Millicom records 13.1 per cent decline in Q1 net profit

Millicom International reported that its Q112 revenues rose by 8.4 per cent to US$1.68 billion.

However, net profit for the three months fell by 13.1 per cent to US$159 million.

"The EBITDA margin in Q1 was diluted to 44.2%, as a result of a change in our revenue mix, an acceleration of investments in new categories and pricing pressure in some markets. We are currently implementing various pricing initiatives in the markets experiencing negative growth to improve our affordability perception,” commented Mikael Grahne, president and CEO of Millicom.

In Latin America, where the company generates 80 per cent of its revenues, the top line grew by 9.2 per cent in local currency in the first quarter, in line with the average growth reported over the past twelve months. Mobile data now accounts for close to 12 per cent of revenues in Latin America.

In Africa, top line growth in local currency slowed to 5.4 per cent in Q1 with Ghana, Senegal and the Democratic Republic of Congo showing negative growth while Tanzania and Rwanda continued to report strong performance, supported by the success of mobile financial services. Margins in Africa were negatively impacted by the level of elasticity experienced so far following price reductions that were introduced last year.

In the first quarter of 2012, 26 per cent of customers had an ARPU in excess of $10, while only 10.7 per cent of total customer base were mobile data users.

Grahne added that he believes that cross-selling and up-selling services to their existing customers will enable the company to continue growing revenues and EBITDA, while generating attractive returns.