News
Emerging markets operator hits 63 million mobile customers; forecasts modest service revenue growth.
Millicom this week reported lower fourth quarter revenue, as organic growth was offset by currency headwinds.
In the three months to 31 December 2015, Millicom generated revenue of US$1.68 billion, down from $1.86 billion a year earlier, which the company attributed to declining handset sales in Colombia, and the depreciation of the Colombian peso and Paraguayan guarani. On an organic basis, revenue was up by 4.4%.
Millicom’s full-year revenue grew 5.4% year-on-year to $6.73 billion; however, the company noted that the figure would have been $925 million higher absent the impact of currency fluctuations.
"Like most multinationals operating in emerging markets, our topline performance has been marred by the impact of currency depreciation and weakening economies but we are resilient and this remains a very creditable performance," said Millicom CEO Mauricio Ramos, in a statement.
Fourth quarter EBITDA fell to $492 million from $588 million a year ago, driven primarily by $60 million of one-off charges stemming from restructuring and integration charges in Africa and UNE in Colombia, and a provision related to its Guatemalan unit.
Millicom’s full-year EBITDA grew to $2.18 billion from $2.09 billion, thanks largely to the full integration of fixed-line operator UNE following the completion of its acquisition by Millicom in October 2014.
"Tigo-UNE in Colombia is a clear success story in an increasingly competitive market," Ramos said, adding that Millicom is delivering on its Latin America strategy.
"Across the wider region, we have seen volatile currencies, slowing growth rates and softened consumer spending. However the appetite for smartphone adoption remains strong and a significant contributor to the group," he said.
Millicom ended December with 62.59 million mobile customers, comprised of 32.59 million in Latin America and 30 million in Africa.
For 2016, Millicom forecast mid-single digit service revenue growth, in line with the 5% growth recorded in 2015. Adjusted EBITDA is expected to grow in the mid-to-high-single digits. Capex is expected to be between $1.15 billion and $1.25 billion.
"We expect uncertainty to continue to prevail in emerging market economies in 2016, which is why we will continue to strengthen the fundamentals of our business," Ramos said. "We have the right strategy and market positions to support our ambitions."
