Millicom decouples revenue growth forecasts from subscriber growth

Millicom International – the holding company that operates mobile networks mainly in Africa and Latin America – has reported that its third quarter revenues rose by 13.1 per cent to US$1.15 billion.

Excluding currency fluctuations, revenues would have risen by 9.1 per cent compared to a year ago.

EBITDA was also up, by 9.3 per cent to US$529 million.

However net profit plunged to US$288 million compared to US$1.2 billion a year ago – although last year had been boosted by a one-off gain of $1.06 billion on the revaluation of the Honduran operation.

Mobile customers were up 13 per cent compared to Q310, bringing the total customer base to 42.2 million.

“In Africa, excluding Ghana and Senegal, our operations performed well during the quarter growing on average by 16 per cent in local currency. In Ghana we adjusted our prices due to the introduction of flat tariffs and specific promotions by our competitors. In Senegal our revenues were affected by capacity constraints associated with power shortages,” Mikael Grahne, president and CEO of Millicom said. “Revenue growth for Africa as a whole was 7.8 per cent in local currency. We remain focused on maintaining the affordability of Tigo products and services across the region.”

Grahne reiterated the company’s full-year guidance of an EBITDA margin of above 45 per cent, and a revision of the company’s CAPEX guidance to around US$820 million due to some delays in the delivery of equipment.

The company warned that it no longer sees a correlation between growth in customer numbers and future revenue growth and, overall, expects customer intake to continue to be quite volatile due to a range of factors including the macro environment, seasonality, competitor promotions and marketing activities.

Millicom is now focusing on 3G data and VAS customers who, on average, produce a higher additional ARPU as compared to 2G voice-only customers.