Millicom Increases Its Mobile Customer Base By Over 6 million

This was contained in its 2015 annual and financial report.

According to Millicom, its cable footprint currently exceeds 7.6 million homes.

“Our cable footprint expanded by over 500,000 to 7.6 million homes passed. The number of revenue generating units (“RGUs”) per household increased to 1.88x from 1.80x a year ago. More than 56% of our households were double or triple play, around 3 percentage points more than one year ago. The ARPU per Home Connected was stable year-on-year in local currency,” it reported.

Its full year operating cash flow increased by 15% to $1.11 billion from a combination of a higher EBITDA, a lower Capex paid and cash inflow from the working capital.

It indicated that, taxes paid at $252 million were significantly reduced compared to last year (down 34%) thanks to advanced payments of tax in 2014 in Colombia used to reduce the liability for 2015 and a change in the profit mix of the operations resulting in lower tax payments.

“Net interest paid was up 7% on 2014 on the higher level of debt and the payment of consent fees. This resulted in free cash flow of $504 million, a 96% improvement. Thanks to lower dividends paid to noncontrolling interests (10% lower at $269 million), equity free cash flow significantly improved by $278 million to $235 million representing a dividend cover of 89%”

The highlights of the report are below:

Revenue of $6.73 billion, up 5.4% from 2014

Adverse currency movements were stronger than last year although revenue grew by 5.4% (with LatAm growing 6.6% and Africa declining 1.3%). Service revenue was up 5.8%.

Adjusted EBITDA at $2.27 billion – margin at 33.7%

Full year EBITDA at $2,178 million was 4.1% higher than 2014 partly due to inclusion of UE for the full year compared to four and half months in 2014. At constant currency, EBITDA grew by 17.1%. There were $87 million of restructuring and integration costs and other one-off charges mostly booked in Q4. Adjusting for these items EBITDA was $2,266 million up 7.4% with the margin up 0.7 to 33.7%. The key driver of this improvement is Colombia demonstrating the success of our merger together with continued efficiencies at the headquarters.

Equity Free Cash Flow grows to $235 million

The full year operating cash flow increased by 15% to $1.11 billion from a combination of a higher EBITDA, a lower Capex paid and cash inflow from the working capital. Taxes paid at $252 million were significantly reduced compared to last year (down 34%) thanks to advanced payments of tax in 2014 in Colombia used to reduce the liability for 2015 and a change in the profit mix of the operations resulting in lower tax payments. Net interest paid was up 7% on 2014 on the higher level of debt and the payment of consent fees. This resulted in free cash flow of $504 million, a 96% improvement. Thanks to lower dividends paid to noncontrolling interests (10% lower at $269 million), equity free cash flow significantly improved by $278 million to $235 million representing a dividend cover of 89%.

Share Capital

On 31 December 2015 Millicom had 101.7 million issued and paid up common shares of par value $1.50 each, of which 1.6 million were held by the Company as treasury shares (2014: 1.8 million). During the year the Company acquired approximately 29,000 shares and issued around 158,000 shares to management and employees under the LTIP remuneration plans, 45,000 shares from share options to the Chairman of the Board, and approximately 6,000 shares to Directors as part of their annual remuneration.

Distribution to shareholders and proposed distributions

On 15 May 2015 at the Annual General Meeting of shareholders, a dividend distribution of $264 million was approved, and subsequently paid to shareholders. On 10 February 2016 Millicom announced that the Board will propose to the Annual General Meeting of the shareholders a dividend distribution of $2.64 per share to be paid out of Millicom’s retained earnings at 31 December 2015. The proposed dividend is consistent with distributions in 2013 and 2014.

Risks and uncertainty factors

The Group continues to operate in an industry and in markets which are characterised by rapid change. This change creates opportunities and at the same time a degree of uncertainty. Many of the underlying risks are inherent in these markets, including the impact of regulation (including taxation), currency fluctuations, and underlying macro-economic conditions which impact our customers in their daily lives. The telecommunications and content industries continue to evolve at an unprecedented pace, with access to the internet and streaming services gathering pace and spreading to all parts of the world. Staying competitive in this increasingly diverse business requires constant innovation, in development of new products and services, delivery methods, and in quality of content, service and speed of delivery.

Access to, and investing capital in the right place at the right time are as important as ever, and decision making in this regard remains key to ensuring a balance of risk and return in the Group. Further information on these and other key risks faced by the Group are set out in the Risk Management section of the Annual Report.

Financial risk management objectives and policies

Millicom’s financial risk management policies and objectives together with a description of the various risks and hedging activities undertaken by the Group are set out in Section D. Financial Risk Management of the Consolidated Financial Statements.

Controls and risk management in preparation of the consolidated financial statements

Internal controls and additional information on the preparation of the Consolidated Financial Statements are set out later in this report.

Management and employees

Over the last three years the Group has developed many key functions and improved support to local operations, including in the areas of procurement, network development, marketing, IT, governance, compliance and finance. With the merger with UNE the Group’s management and employee headcount increased significantly, from approximately 12,000 prior to the acquisition to almost 16,000 at 31 December 2015.

Outlook for the Group

In 2016 we will continue to execute on The Digital Lifestyle strategy, expanding our cable footprint and monetising data. Based on current outlook, at constant currency, and a constant perimeter with Guatemala and Honduras fully consolidated we expect mid-single digit increase in service revenue in 2016, and Adjusted EBITDA to grow by mid to high single digits. Capex (excluding spectrum and licenses) is expected to be in the range of $1.15 billion to $1.25 billion.

A clear operational roadmap exists for 2016 aimed at a leadership role in fixed-mobile services. Looking ahead, highlights will include the roll-out of 4G in Paraguay, satellite pay-TV launch in Colombia and the introduction of TiVo across our Latin American countries. Areas of focus will include Tigo Business, customer acquisition and leading the mobile financial services industry with further product innovation.

Subsequent events

On 8 February 2016 Millicom announced that it had signed an agreement for the sale of its business in the Democratic Republic of Congo (DRC) to Orange S.A. The transaction is subject to regulatory approval.

Source: Newsghana.com.gh