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
- 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
- Soomit Datta
New Street: Global Telcos - Show me the (Mobile) Money! Revenues beyon...
We continue to see Mobile Money (Money Transfers, Payments, Digital banking and Lending) as one of the key non-core drivers of the Telcos sector, notably in Emerging Markets and Developed Asia. In this note we deep dive into who is doing what in the Fintech world, and where, and consider which Telcos are most positively exposed.
- 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: USD44, +100%) Millicom - Panama put exerci...
As part of the 6K filing ahead of the USD750m rights offering, there are two new disclosures worth highlighting: 1/ The announcement that the Panama put has been exercised, which will cost Millicom USD$290m for the 20% it doesn't own, and 2/ The DOJ issuing a subpoena for information on Guatemala (including Millicom's minority purchase) as well as on other countries.
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