Impact of UNE consolidation wipes out MIC profits, despite 22% revenue growth

22 Apr 2015

Millicom International Cellular (MIC), which provides mobile and cable broadband, TV and telephony services throughout Latin America and Africa under the ‘Tigo’ brand, has registered a 21.6% year-on-year increase in revenue for its first quarter, booking turnover of USD1.71 billion for the first three months of 2015, compared to USD1.41 billion twelve months earlier. EBITDA was up 18.2% y-o-y at USD565 million, although EBITDA margin slipped to 33.1% from 34.0% in Q1 2014. Net profit for the period swung from USD2.24 billion in Q1 2014 to a loss of USD46 million in the period under review, however. MIC attributed the drop to lower ‘Other Operating Income’, the group’s revaluation of its 55% interest in Comcel in Guatemala in Q1 2014 having added USD2.25 billion to its books. The consolidation of UNE in Colombia also negatively impacted the group’s bottom line, with MIC attributing a USD90 million increase in depreciation and amortisation, as well as an 18% increase in operating expenses to the development.

In operational terms, MIC registered an 11.2% increase in its mobile subscriber base to 57.41 million, fuelled in particular by expansion in Tanzania and Chad, which booked net additions of 509,000 and 281,000 respectively during the quarter. Mobile ARPU has continued its downward trend across Latin America and Africa, falling to USD6.5 per month, compared to USD7.2 in Q4 2014 and USD7.6 in Q1 2014. Data services are still on the rise, however, and MIC sold 1.3 million smartphones and added 594,000 new mobile data users during the three-month period, 338,000 of which were in African markets. Mobile financial services (MFS) also saw strong growth, with the number of registered users reaching 3.41 million, compared to 2.44 million twelve months previously. Meanwhile, largely due to the consolidation of UNE, the group’s total cable-based revenue generating units (RGUs) soared to 5.18 million from 1.32 million a year earlier.

Luxembourg, Millicom International Cellular (MIC)