reports
- Chris Hoare
- Chris Hoare
Global EM Telcos & Towers NSR GEM Top-10 March ‘25 Update: February a...
February was another good month for our top EM Telcos, now up 15% YTD on average. This note also includes key news & other thoughts in order to help investors generate alpha within the EM Telco space. With performance strong so far, we make no changes to our picks.
- Chris Hoare
- Chris Hoare
Liberty Latin America (Buy, TP: $14.8, +105%) Q4 24: Mixed, PR still ...
Group headline trends improved, although Puerto Rico remains weak at revenue/EBITDA. However, subscriber losses in PR also eased and Group capex guidance was cut as a result of which the company is maintaining guidance of $1bn of cumulative FCF between 2024 & 2026 (albeit while acknowledging they are behind after the first year). Results look better for the equity than debt holders in PR we think
- Soomit Datta
Liberty LA (BUY, TP: $13, +38%) Liberty LA / LCPR bonds - Outlook int...
Liberty LA will report Q3s in early November with focus largely on Puerto Rico and monthly EBITDA. Relative to the recovery aspiration by YE of $45m per month, we think they’ll be some way off (so does consensus) and performance of the bonds and, to a less degree the equity (LCPR equity is implied at zero we think), will be driven by commentary on momentum in the newly launched products.
- David Lopes
- Soomit Datta
LatAm Telcos - EM wireless concentration: LatAm points to Millicom and...
Drawing on the work of our colleague Chris Hoare (HERE for Africa), we broaden out our EM analysis of market concentration in wireless. LatAm screens well, in the largest market of Brazil (5 to 3 consolidation) but crucially also for the smaller caps of Millicom and – best in class – Liberty Latin America which remain the two top picks in the sector.
- Soomit Datta
Liberty LA (Buy, TP: $13, +45%) AMX (Buy, TP: $22 (from $24), +40%) L...
Liberty LA announced this week that AMX will take control of their 50/50 JV in Chile. This isn’t surprising but still cements a good “exit” for Liberty LA (putting zero value on the residual 9% stake this implies a 15.5x exit on FY 23 VTR EBITDA) and requiring a long-term perspective from AMX in order to turnaround the business - though we note recent top line and KPIs look to be (finally) stabilising.
- 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
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.
- 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
- 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...
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