Millicom reported a fall in fourth-quarter results, hurt by negative currency effects and a number of one-off charges. Revenues fell 9.8 percent to USD 1.68 billion, and adjusted EBITDA was down 7.4 percent to USD 551 million. The net result was a loss of USD 426 million, due mainly to non-cash charges on asset valuations and forex losses. The company said organic service revenue was still up 5.9 percent year-on-year on mobile data and cable growth, and the adjusted EBITDA margin improved 0.9 percent points to 32.9 percent on efficiency measures.
In Latin America, organic revenue rose 2.8 percent to USD 1.42 billion, reflecting some slowdown in Colombia and macro conditions in Paraguay. Service revenue still grew 4.4 percent. EBITDA was USD 513 million, after USD 33 million in one-off charges relating to Colombia integration costs and a bad debt charge. In Africa, organic revenue grew 13.4 percent to USD 258 million, and EBITDA was USD 17 million after USD 26 million of restructuring and one-off items.
The company’s mobile subscriber base increased by 1.1 million in the quarter to 62.6 million at the end of December, including the acquisition of Zantel which had 1.4 million customers at the end of 2015. In Latam, Tigo gained 900,000 new subscribers, largely from Guatemala and Colombia. In Africa, the subscriber growth came from Tanzania (close to 450,000) and Chad (return to growth after 2 negative quarters). During Q4, the operator sold nearly 1.6 million smartphones and added 1 million new mobile data users, with 30 percent of the customer base now using data.
The cable footprint expanded by 133,000 in Q4 to 7.6 million homes passed, and RGUs rose by 143,000 to 5.4 million. The number of RGUs per household increased to 1.88 from 1.80 a year ago, and more than 56 percent of households were double or triple play, around 3 percentage points more than a year ago. The ARPU per home connected was USD 26.0, flat quarter on quarter in dollar terms but up 11 percent year-on-year in local currency.
Mobile financial services added close to 470,000 new users in Q4 for a total 11.2 million, up 18 percent in one year. The main contributors to the growth in the quarter were Tanzania, Ghana and Rwanda. MFS revenue was up 13 percent, with ARPU of USD 0.96, down 4.3 percent in local currency. The quarter was impacted by the flooding in Paraguay, the company’s second largest MFS country, where revenue declined by 22 percent in local currency. Transactions this quarter were USD 2.89 billion, up 3.9 percent excluding top-ups.
Millicom announced plans for further restructuring in Africa in order to boost cash generation in the region. In Latin America, the company will continue to launch new services and invest in its footprint, with the planned roll-out of 4G in Paraguay, satellite pay-TV launch in Colombia and introduction of Tivo across all Latin American countries in 2016.
For 2016, Millicom forecast mid-single digit growth in service revenue, mid- to high-single digit growth in adjusted EBITDA and capital expenditure of USD 1.15-1.25 billion, down slightly from USD 1.28 billion last year. The forecast is based on constant currency rates and scope.