Currency volatility hits MIC top line

23 Oct 2015

Millicom International Cellular (MIC) has reported a 2.0% annual decline in third quarter revenue, due mainly to currency movements in Latin America and Africa, particularly in Colombia, Paraguay and Tanzania. The group booked turnover of USD1.64 billion for the three months ended 30 September 2015, down from USD1.68 billion in Q3 2014, although underlying organic growth was 7.2%. Reductions in sales costs and operating expenses, meanwhile, led to a 2.1% year-on-year increase in EBITDA to USD560 million, although organic EBITDA growth was 7.9%, the group noted.

In operational terms, the group passed the 60 million mobile subscriber milestone during the period under review, claiming 60.146 million users across its Latin American (31.682 million) and African (28.464 million) markets. Its cable business, meanwhile, saw a 5.6% y-o-y increase in RGUs, from 4.970 million to 5.251 million. Mobile financial services (MFS) users also grew, climbing to 10.746 million from 8.017 million in September 2014. The group reported ARPU reductions across the board, however, with wireless ARPU dropping 9.9% across Africa to USD2.5 – despite improvements of 12% and 5% in Senegal and Ghana respectively – 3.6% (to USD9.6) in its Central American units and 5.3% to USD8.5 in South America.

Commenting on the group’s plans, CEO Mauricio Ramos was quoted as saying: ‘Looking towards the end of the year, we expect external market conditions to become more challenging. Whilst we have not seen any significant slowdown in the demand for our products and service as a result of currency volatility we saw over the summer, GDP growth forecasts were dampened across many of the countries we operate in. We therefore remain focussed on protecting margins and improving cashflow generation. In this respect I am pleased to note that corporate costs have declined for the fifth consecutive quarter.’

Luxembourg, Millicom International Cellular (MIC)