Millicom International Cellular S.A. (NASDAQ:TIGO) Q4 2023 Earnings Call Transcript
Millicom International Cellular S.A. (NASDAQ:TIGO) Q4 2023 Earnings Call Transcript February 27, 2024
Millicom International Cellular S.A. misses on earnings expectations. Reported EPS is $-0.37 EPS, expectations were $0.29. Millicom International Cellular S.A. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Michel Morin: Hello, everyone and welcome to our Fourth Quarter 2023 Results Call. This event is being recorded. Our speakers today will be our CEO, Mauricio Ramos; our President & COO, Maxime Lombardini; and our CFO Sheldon Bruha. The slides for today's presentation are available on our website, along with the earnings release and our financial statements. Now, please turn to Slide 2 for the safe harbor disclosure. We will be making forward-looking statements which involve risks and uncertainties and could have a material impact on our results. And on Slide 3, we define the non-IFRS metrics that we will reference throughout the presentation, and you can find reconciliation tables in the back of our earnings release and on our website. With those disclaimers out of the way, let me turn the call over to our CEO, Mauricio Ramos.
Mauricio Ramos: Good morning, and good afternoon, everyone. Thanks for joining us today. As you likely recall, we set four key priorities at the beginning of 2023. We will update you in detail on each of these priorities in the next several slides, but here are the key highlights. First, we continue to make very meaningful strides in executing Project Everest to improve our operational efficiency across the business. During the fourth quarter, we implemented Phase 2 of the project in each of the nine countries where we operate. The headline is that we are exceeding our own expectations for cost savings. Second, in Colombia, the strategy we laid out some years ago and our increased focus on driving profitability are now really paying off in a combined manner.
EBITDA was up more than 24% year-on-year, excluding severance, and the margin reached 38%, which is another record for this business. This, even as we continue to build our mobile subscriber base. We are achieving this while also optimizing our CapEx because we are now harvesting the very significant investments we have made in Colombia over the past several years. As I told you during our Q3 call, we're not done yet in improving Colombia. In fact, our performance in Q4 does not yet reflect the additional actions we have taken in the quarter and in January of this year. So stay tuned for more on Colombia. Third, in Guatemala, the strategic initiatives we put in place over the past couple of years to protect our business are also now paying off.
During Q4, we were able to build on the progress we made throughout the year, and we had strong prepaid service revenue growth on a sequential basis compared to Q3, much higher than what we have seen in the last few years. You will recall that we raised prices on our most popular prepaid plans in mid-September. The market has reacted positively, and we have decided to pull through a price increase on all of our remaining plans in early February of this year. So, we continue to feel cautiously optimistic about the outlook for top line growth in Guatemala going forward. Fourth, on Lati, our regional tower portfolio, we launched the monetization process during Q4. Because this is an ongoing M&A process, that's all we can say about this for now.
So again, stay tuned on Lati. And finally, here's the combined effect of all these initiatives put together, the punchline, if you will. We are raising our outlook and we're now targeting equity free cash flow of around $550 million for 2024. As a result, for the three year period between 2022 and 2024, the cumulative outlook is now for around $700 million of equity free cash flow. Often, you have heard us say that our equity free cash flow for the 2022-2024 period will be back ended, and that 2024 would be the year of the cash flow. We're now ready to deliver on that promise. The strategic initiatives initiated over the past few years, combined with a revamped and reinforced focus on profitability are making this happen. Now, let's review each of these points in more detail beginning with Project Everest on Slide 6.
See also 15 Best Dividend Stocks to Buy According to Warren Buffett and Top 20 Most Valuable Tobacco Companies in the World.
To continue reading the Q&A session, please click here.
