increase in mobile postpaid customers. Guatemala: Postpaid customer base expanded 20%, with mobile service revenue growing over 5%. Panama: Mobile postpaid customer base grew 20%, with mobile service revenues up 4%.
Operational Efficiencies: Adjusted EBITDA reached 46.7%, up 3.2 points year-over-year. More than half of operations achieved margins above 50%. Equity free cash flow for the quarter was $218 million, bringing H1 total to $395 million, $126 million ahead of last year.
Cost Optimization: Disciplined cost management and reduced FX exposure contributed to sustainable EBITDA margins and better equity free cash flow generation.
M&A Activities: Closed the sale of Lati Paraguay and partially closed the SBA Tower deal, generating over $500 million in proceeds. Awaiting regulatory approval for Costa Rica, Uruguay, and Ecuador acquisitions.
Dividend Declaration: Declared a special interim dividend of $2.5 per share, reflecting confidence in capital discipline and shareholder value.
Foreign Exchange Impact: The company faced a year-over-year decline of 5.9% in service revenue due to adverse foreign exchange impacts, particularly in Bolivia, which caused around $110 million in total FX headwinds. This poses a risk to revenue stability and financial performance.
Bolivia Devaluation: Despite local currency service revenue increasing by 7%, the devaluation in Bolivia remains a challenge, as it is insufficient to cover the adverse effects. Although the devaluation seems to have stabilized, it continues to impact financial results.
Panama Social Unrest: Service revenue in Panama was nearly flat year-on-year due to adverse effects from social unrest caused by social security reforms. This could disrupt operations and revenue generation in the region.
Home Business Revenue Decline: The Home business service revenue remained slightly negative at -1.4%, though it showed improvement from -6.1% last year. This segment continues to drag on the company's top-line growth.
Regulatory Approvals for M&A: The company is awaiting regulatory approvals for acquisitions in Costa Rica, Uruguay, and Ecuador, as well as the Coltel acquisition in Colombia. Delays or denials in these approvals could impact strategic growth plans.
Higher Commercial Investments: In Colombia, higher commercial investments to support customer base growth have slowed EBITDA growth despite top-line improvements. This could pressure margins if not managed effectively.
Government Contracts in Panama: Government contracts in Panama are now in the maintenance stage, leading to substantially lower revenue contributions. This could limit future growth opportunities in the region.
Working Capital Challenges: The company faced lower collections from government projects in Panama and had to catch up on payments frozen in Bolivia due to devaluation. These issues could strain cash flow and operational efficiency.
Equity Free Cash Flow: The company is on track to deliver $750 million in equity free cash flow for the year 2025.
Leverage: The company remains committed to keeping leverage below 2.5x by year-end 2025.
Home Business Recovery: Optimistic about positive growth in the Home business segment in the second half of 2025, with service revenue trajectory improving from -6.1% last year to -1.4% this quarter.
B2B Growth: Service revenue in the B2B segment grew nearly 4% organically, with digital services achieving a 16% CAGR over the past 2 years. The company expects continued growth in this segment.
Colombia Market: Service revenue in Colombia is expected to sustain growth, with mobile postpaid customer base growing by 15% year-on-year and Home business achieving a 12% growth rate.
Guatemala Market: Postpaid customer base expanded 20% year-over-year, with mobile service revenue growing more than 5% in real terms. Growth is expected to remain strong in the second half of 2025.
Panama Market: Mobile postpaid customer base grew 20% year-on-year, with mobile service revenues increasing by 4%. The company expects steady growth in this market.
M&A Updates: The company expects regulatory approval for the Uruguay and Ecuador acquisitions in Q3 and Q4 2025, respectively. The Coltel acquisition in Colombia is on track for Q1 2026 closing, and Costa Rica's regulatory approval is targeted for Q1 2026.
Dividend Policy: The Board approved an interim dividend of $2.5 per share, to be paid in two installments in October 2025 and April 2026, reflecting a total dividend of approximately $423 million.
Special Interim Dividend: Declared a special interim dividend of $2.5 per share, reflecting confidence and capital discipline.
Board Approved Interim Dividend: Board approved an interim dividend of $2.5 per share to be paid in two installments, October 2025 and April 2026, representing an approximate aggregate dividend of $423 million.
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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