reports
- Soomit Datta
TIGO (Buy, TP: $34, +29%) Millicom - Q3 24: Solid quarter; raised EFCF...
Millicom has reported a solid set of results with improving service revenue trends, a nice reversal in Home Broadband nets adds (driven by Colombia) and strong EFCF this quarter. The company has lifted its FY24 guidance for EFCF to ~$650m from “more than $600m previously” – though consensus is close to this level for FY24.
- 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
Millicom (Buy, TP: $30, +17%) Multiple M&A’s: Millicom (BUY) in Colom...
A series of transactions, involving four separate parties, have been proposed by Millicom (and with a MOU with Telefonica) which could take the patchy Colombian telco market to an effective duopoly, with Millicom as a strong no2. The deal could yet stumble (multiple parties, involves a formal privatization, regulation), will take a little while to consummate, leaves question marks over WOM (which filed for protection locally in April), but we think can comfortably create over $1 billion of syner...
- 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
- Soomit Datta
- Soomit Datta
TIGO (Neutral, TP: $20, +16%) Millicom Q4s: FCF lift again - does Xav...
Millicom’s Q4s came in nicely ahead at EBITDA and with the positive surprise of another lift in the EFCF outlook through to the end of 2024. After a negative EFCF print for 2023, this implies a mammoth $550m for FY 24, and well ahead of consensus, driven by some “one off” factors in 2023 falling away, and with all indications this can be considered a floor level looking forward (our inference). If so this points to a sustainable EFCF yield of 19% after today’s share price lift.
- Soomit Datta
LatAm Telcos – 2024 Outlook: Top picks Brazil (TIM and Vivo) and Megac...
After strong stock performance in 2023 we think the Brazilians will continue to perform into 2024 on the back of solid wireless fundamentals: rising prices, revenue/EBITDA > inflation, falling capex/sales – and with IOC (tax) risks in the rear view for now. Shareholder returns are also sector leading whilst valuations are attractive (notably versus quickly falling rates).
- Soomit Datta
- 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.
- David Lopes
- Soomit Datta
- David Lopes
- Soomit Datta
TIGO (Buy, TP: $22, +17%) Slower growth but FCF comes through in Q4; ...
Millicom reported Q4s today. Service revenues and EBITDA came in in line with consensus while EFCF came in 3% above (but a touch below our expectations). Service revenue growth slightly slowed to 2.3% y/y in Q4, from 2.7% in Q3, driven by Mobile and B2B while the fixed business showed some modest inflection this quarter. EBITDA growth accelerated and is back into positive territory. EFCF performance this quarter was positive, with USD206m of EFCF; reiterating this would put Millicom on track to ...
- Soomit Datta
LBTY (Buy, TP: $32, +45%) TIGO (Buy, TP: $22, +25%) Could Liberty Glo...
Following yesterday's confirmed discussions between Apollo/Claure and Millicom (and a rumoured bid coming at high teens USD price), we look at whether Liberty Global could counterbid in an attempt by John Malone to recreate the aborted 2019 merger between Liberty Latin America and Millicom.
- Soomit Datta
TIGO US (Buy, TP: $22, +25%) Millicom - rumoured bid interest from Ap...
The FT is today reporting on rumoured bid interest in Millicom from Apollo / Claure at a "high teens" USD price. The stock has moved quickly to these levels, suggesting some validity. We look at deal multiples, leverage and implications/readacross in this short note.
- Soomit Datta
New Street: TIGO (Buy, TP: $22, +85%) Millicom - Xavier Niel builds a...
Millicom disclosed after close on Friday that Xavier Niel, via Atlas Investissement, has built a 7% stake in Millicom. We would agree that this is an inexpensive asset with avenues for value creation. We highlight these and look at the implications for the stock.
- Soomit Datta
- Soomit Datta
New Street: TIGO US (Buy, TP: $28, +130%) Mobile Money - Expert Speak...
We held an Investor Call with Millicom’s CEO at the end of last week. Amongst global telcos, Millicom has perhaps the most ambitious plans to build a Fintech ecosystem offering services to both merchant (QR payments) and consumer (digital wallet). We discussed the roadmap for this venture (4 countries up and running, 3 on the way) and pilots underway today in Paraguay which include nano-lending ($20-$40 working capital-style loans).
- Soomit Datta
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