reports
- Soomit Datta
TIGO (Buy, TP: $30, +30%) Millicom - Upgrades following Q1s support r...
Following strong Q1s last week we have pushed our target to $30, from $24. Underlying upgrades are 5-6% at EBITDA and we have trimmed capex further. Partly mitigating factors are 1/ We have cut our expectation for a dividend from Honduras, and 2/ Built in a 50% likelihood of a devaluation in Bolivia, though this doesn’t appear very imminent (we include in our valuation, not in estimates)
- Soomit Datta
Liberty LA (Buy, TP: $13, +60%) Q1 24 - Tough optics in Q1, but PR EBT...
Liberty LA Q1 24 was always going to be a difficult print and we saw this in the Puerto Rico numbers, with revenue hit by much lower equipment sales (lower commercial efforts) and EBITDA by even higher than expected integration costs. With that said, the integration has now been completed, and a “restored” PR monthly EBITDA guide of $45m has been reiterated for during H2 ($23m in Q1) which with integration eliminated, the TSA almost entirely falling away, cost savings (10% headcount reduction) a...
- Soomit Datta
Liberty LA (Buy, TP: $13, +110%) Liberty LA - T-Mobile FWA in Puerto ...
Having published a couple of days ago and highlighted T-Mobile’s early-March FWA launch in Puerto Rico we want to clarify what may be an important nuance – Liberty PR cut prices not immediately following the early March FWA launch, as we first understood, but rather had cut toward the end of last year (October) on digital channels only. As such the FWA launch prices are approximate to Liberty’s digital offers (a small discount), Liberty hasn’t needed to respond thus far, and while we still see s...
- Soomit Datta
LILA US (Buy, TP: $13, +102%) Call with CFO Chris Noyes / T-Mobile FW...
We hosted a call with Liberty LA’s CFO, Chris Noyes, last week which focused on the very strong operational performance at CWC/Costa Rica, and the imminent turnaround in Puerto Rico (full migration off AT&T from April). We feel good about momentum here, though have cut underlying revenue a touch in Puerto Rico to reflect recently lowered fixed prices in response to T-Mobile’s FWA early March launch. We will watch this closely but with PR fixed BB ~6% of group revenue we don’t think it materially...
- Soomit Datta
LILA US (Buy, TP: $14, +110%) Liberty LA Q4s - Unpicking the $1 billi...
Liberty LA numbers last night were in-line, a mix of very weak Puerto Rico and very strong profitability in the Caribbean and Panama. We think most focus, however, will be on the new FCF guide (2024-26) - breaking from a 1-year outlook - which we attempt to break down in this note. It feels achievable and is only a touch below our existing estimates once we adjust for the refinancing assumption (for the 2027-29 debt stack) embedded in the guide.
- Soomit Datta
Liberty LA (Buy, TP: $14, +110%) Q3s - Small EBITDA beat, moving parts...
Liberty LA reported Q3s after close. Headline numbers were solid (2% ahead at EBITDA in fact) though this masked 1/ A very strong performance at CWC (Caribbean, Networks, Panama), 2/ What look to be structurally lower HQ costs (including lower personnel costs), but 3/ A weaker margin on even tougher integration woes in Puerto Rico than the market feared (and exacerbated by iPhone 15 subsidies).
- Soomit Datta
- Soomit Datta
LILA (Buy, TP: $14, +70%) Liberty LA Q2s Quick Take: Synergies in Pan...
Liberty LA reported Q2s after close. Numbers were a touch light at revenue, with Puerto Rico wireless still a concern, but strong at EBITDA (5% ahead of us), driven by Panama synergies supporting CWC margins. FCF improved into Q2, allowing for minority dividends, which should help alleviate concern for FY numbers, as should the reiteration of all FY 23 guidance.
- Soomit Datta
Millicom (Neutral, TP: $18 ($19), +15%) Millicom - Deal in Colombia f...
Millicom Q2s trends reported yesterday were weak, though within the parameters pre-guided to at the end of June. Perhaps most striking is the leverage of 3.34x as of Q2 which, including existing and potential Colombian spectrum liabilities (1.9 GHz and AWS), rises to nearer 3.75x. The solve for this could come from a deal in Colombia, though we will need 6-12 months to see whether this is approved ...
- David Lopes
- Soomit Datta
LatAm Telecoms High Yield - Starting Coverage
Following a similar initiative in Europe, we are picking up closer coverage of the high yield names in LatAm. In part there is a capital structure overlap with existing equities under coverage (Liberty LA and Millicom) but we have also separately engaged on new names: WOM in Chile (wireless, FTTH) and Totalplay in Mexico (FTTH). Our detailed understanding of these additional names should reinforce understanding of the relevant regional equities also (AMX, Megacable, Televisa).
- Soomit Datta
TIGO (Buy, TP: $21, +23%) TEF (Buy, TP: EUR4.7, +30%) Millicom - Apol...
A flurry of activity. Millicom last night announced that discussions with Apollo regarding an offer for all of Millicom shares are off. This comes 24 hours after the announcement of a MOU between Telefonica and Millicom to merge their mobile networks in Colombia (in reality a pretty "full" merger potentially) AND the latest news on a 5G auction date in December.
- Soomit Datta
- Soomit Datta
LILA (Buy, TP: $14, +66%) AMX (Buy, TP: $27, 22%) Liberty LA/AMX - VT...
VTR in Chile – LILA’s contribution to the ClaroVTR JV with AMX but which excludes Claro - last night disclosed Q1s. On the plus side, fixed service revenue looks to have almost stabilized given an increase in sequential ARPU, though EBITDA margins continued to fall – to 15% in the quarter – on rising cost.
- James Ratzer
Deutsche Telekom (Buy, €30, +42%) Liberty Global (Buy, $31, +46%) Tho...
We’ve just sat through almost 3 hours of back-to-back earnings calls with DT and Liberty Global. While they don’t necessarily really overlap (except that we like both and the share price and our target price for both are almost identical), we draw our key takeaways from both calls into a single update.
- David Lopes
- Soomit Datta
- Eduardo Henrique Gomes
- Soomit Datta
New Street: Liberty LA (Buy, TP: $15, +83%) Liberty Latin America (Bu...
Following last week’s Q3s we have updated our model to exclude Chile from consolidated estimates. The removal of significant interest charges in Chile (and ~zero OpFCF) is a key driver of the expansion of FCF into 2023 and we include a couple of waterfall charts to highlight what drives FCF expansion through 2023 and 2024; we are a touch ahead of consensus we believe, perhaps due to timing synergy assumptions.
- Soomit Datta
New Street: LILA (Buy, TP: $15, +115%) Liberty LA - Deal authorisatio...
Liberty LA released an 8K yesterday indicating that authorisation for the Chile JV with AMX has been achieved from the National Economic Prosecutor’s Office; no more authorisations are required. Perhaps most significantly, there are no proposed changes to the JV’s capital structure on inception i.e. no additional equity is being contributed (and we don’t anticipate this happening later either). We highlight 4-5 key slides showing the future Group FCF profile (ex-Chile losses) and how, along with...
- Soomit Datta
New Street: Liberty LA (Buy, TP: $15, +120%) Chile and beyond; Eyes o...
After more weak financial performance for both local operators in Q2 in Chile, we update our JV modelling of Liberty’s proposed JV with Claro (AMX). Press commentary implies the deal could pass soon, which is a necessary first step for the stock to work.
- Soomit Datta
New Street: LatAm Telecoms Q1 Wrap: Sticking with Wireless over Fixed ...
We publish today our take on the LatAm Telcos Q1 earnings season. As well as our broader note which picks out key themes and market by market insights, we also publish for the first time a summary of our database which looks at key financials and operational KPIs on a country level basis - see LatAm Telcos Quarterly Databank.
AMX AMERICA MOVIL S.A.B. DE C.V. ADS
ENTEL EMPRESA NACIONAL DE TELECOMUNICACIONES S.A.
MEGACPO MEGACABLE HLDGS SAB DE CV CERT PART ORD CONS OF 2 A
VIVT3 TELEFONICA BRASIL S.A.
PAGS PAGSEGURO DIGITAL LTD
LILA LIBERTY LATIN AMERICA LTD
TLEVISA GRUPO TELEVISA
STNE STONECO
MIC MILLICOM
OIBR3 OI S.A. ON
TIMP3 TIM BRASIL SA
DLO DLOCAL
NU:US NUBANK
GETT3 GETNET
CZA COAL OF AFRICA LTD
- Soomit Datta
New Street: TIGO (Buy, TP: $48, +120%) Millicom - Rights Issue techni...
"What did they say on the call?!" was the question of the day as the stock, having opened up 3% initially - and following the date being announced for the rights offering (10 May) and Q1 earnings release, then reverse engined into the earnings call.
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