• Equity Free Cash Flow (Q4 2024): $236 million.
• Full Year Equity Free Cash Flow (2024): $728 million, excluding tower sales.
• OCF Margin: Increased by 8 percentage points to nearly 31%.
• Leverage: Reduced to below 2.5x.
• Postpaid Customers (Q4 2024): Added 274,000.
• Home Subscribers (Q4 2024): Added 49,000.
• Mobile Service Revenue Growth (Full Year 2024): 4.6%.
• B2B Revenue Growth (Full Year 2024): 3.1% organically.
• Digital Solutions Growth (2024): Nearly 15% increase.
• Colombia EBITDA Margin (Full Year 2024): 38.1%.
• Guatemala OCF (2024): $692 million, with EBITDA margin at 54%.
• Panama Service Revenue Growth (2024): Close to 5%.
• Service Revenue (Q4 2024): $1.34 billion, down 2.9% year-over-year.
• EBITDA (Q4 2024): $618 million, up 11% year-over-year.
• Cash CapEx (Q4 2024): $162 million.
• Finance Charges (Q4 2024): $101 million.
• Lease Payments (Q4 2024): $80 million.
• Honduras Repatriation (Full Year 2024): Just shy of $90 million.
• Equity Free Cash Flow Target (2025): Around $750 million.
• Interim Dividend (January 2025): $1 per share.
• Approved Interim Dividend (April 2025): $0.75 per share.

• Warning! GuruFocus has detected 5 Warning Sign with TIGO.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Millicom International Cellular SA (NASDAQ:TIGO) achieved a record equity free cash flow of $728 million for the full year 2024, excluding tower sales.
• The company successfully reduced its leverage to below 2.5x, meeting one of its key financial priorities.
• Mobile service revenue growth accelerated to 4.6% for the full year, driven by strategic initiatives such as network expansion and simplified commercial offers.
• The B2B segment showed strong performance with a 3.1% organic revenue growth and a 15% increase in digital solutions.
• Millicom International Cellular SA (NASDAQ:TIGO) resumed shareholder remuneration, including dividends and a $150 million share buyback program, reflecting confidence in its sustainable cash flow profile.

Negative Points

• Service revenue for Q4 2024 was down 2.9% year-on-year, impacted by FX fluctuations and the absence of Panama B2B project revenues.
• The company faces potential negative impacts on equity free cash flow in 2025 due to FX risks in Bolivia, Colombia, and Paraguay.
• Legal disputes pose a risk to equity free cash flow in 2025 if adverse rulings occur.
• The competitive landscape in Colombia remains challenging, with aggressive market behavior impacting fixed broadband growth.
• Bolivia's currency devaluation and the adoption of an estimated spot rate for financial reporting are expected to negatively impact service revenue and EBITDA.

Q & A Highlights

Q: Could you please be more explicit on which markets and segments should see the main improvement as per your expectations for 2025? Also, what will be the cost of these reacceleration efforts in terms of OpEx and CapEx? A: Our mobile business, which is more than 50% of our revenues, is growing nicely, with a 4.6% year-over-year increase. We expect this trend to continue in 2025, driven by postpaid and prepaid growth. We also anticipate our home segment to recover and B2B to maintain a growth rate of around 3%. We believe we can sustain the same level of CapEx by focusing investments where demand is highest, thus not expecting pressure on margins. Challenges may arise in Costa Rica and Bolivia due to aggressive competition and currency devaluation, respectively. - Marcelo Benitez, CEO

Q: Could you comment on the difference between cash CapEx and booked CapEx in 2024 and how this will develop in 2025? Also, what are the risks of adverse legal rulings mentioned in your cash flow guidance? A: CapEx booked decreased from $809 million in 2023 to $677 million in 2024, and we expect it to stabilize around this number in 2025. Cash CapEx was lower due to timing differences in payments, and we expect these numbers to converge over time. Regarding legal risks, we have a provision for a negative ruling in Costa Rica, and there are ongoing legal disputes across countries that could impact cash flow. - Bart Vanhaeren, CFO

Q: Regarding your pricing power in Guatemala, Colombia, and Panama, is growth driven more by volume or pricing? Also, why did you choose to reinstate dividends over further debt reduction? A: Growth is driven by increasing data demand, which we monetize by increasing allowances and ticket prices, a strategy applicable across all markets except Costa Rica. On dividends, we generate about $750 million in equity free cash flow and decided to distribute $500 million to shareholders while keeping the rest for deleveraging or strategic projects. We expect to end the year significantly below our 2.5x leverage target. - Marcelo Benitez, CEO and Bart Vanhaeren, CFO

Q: What are the main assumptions embedded in your 2025 guidance, and what are the potential upside and downside risks? A: Our $750 million equity free cash flow guidance represents a 3% year-on-year increase. While we anticipate revenue growth, the top line in USD may decline due to Bolivia's accounting changes. EBITDA is expected to rise, with stable CapEx contributing to the equity free cash flow increase. Downside risks include legal costs and FX impacts, while upside potential exists if these risks do not materialize. - Bart Vanhaeren, CFO

Q: Can you provide an update on the regulatory process for your M&A projects in Colombia and Costa Rica? A: In Colombia, the merger filing is progressing well, and discussions with Telefonica are ongoing. We expect to close the transaction in the second half of the year. In Costa Rica, the regulatory process is following its path, with approvals expected around year-end. - Bart Vanhaeren, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.