|
Earnings Release
Q4 2020
|
|
Panama
|
|
Q4 2020
|
Q4 2019
|
% change
|
FY 2020
|
FY 2019
|
% change
|
|
Mobile customers ('000)
|
1,957
|
1,766
|
10.8%
|
1,957
|
1,766
|
10.8%
|
|
Home customer relationships* ('000)
|
463
|
437
|
5.8%
|
463
|
437
|
5.8%
|
|
Revenue ($ millions)
|
151
|
160
|
(5.7)%
|
585
|
475
|
23.3%
|
|
Organic growth
|
(5.7)%
|
1.3%
|
(7.0) pt
|
(8.4)%
|
0.4%
|
(8.8) pt
|
|
Service revenue ($ millions)
|
144
|
154
|
(6.3)%
|
567
|
468
|
21.1%
|
|
Organic growth
|
(6.3)%
|
1.3%
|
(7.6) pt
|
(8.4)%
|
0.4%
|
(8.8) pt
|
|
EBITDA ($ millions)
|
64
|
73
|
(11.5)%
|
256
|
223
|
15.2%
|
|
Organic growth
|
(11.5)%
|
19.0%
|
(30.5) pt
|
(10.4)%
|
9.1%
|
(19.5) pt
|
|
EBITDA margin %
|
42.7%
|
45.5%
|
(2.8) pt
|
43.8%
|
46.9%
|
(3.1) pt
|
* Home Customer Relationships includes (1)
HFC (2) DTH (3) Others. ** FY 2020 organic growth rates pertain to both the fixed and mobile operations and are calculated using
the 2019 financials of Telefonica Moviles Panama S.A., which was acquired in August 2019. Q4 2019 organic growth rates are calculated
using the 2018 financials as reported by Cable Onda to the Panama Stock Exchange.
In
Panama, easing of the lockdowns has been more gradual and tempered than in our other markets. Total lockdowns on Sundays ended
on October 25. The impact of the restrictions has been very severe, and the economy contracted by 20.4 % in the first nine months
of 2020. Even with these restrictions, infection rates in Panama remain among the highest in the world, and the government introduced
new containment measures in December.
Despite
health and macro challenges, we experienced robust customer growth during Q4. In Mobile, net additions were 119,000 and our customer
base approached 2 million, an increase of 10.8% year-on-year, reflecting strong growth in both prepaid and postpaid. In Home, we
added 10,000 customer relationships, as we continued to increase penetration of our network.
Service
Revenue in Q4 2020 was $144 million, declining 6.3% from $154 million in Q4 2019, reflecting positive growth in B2C Mobile and
Home, which was more than offset by continued weakness in B2B. Encouragingly, all three business lines showed improved on a sequential
basis compared to Q3.
EBITDA
was $64 million, up from $63 million in Q3 and $60 million in Q2 but down 11.5% year-on-year due to the impact of the pandemic
on our B2B revenue.
|
Earnings Release
Q4 2020
|
|
El Salvador
|
|
Q4 2020
|
Q4 2019
|
% change
|
FY 2020
|
FY 2019
|
% change
|
|
Mobile customers ('000)
|
2,685
|
2,564
|
4.7%
|
2,685
|
2,564
|
4.7%
|
|
Home customer relationships* ('000)
|
273
|
274
|
(0.4)%
|
273
|
274
|
(0.4)%
|
|
Revenue ($ millions)
|
110
|
98
|
11.7%
|
389
|
387
|
0.6%
|
|
Organic growth
|
11.7%
|
(2.5)%
|
14.2 pt
|
0.6%
|
(4.5)%
|
5.1 pt
|
|
Service revenue
|
95
|
87
|
9.0%
|
348
|
348
|
(0.1)%
|
|
Organic growth
|
9.0%
|
(4.4)%
|
13.4 pt
|
(0.1)%
|
(6.2)%
|
6.1 pt
|
|
EBITDA ($ millions)
|
44
|
40
|
9.9%
|
137
|
140
|
(2.5)%
|
|
Organic growth
|
9.9%
|
4.0%
|
5.9 pt
|
(2.5)%
|
(4.4)%
|
1.9 pt
|
|
EBITDA margin %
|
40.0%
|
40.6%
|
(0.7) pt
|
35.1%
|
36.2%
|
(1.1) pt
|
* Home Customer Relationships includes (1)
HFC (2) DTH (3) Others.
El
Salvador fully reopened its economy at the end of August, and mobility trends have gradually improved since then. In addition,
strong international remittances stimulated consumption in the fourth quarter. Together with the investments we have made in both
network and spectrum over the past year, our Mobile business performed very strongly in Q4. We added 152,000 mobile customers during
the quarter, building on the gains made in Q3 and taking our customer base 4.7% higher year-on-year.
In
Home, customer relationships increased by 5,000, and we finished 2020 with 273,000, down slightly from 2019 due to decline
in our less profitable DTH base, as our HFC customer base increased 2%.
Service
revenue of $95 million in Q4 increased 9.0% year-on-year, the first quarter of positive growth since 2017. The turnaround was driven
by double-digit growth in Mobile and high-single-digit growth in B2B, as we begin to monetize recent capital investments. In addition,
service revenue included a favorable $2 million adjustment related to unused rollover balances.
EBITDA
also improved sharply, rising to $44 million in Q4 from $32 million in Q3, stemming from the increase in service revenue. EBITDA
rose 9.9% year-on-year, and the $2 million adjustment explained roughly half of this growth.
|
Earnings Release
Q4 2020
|
|
Nicaragua & Costa
Rica
|
|
Q4 2020
|
Q4 2019
|
% change
|
FY 2020
|
FY 2019
|
% change
|
|
Mobile customers ('000)
|
3,493
|
3,427
|
1.9%
|
3,493
|
3,427
|
1.9%
|
|
Revenue ($ millions)
|
90
|
97
|
(7.1)%
|
361
|
312
|
15.8%
|
|
Service revenue ($ millions)
|
86
|
96
|
(9.9)%
|
348
|
302
|
15.2%
|
|
EBITDA ($ millions)
|
29
|
42
|
(30.4)%
|
124
|
123
|
0.9%
|
|
EBITDA margin %
|
32.1%
|
42.9%
|
(10.8)pt
|
34.4%
|
39.5%
|
(5.1)pt
|
In
Nicaragua, the government did not implement any measures aimed at restricting mobility, but citizens voluntarily reduced
their mobility in Q2. As seen in other countries, mobility has gradually recovered also in Nicaragua, and we added 96,000
mobile customers in Q4 to reach 3.4 million. In Home, we continued to add customers in Q4 2020, and our customer base and
revenue continue to grow rapidly from a small base.
In
Costa Rica, the government implemented a controlled reopening beginning in early September, maintaining restrictions on large gatherings
at commercial venues and easing restrictions throughout Q4, with travel from foreigners allowed beginning in the quarter. We continued
to recover Home customers lost during H1, adding 4,000 in Q4, our strongest performance in more than two years.
|
Earnings Release
Q4 2020
|
|
Africa segment - Segment
financial results and Key Performance Indicators
Please refer to Note 5 of
our Unaudited Interim Condensed Consolidated Financial Statements for more details on our segments.
|
Africa Financial Highlights*
|
Q4 2020
|
Q4 2019
|
% change
|
FY 2020
|
FY 2019
|
% change
|
|
($m, unless otherwise stated)
|
|
Revenue
|
97
|
98
|
(0.8)%
|
366
|
382
|
(4.0)%
|
|
Service revenue
|
97
|
98
|
(0.7)%
|
366
|
382
|
(4.0)%
|
|
EBITDA
|
34
|
33
|
2.5%
|
125
|
117
|
6.9%
|
|
EBITDA margin %
|
35.3%
|
34.2%
|
1.1 pt
|
34.2%
|
30.7%
|
3.5 pt
|
|
Capex
|
13
|
20
|
(36.3)%
|
41
|
42
|
(1.3)%
|
|
Key Performance Indicators ('000)
|
|
|
|
|
|
|
Mobile customers
|
13,111
|
12,686
|
3.4%
|
13,111
|
12,686
|
3.4%
|
|
Tigo Money customers
|
7,141
|
6,460
|
10.5%
|
7,141
|
6,460
|
10.5%
|
|
Mobile ARPU ($)
|
2.4
|
2.5
|
(2.7)%
|
2.3
|
2.5
|
(4.9)%
|
* Service revenue, EBITDA and Capex are non-IFRS
measures. See page 20 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures. 2019
EBITDA has been re-presented as a result in the change in cost allocation. 2019 numbers have been restated to exclude Chad.
Our Africa segment comprises
our Tanzania operations. To combat COVID, the government implemented mobility restrictions that were not as strict as in most of
our Latam markets, and these restrictions were lifted relatively quickly. During Q4 2020, we added 684,000 mobile customers, as
we re-captured many of the customers lost in Q3 due to implementation of a biometric customer registration system. As a result,
our customer base increased 3.4% year-on-year to end the period at 13.1 million, a solid performance in light of the pandemic and
the limitations caused by the new regulation.
Meanwhile, the number of
customers that used Tigo Money increased 10.5% to reach 7.1 million. As of December 31, 2020, our MFS customers represent approximately
54% of our Mobile customer base. ARPU declined 2.7%, due mostly to a reduction in regulated interconnection rates, which took effect
in January 2020.
Service revenue declined
0.7% in Q4 2020 due to the decline in ARPU. Encouragingly, service revenue of $97
million in Q4 marks a continued improvement compared to $94 million in Q3 and $86 million in Q2 of 2020.
EBITDA
declined 2.5% year-on-year due mostly to the drop in revenue. On a sequential basis, EBITDA improved to $34 million in Q4 2020
from $32 million in Q3 and $29 million in Q2, consistent with the improved revenue trend seen elsewhere in the quarter.
Capex was $13 million in
the quarter and $41 million for the full year, compared to $42 million in 2019.
|
Earnings Release
Q4 2020
|
|
Corporate Responsibility highlights –
Q4 2020
Responsible Leadership
in Action: adapting our programs to the COVID-19 pandemic
Our work with NGO and government
partners has proven successful to help local communities meet the challenges and opportunities presented by COVID-19. By taking
our flagship programs online we have been able to continue advancing the adoption of digital tools and tailoring our programs to
meet the needs of teachers, women and children, who are particularly vulnerable to the impacts of the pandemic.
|
|
•
|
Protecting Children: We closed 2020 with the successful implementation of Maestr@s Conectad@s
in Bolivia, Paraguay, Nicaragua and Guatemala. Over 130,000 teachers finished the program's online learning modules on soft skills
and the use of technology to provide meaningful and effective online classes to their students. We are currently in conversations
with our partner, AYHU, to expand the program in all our operations in 2021 and continuing our work with ministries of education
to tailor our program to local needs.
|
|
|
•
|
Empowering Women: We developed an online platform for CONECTADAS with FUNDEMAS to continue
reaching women through virtual trainings on the use of the internet. El Salvador, Nicaragua, Paraguay and Colombia implemented
this platform through which over 2,500 women have already completed the available trainings.
|
Responsible Supply Chain
Management
Plans to adapt our Supplier
Training program to a virtual model for 2021 continue. The model consists of one general online training for all suppliers and
specific trainings on high risk areas for targeted suppliers. This modality will enhance our ability to meet our target to train
100% of our suppliers with more than $1 million in annual spend by 2023.
Health, safety and sustainability
During Q4, we continued
to implement and adapt workplace measures in line with the latest guidelines from the WHO and the U.S. CDC at all our critical
sites and operations region-wide. Over half of our employees continue to work remotely from the safety of their homes. There were
no fatal or serious accidents in our countries of operations during this reporting period. Although Hurricane Eta and Tropical
Storm Iota caused considerable damages in Central America, our employees remained safe, and we suffered some limited damage to
our infrastructure.
For the second consecutive
year, we obtained a 'B' for our CDP Climate Change report, which places our company above industry average at management level,
and signifies that we are “taking coordinated action on climate issues” according to CDP's scoring criteria. In October,
we conducted a gap analysis against Task Force on Climate-related Financial Disclosures (TCFD) recommended disclosures to continue
improving our alignment with the framework and strengthening our management of climate issues which impact our operations.
We completed all external
audits to meet re-certification of ISO Health & Safety (ISO 45001) and Environmental (ISO 14001) Standards in all of our countries
of operations.
|
Earnings Release
Q4 2020
|
|
Compliance and anti-corruption
program
During Q4, the Legal, Ethics
& Compliance team closed the year by celebrating the Ethics & Compliance Week, building on Millicom's culture of ethics
and integrity. Additionally, as part of the ongoing effort to monitor progress, two internal audit projects commenced in Q4 to
evaluate various aspects of our Ethics & Compliance Program.
We continued strengthening
our Due Diligence processes with respect to our Third-Party Management Program to ensure that suppliers of Covid-19 products are
properly screened.
Throughout 2020, we used
tools to gather and monitor data across functions and operations in order to determine improvements to our Anti-Corruption Program.
In addition, we launched a global Corrective Action Framework, which affirms the company's commitment to execute fair and consistent
corrective measures related to employee misconduct.
Conference call details
A presentation
and conference call to discuss these results will take place on February 11 at 14:00 (Luxembourg/Stockholm) / 13:00 (London) /
08:00 (Miami). Please dial in 5-10 minutes before the scheduled start time to register your attendance, or pre-register using
the following link. Dial-in numbers for the call are
as follows:
|
Sweden:
|
+46-8-5053-5281
|
Luxembourg:
|
+352-8002-3716
|
|
UK:
|
+44-20-3795-9972
|
US:
|
+1- 412-717-9224
|
A live audio
stream, slides, and replay details can be accessed at www.millicom.com and via the following link.
Financial calendar
2021
|
Date
|
Event
|
|
April 29
|
Q1 2021 results and conference call
|
|
May 4
|
2021 AGM
|
|
July 29
|
Q2 2021 results and conference call
|
|
October 28
|
Q3 2021 results and conference call
|
For further information, please contact
|
Press:
|
Investors:
|
|
Vivian Kobeh, Corporate Communications Director
|
Michel Morin, VP Investor Relations
|
|
+1 (786) 628-5300
|
+1 (786) 628-5270
|
|
press@millicom.com
|
investors@millicom.com
|
|
|
|
|
|
Sarah Inmon, Investor Relations Senior Manager
|
|
|
+1 (786) 628-5303
|
|
|
investors@millicom.com
|
|
Earnings Release
Q4 2020
|
|
About Millicom
Millicom (NASDAQ U.S.: TIGO,
Nasdaq Stockholm: TIGO_SDB) is a leading provider of fixed and mobile services dedicated to emerging markets in Latin America and
Africa. Millicom sets the pace when it comes to providing high-speed broadband and innovation around The Digital Lifestyle services
through its principal brand, TIGO. As of December 31, 2020, Millicom operating subsidiaries and joint ventures employed more than
21,000 people and provided mobile services to approximately 55 million customers, with a cable footprint of more than 12 million
homes passed. Founded in 1992, Millicom International Cellular S.A. is headquartered in Luxembourg.
|
Earnings Release
Q4 2020
|
|
Forward-Looking Statements
Statements included herein
that are not historical facts, including without limitation statements concerning future strategy, plans, objectives, expectations
and intentions, projected financial results, liquidity, growth and prospects, are forward-looking statements. Such forward-looking
statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties
materialize, Millicom’s results could be materially adversely affected. In particular, there is uncertainty about the spread
of the COVID-19 virus and the impact it may have on Millicom's operations, the demand for Millicom's products and services, global
supply chains and economic activity in general. The risks and uncertainties include, but are not limited to, the following:
|
|
•
|
global economic conditions and foreign exchange rate fluctuations as well as local economic conditions in the markets we serve;
|
|
|
•
|
potential disruption due to diseases, pandemics, political events, piracy or acts by terrorists, including the impact of the
recent outbreak of the COVID-19 virus and the ongoing efforts throughout the world to contain it;
|
|
|
•
|
telecommunications usage levels, including traffic and customer growth;
|
|
|
•
|
competitive forces, including pricing pressures, the ability to connect to other operators’ networks and our ability
to retain market share in the face of competition from existing and new market entrants as well as industry consolidation;
|
|
|
•
|
legal or regulatory developments and changes, or changes in governmental policy, including with respect to the availability
of spectrum and licenses, the level of tariffs, tax matters, the terms of interconnection, customer access and international settlement
arrangements;
|
|
|
•
|
adverse legal or regulatory disputes or proceedings;
|
|
|
•
|
the success of our business, operating and financing initiatives and strategies, including partnerships and capital expenditure
plans;
|
|
|
•
|
the level and timing of the growth and profitability of new initiatives, start-up costs associated with entering new markets,
the successful deployment of new systems and applications to support new initiatives;
|
|
|
•
|
relationships with key suppliers and costs of handsets and other equipment;
|
|
|
•
|
our ability to successfully pursue acquisitions, investments or merger opportunities, integrate any acquired businesses in
a timely and cost-effective manner and achieve the expected benefits of such transactions;
|
|
|
•
|
the availability, terms and use of capital, the impact of regulatory and competitive developments on capital outlays, the ability
to achieve cost savings and realize productivity improvements;
|
|
|
•
|
technological development and evolving industry standards, including challenges in meeting customer demand for new technology
and the cost of upgrading existing infrastructure;
|
|
|
•
|
the capacity to upstream cash generated in operations through dividends, royalties, management fees and repayment of shareholder
loans; and
|
|
|
•
|
other factors or trends affecting our financial condition or results of operations.
|
|
Earnings Release
Q4 2020
|
|
A further list and description
of risks, uncertainties and other matters can be found in Millicom’s Registration Statement on Form 20-F, including those
risks outlined in “Item 3. Key Information—D. Risk Factors,” and in Millicom’s subsequent U.S. Securities
and Exchange Commission filings, all of which are available at www.sec.gov. To the extent COVID-19 adversely affects Millicom's
business and financial results, it may also have the effect of heightening many of the risks described in its filings.
All forward-looking statements
attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. Readers
are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Except to
the extent otherwise required by applicable law, we do not undertake any obligation to update or revise forward-looking statements,
whether as a result of new information, future events or otherwise.
|
Earnings Release
Q4 2020
|
|
Non IFRS Measures
This press release contains
financial measures not prepared in accordance with IFRS. These measures are referred to as “non-IFRS” measures and
include: non-IFRS service revenue, non-IFRS EBITDA, and non-IFRS Capex, among others defined below. Annual growth rates for these
non-IFRS measures are often expressed in organic constant currency terms to exclude the effect of changes in foreign exchange rates,
the adoption of new accounting standards such as IFRS 16, and are proforma for material changes in perimeter due to acquisitions
and divestitures. The non-IFRS financial measures are presented in this press release as Millicom’s management believes they
provide investors with an additional information for the analysis of Millicom’s results of operations, particularly in evaluating
performance from one period to another. Millicom’s management uses non-IFRS financial measures to make operating decisions,
as they facilitate additional internal comparisons of Millicom’s performance to historical results and to competitors' results,
and provides them to investors as a supplement to Millicom’s reported results to provide additional insight into Millicom’s
operating performance. Millicom’s Remuneration Committee uses certain non-IFRS measures when assessing the performance and
compensation of employees, including Millicom’s executive directors.
The non-IFRS financial measures
used by Millicom may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by
other companies - refer to the section “Non-IFRS Financial Measure Descriptions” for additional information. In addition,
these non-IFRS measures should not be considered in isolation as a substitute for, or as superior to, financial measures calculated
in accordance with IFRS, and Millicom’s financial results calculated in accordance with IFRS and reconciliations to those
financial statements should be carefully evaluated.
Financial Measure Descriptions
Service
revenue is revenue related to the provision of ongoing services such as monthly subscription
fees, airtime and data usage fees, interconnection fees, roaming fees, mobile finance service commissions and fees from other telecommunications
services such as data services, short message services and other value-added services excluding telephone and equipment sales.
EBITDA
is operating profit excluding impairment losses, depreciation and amortization, and gains/losses on
fixed asset disposals.
EBITDA after
Leases (‘EBITDAaL’) represents EBITDA excluding lease repayments.
EBITDA Margin
represents EBITDA in relation to Revenue.
Proportionate
EBITDA is the sum of the EBITDA in every country where Millicom operates, including its
Guatemala and Honduras joint ventures, pro rata for Millicom’s ownership stake in each country, less corporate costs that
are not allocated to any country and inter-company eliminations.
Organic
growth represents year-on-year growth excluding the impact of changes in FX rates, perimeter,
and accounting. Changes in perimeter are the result of acquisitions and divestitures. Results from divested assets are immediately
removed from both periods, whereas the results from acquired assets are included in both periods at the beginning (January 1) of
the first full calendar year of ownership.
Net debt
is Debt and financial liabilities less cash and pledged deposits.
Net financial
obligations is Net debt plus lease liabilities.
Proportionate
financial obligations is the sum of the net financial obligations in every country where
Millicom operates, including its Guatemala and Honduras joint ventures, pro rata for Millicom’s ownership stake in each country.
Leverage
is the ratio of net financial obligations over LTM (last twelve month) EBITDA, proforma
for acquisitions made during the last twelve months.
|
Earnings Release
Q4 2020
|
|
Leverage
after leases is the ratio of net debt over LTM (Last twelve month) EBITDA after leases,
proforma for acquisitions made during the last twelve months.
Proportionate
leverage is the ratio of proportionate net financial obligations over LTM proportionate
EBITDA, proforma for acquisitions made during the last twelve months.
Proportionate
leverage after leases is the ratio of proportionate net debt over LTM (Last twelve month)
EBITDA after leases, proforma for acquisitions made during the last twelve months.
Capex
is balance sheet capital expenditure excluding spectrum and license costs and lease capitalizations.
Cash Capex
represents the cash spent in relation to capital expenditure, excluding spectrum and licenses costs.
Operating
Cash Flow (OCF) is EBITDA less Capex.
Operating
Free Cash Flow is OCF less changes in working capital and other non-cash items and taxes
paid.
Equity Free
Cash Flow (EFCF) is Operating Free Cash Flow less finance charges paid (net), less advances
for dividends to non-controlling interests, plus dividends received from joint ventures.
Equity Free
Cash Flow after Leases (EFCFaL) is EFCF, less lease principal repayments.
Operating
Profit After Tax displays the profit generated from the operations of the company after
statutory taxes.
Return on
Invested Capital (ROIC) is used to assess the Group’s efficiency at allocating the
capital under its control to and is defined as Operating Profit After Tax, including Guatemala and Honduras as if fully consolidated,
divided by the average invested Capital during the period.
Average
Invested Capital is the capital invested in the company operation throughout the year and
is calculated with the average of opening and closing balances of the total assets minus current liabilities (excluding debt, joint
ventures, accrued interests, deferred and current tax, cash as well as investments and non-controlling interests), less assets
and liabilities held for sale.
Underlying
measures, such as Underlying service revenue, Underlying
EBITDA, Underlying equity free cash flow, Underlying net debt, Underlying leverage, etc.,
include Guatemala and Honduras, as if fully consolidated.
Average
Revenue per User per Month (ARPU) for our Mobile customers is (x) the total mobile and
mobile financial services revenue (excluding revenue earned from tower rentals, call center, data and mobile virtual network operator,
visitor roaming, national third parties roaming and mobile telephone equipment sales revenue) for the period, divided by (y) the
average number of mobile subscribers for the period, divided by (z) the number of months in the period. We define ARPU for our
Home customers in our Latin America segment as (x) the total Home revenue (excluding equipment sales, TV advertising and equipment
rental) for the period, divided by (y) the average number of customer relationships for the period, divided by (z) the number of
months in the period. ARPU is not subject to a standard industry definition and our definition of ARPU may be different to other
industry participants.
Please refer to our
2019 Annual Report for a list and description of non-IFRS measures.
|
Earnings Release
Q4 2020
|
|
Non-IFRS Reconciliations
Reconciliation from Reported Growth to Organic
Growth for the Latam segment4
|
Latam Segment ($ millions)
|
Revenue
|
Service Revenue
|
EBITDA
|
OCF
|
|
Q4 2020
|
Q4 2019
|
Q4 2020
|
Q4 2019
|
Q4 2020
|
Q4 2019
|
Q4 2020
|
Q4 2019
|
|
A- Current period
|
1,534
|
1,577
|
1,394
|
1,442
|
634
|
636
|
276
|
273
|
|
B- Prior year period
|
1,577
|
1,381
|
1,442
|
1,263
|
636
|
514
|
273
|
167
|
|
C- Reported growth (A/B)
|
(2.7)%
|
14.2%
|
(3.4)%
|
14.2%
|
(0.2)%
|
23.7%
|
1.2%
|
63.2%
|
|
D- Accounting change impact
|
—
|
—
|
—
|
—
|
—
|
9.2%
|
—
|
36.7%
|
|
E- Change in Perimeter impact
|
—
|
14.4%
|
—
|
15.1%
|
—
|
14.9%
|
—
|
19.1%
|
|
F- FX impact
|
(2.9)%
|
(3.4)%
|
(3.0)%
|
(3.4)%
|
(2.8)%
|
(3.2)%
|
(6.4)%
|
(9.7)%
|
|
G- Other
|
—
|
0.2%
|
—
|
0.2%
|
1.5%
|
0.9%
|
3.9%
|
6.5%
|
|
H- Organic Growth (C-D-E-F-G)
|
0.2%
|
2.9%
|
(0.4)%
|
2.3%
|
1.0%
|
2.0%
|
3.7%
|
10.6%
|
|
Latam Segment ($ millions)
|
Revenue
|
Service Revenue
|
EBITDA
|
OCF
|
|
FY 2020
|
FY 2019
|
FY 2020
|
FY 2019
|
FY 2020
|
FY 2019
|
FY 2020
|
FY 2019
|
|
A- Current period
|
5,843
|
5,964
|
5,377
|
5,514
|
2,360
|
2,418
|
1,418
|
1,416
|
|
B- Prior year period
|
5,964
|
5,485
|
5,514
|
5,069
|
2,418
|
2,072
|
1,416
|
1,119
|
|
C- Reported growth (A/B)
|
(2.0)%
|
8.7%
|
(2.5)%
|
8.8%
|
(2.4)%
|
16.7%
|
0.2%
|
26.6%
|
|
D- Accounting change impact
|
—
|
—
|
—
|
—
|
—
|
8.2%
|
—
|
16.5%
|
|
E- Change in Perimeter impact
|
3.9%
|
11.0%
|
4.0%
|
11.6%
|
3.8%
|
11.9%
|
5.6%
|
11.3%
|
|
F- FX impact
|
(3.8)%
|
(5.2)%
|
(3.9)%
|
(5.2)%
|
(3.5)%
|
(5.0)%
|
(6.0)%
|
(9.3)%
|
|
G- Other
|
—
|
0.1%
|
(0.1)%
|
0.1%
|
1.0%
|
(0.5)%
|
2.1%
|
(0.3)%
|
|
H- Organic Growth (C-D-E-F-G)
|
(2.1)%
|
2.8%
|
(2.5)%
|
2.2%
|
(3.7)%
|
2.1%
|
(1.4)%
|
8.3%
|
4 See Note
5 of our Unaudited Interim Condensed Consolidated Financial Statements for details on our segments.
|
Earnings Release
Q4 2020
|
|
Reconciliation from Reported Growth to Organic
Growth for the main Latam markets
|
Service Revenue ($ millions)
|
Q4 2020
|
Q4 2019
|
Organic
|
FX
|
Accounting
|
Perimeter
|
Other
|
Reported
|
|
Guatemala
|
334
|
317
|
6.6%
|
(1.2)%
|
—
|
—
|
—
|
5.4%
|
|
Colombia
|
327
|
358
|
(1.4)%
|
(7.2)%
|
—
|
—
|
—
|
(8.7)%
|
|
Paraguay
|
128
|
140
|
(1.1)%
|
(8.0)%
|
—
|
—
|
—
|
(9.1)%
|
|
Honduras
|
136
|
139
|
(3.4)%
|
1.4%
|
—
|
—
|
0.1%
|
(2.0)%
|
|
Bolivia
|
149
|
156
|
(4.6)%
|
—
|
—
|
—
|
—
|
(4.6)%
|
|
Panama
|
144
|
154
|
(6.3)%
|
—
|
—
|
—
|
—
|
(6.3)%
|
|
El Salvador
|
95
|
87
|
9.0%
|
—
|
—
|
—
|
—
|
9.0%
|
|
Nicaragua, Costa Rica & Eliminations
|
80
|
90
|
—
|
—
|
—
|
—
|
—
|
—
|
|
Latam*
|
1,394
|
1,442
|
(0.4)%
|
(3.0)%
|
—
|
—
|
—
|
(3.4)%
|
|
EBITDA ($ millions)
|
Q4 2020
|
Q4 2019
|
Organic
|
FX
|
Accounting
|
Perimeter
|
Other
|
Reported
|
|
Guatemala
|
210
|
185
|
14.7%
|
(1.3)%
|
—
|
—
|
—
|
13.4%
|
|
Colombia
|
117
|
130
|
(2.8)%
|
(6.9)%
|
—
|
—
|
—
|
(9.7)%
|
|
Paraguay
|
63
|
72
|
(4.7)%
|
(7.7)%
|
—
|
—
|
—
|
(12.4)%
|
|
Honduras
|
67
|
72
|
(7.6)%
|
1.2%
|
—
|
—
|
0.2%
|
(6.1)%
|
|
Bolivia
|
73
|
66
|
11.6%
|
—
|
—
|
—
|
—
|
11.6%
|
|
Panama
|
64
|
73
|
(11.5)%
|
—
|
—
|
—
|
—
|
(11.5)%
|
|
El Salvador
|
44
|
40
|
9.9%
|
—
|
—
|
—
|
—
|
9.9%
|
|
Nicaragua, Costa Rica, Corp Costs & Eliminations
|
(4)
|
(1)
|
—
|
—
|
—
|
—
|
—
|
—
|
|
Latam*
|
634
|
636
|
1.0%
|
(2.8)%
|
—
|
—
|
1.5%
|
(0.2)%
|
ARPU reconciliations
|
Latam Segment - Mobile ARPU Reconciliation
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Mobile service revenue ($m)
|
837
|
859
|
3,220
|
3,258
|
|
Mobile Service revenue ($m) from non Tigo customers ($m) *
|
(10)
|
(12)
|
(36)
|
(65)
|
|
Mobile Service revenue ($m) from Tigo customers (A)
|
827
|
847
|
3,185
|
3,192
|
|
Mobile customers - end of period (000)
|
41,734
|
39,846
|
41,734
|
39,846
|
|
Mobile customers - average (000) (B) **
|
40,609
|
39,217
|
39,658
|
36,636
|
|
Mobile ARPU (USD/Month) (A/B/number of months)
|
6.8
|
7.2
|
6.7
|
7.3
|
* Refers to TV advertising, production services,
MVNO, DVNO, equipment rental revenue, call center revenue, national roaming, equipment sales, visitor roaming, tower rental, DVNE,
and other non-customer driven revenue.
** Average QoQ for the quarterly view is the average
of the last quarter.
|
Earnings Release
Q4 2020
|
|
|
Latam Segment - Home ARPU Reconciliation
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Home service revenue ($m)
|
387
|
387
|
1,509
|
1,530
|
|
Home service revenue ($m) from non Tigo customers ($m) *
|
(10)
|
(11)
|
(33)
|
(40)
|
|
Home service revenue ($m) from Tigo customers (A)
|
378
|
376
|
1,477
|
1,490
|
|
Customer Relationships - end of period (000) **
|
4,545
|
4,341
|
4,545
|
4,341
|
|
Customer Relationships - average (000) (B)
|
4,499
|
4,328
|
4,405
|
4,242
|
|
Home ARPU (USD/Month) (A/B/number of months)
|
28.0
|
29.0
|
27.9
|
29.3
|
* TV advertising, production services, equipment
rental revenue, call center revenue, equipment sales and other non customer driven revenue.
** Represented by homes connected all technologies
(HFC + Other Technologies + DTH & Wimax RGUs).
*** Average QoQ for the quarterly view is the
average of the last quarter.
One-off Summary - Items above EBITDA only
|
2020
|
Q4 2020
|
FY 2020
|
|
|
($ millions)
|
Revenue
|
EBITDA
|
Revenue
|
EBITDA
|
Comment (Q4 2020)
|
|
Latam
|
—
|
—
|
—
|
—
|
|
|
Nicaragua
|
—
|
—
|
—
|
(8)
|
|
|
Latam Total
|
—
|
—
|
—
|
(8)
|
|
|
2019
|
Q4 2019
|
FY 2019
|
|
|
($ millions)
|
Revenue
|
EBITDA
|
Revenue
|
EBITDA
|
Comment (Q4 2019)
|
|
Colombia
|
—
|
—
|
—
|
(9)
|
|
|
Paraguay
|
—
|
—
|
10
|
6
|
|
|
Latam Total
|
—
|
—
|
10
|
(3)
|
|
|
Africa
|
—
|
(3)
|
—
|
(24)
|
Tax fine
|
|
Corporate
|
—
|
(4)
|
—
|
(31)
|
Acquisition and integration costs
|
|
Total
|
—
|
(7)
|
10
|
(58)
|
|
Foreign Exchange rates used to support FX
impact calculations in the above Organic Growth reconciliations
|
|
|
Average FX rate (vs. USD)
|
End of period FX rate (vs. USD)
|
|
|
|
Q4 20
|
Q3 20
|
QoQ
|
Q4 19
|
YoY
|
|
Q4 20
|
Q3 20
|
QoQ
|
Q4 19
|
YoY
|
|
Bolivia
|
BOB
|
6.91
|
6.91
|
0.0%
|
6.91
|
0.0%
|
|
6.91
|
6.91
|
0.0%
|
6.91
|
0.0%
|
|
Colombia
|
COP
|
3,695
|
3,784
|
2.4%
|
3,413
|
(7.6)%
|
|
3,433
|
3,879
|
13.0%
|
3,277
|
(4.5)%
|
|
Costa Rica
|
CRC
|
611
|
594
|
(2.8)%
|
578
|
(5.5)%
|
|
617
|
607
|
(1.7)%
|
576
|
(6.6)%
|
|
Guatemala
|
GTQ
|
7.80
|
7.73
|
(0.8)%
|
7.71
|
(1.1)%
|
|
7.79
|
7.79
|
(0.1)%
|
7.70
|
(1.2)%
|
|
Honduras
|
HNL
|
24.36
|
24.66
|
1.2%
|
24.72
|
1.5%
|
|
24.20
|
24.53
|
1.4%
|
24.72
|
2.2%
|
|
Nicaragua
|
NIO
|
34.72
|
34.47
|
(0.7)%
|
33.70
|
(2.9)%
|
|
34.82
|
34.60
|
(0.7)%
|
33.84
|
(2.8)%
|
|
Paraguay
|
PYG
|
6,989
|
6,921
|
(1.0)%
|
6,434
|
(8.0)%
|
|
6,900
|
6,990
|
1.3%
|
6,453
|
(6.5)%
|
|
Tanzania
|
TZS
|
2,319
|
2,317
|
(0.1)%
|
2,297
|
(0.9)%
|
|
2,319
|
2,319
|
0.0%
|
2,299
|
(0.9)%
|
|
Earnings Release
Q4 2020
|
|
Reconciliation Net financial obligations to
EBITDA to Proportionate net financial obligations to EBITDA as of December 31, 2020 and December 31, 2019
|
Debt Information - December 31, 2020
|
Financial obligations
|
EBITDA
|
Leverage
|
|
$ millions
|
Gross
|
Cash
|
Net
|
|
|
|
Millicom Group (IFRS)
|
6,711
|
875
|
5,837
|
1,495
|
3.90x
|
|
Plus: Guatemala
|
642
|
187
|
455
|
778
|
|
|
Plus: Honduras
|
400
|
60
|
339
|
247
|
|
|
Less: Corporate Costs
|
—
|
—
|
—
|
(33)
|
|
|
Underlying Millicom Group (Non-IFRS)
|
7,753
|
1,122
|
6,631
|
2,487
|
2.67x
|
|
Less: 50% Minority Stake in Colombia
|
565
|
106
|
459
|
228
|
|
|
Less: 45% Minority Stake in Guatemala
|
289
|
85
|
204
|
350
|
|
|
Less: 33% Minority Stake in Honduras
|
133
|
20
|
113
|
82
|
|
|
Less: 20% Minority Stake in Panama
|
195
|
17
|
178
|
51
|
|
|
Less: 1.5% Minority Stake in Tanzania
|
6
|
—
|
6
|
2
|
|
|
Proportionate Millicom Group (Non-IFRS)
|
6,565
|
894
|
5,670
|
1,773
|
3.20x
|
|
December 31, 2019
|
Financial obligations
|
EBITDA
|
Proforma
|
|
$ millions
|
Gross
|
Cash
|
Net
|
|
Adjustments*
|
EBITDA
|
Leverage
|
|
Millicom Group (IFRS)
|
7,068
|
1,166
|
5,903
|
1,530
|
—
|
—
|
—
|
|
Plus: Guatemala
|
1,172
|
189
|
983
|
748
|
—
|
—
|
—
|
|
Plus: Honduras
|
423
|
40
|
383
|
280
|
—
|
—
|
—
|
|
Less: Corporate Costs
|
—
|
—
|
—
|
(36)
|
—
|
—
|
—
|
|
Underlying Millicom Group (Non-IFRS)
|
8,664
|
1,395
|
7,269
|
2,522
|
95
|
2,617
|
2.78x
|
|
Less: 50% Minority Stake in Colombia
|
606
|
107
|
499
|
255
|
—
|
—
|
—
|
|
Less: 45% Minority Stake in Guatemala
|
528
|
85
|
442
|
337
|
—
|
—
|
—
|
|
Less: 33% Minority Stake in Honduras
|
141
|
13
|
128
|
93
|
—
|
—
|
—
|
|
Less: 20% Minority Stake in Panama
|
208
|
12
|
196
|
45
|
13
|
—
|
—
|
|
Less: 1.5% Minority Stake in Tanzania
|
6
|
—
|
6
|
2
|
—
|
—
|
—
|
|
Proportionate Millicom Group (Non-IFRS)
|
7,175
|
1,177
|
5,998
|
1,791
|
82
|
1,873
|
3.20x
|
* Proforma adjusted EBITDA
related to mobile acquisitions in Panama.
|
Earnings Release
Q4 2020
|
|
Debt maturity profile
|
|
2021
|
2022
|
2023
|
2024
|
2025
|
2026
|
2027
|
2028
|
2029
|
>2030
|
>2031
|
|
International Bonds
|
—
|
—
|
—
|
241
|
—
|
500
|
550
|
500
|
750
|
600
|
500
|
|
Floating MIC S.A Sustainability Bond Due 2024
|
|
|
|
241
|
|
|
|
|
|
|
|
|
6.625% MIC S. A USD 500m Bond Due 2026
|
|
|
|
|
|
500
|
|
|
|
|
|
|
5.875% Telecel USD 300m Bond Due 2027
|
|
|
|
|
|
|
550
|
|
|
|
|
|
5.125% MIC S. A USD 500m Bond Due 2028
|
|
|
|
|
|
|
|
500
|
|
|
|
|
6.250% MIC S. A USD 750m Bond Due 2029
|
|
|
|
|
|
|
|
|
750
|
|
|
|
4.500% Cable Onda USD 600m Bond Due 2030
|
|
|
|
|
|
|
|
|
|
600
|
|
|
4.500% MIC S. A USD 500m Bond Due 2031
|
|
|
|
|
|
|
|
|
|
|
500
|
|
Local Bonds (Colombia, Bolivia, Paraguay & Panama)
|
44
|
61
|
113
|
114
|
125
|
126
|
4
|
2
|
15
|
32
|
37
|
|
Bank and DFI
|
69
|
79
|
366
|
493
|
707
|
35
|
169
|
48
|
119
|
49
|
(6)
|
|
Total
|
113
|
139
|
479
|
848
|
832
|
661
|
724
|
550
|
883
|
681
|
531
|
|
% of Total
|
1.8%
|
2.2%
|
7.4%
|
13.2%
|
12.9%
|
10.3%
|
11.2%
|
8.5%
|
13.7%
|
10.6%
|
8.2%
|
|
Earnings Release
Q4 2020
|
|
Capex Reconciliation
|
Capex Reconciliation
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Consolidated:
|
|
|
|
|
|
Additions to property, plant and equipment
|
261
|
260
|
649
|
719
|
|
Additions to licenses and other intangibles
|
23
|
75
|
520
|
202
|
|
Of which spectrum and license costs
|
(6)
|
36
|
421
|
101
|
|
Total consolidated additions
|
284
|
335
|
1,169
|
921
|
|
Of which capital expenditures related to corporate offices
|
1
|
6
|
7
|
13
|
|
Latin America Segment
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Additions to property, plant and equipment
|
317
|
314
|
816
|
879
|
|
Additions to licenses and other intangibles
|
36
|
113
|
629
|
240
|
|
Of which spectrum and license costs
|
(6)
|
64
|
504
|
117
|
|
Latin America Segment total additions (Underlying)
|
352
|
427
|
1,445
|
1,119
|
|
Capex excluding spectrum and license costs
|
358
|
363
|
941
|
1,002
|
|
Africa Segment
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Additions to property, plant and equipment
|
13
|
20
|
41
|
42
|
|
Additions to licenses and other intangibles
|
—
|
—
|
—
|
12
|
|
Of which spectrum and license costs
|
—
|
—
|
—
|
12
|
|
Africa Segment total additions
|
13
|
20
|
41
|
54
|
|
Capex excluding spectrum and license costs
|
13
|
20
|
41
|
42
|
|
Underlying Capex
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Latam capex excluding spectrum and license cost
|
358
|
363
|
941
|
1,002
|
|
Africa capex excluding spectrum and license cost
|
13
|
20
|
41
|
42
|
|
Capital expenditures related to corporate offices
|
1
|
6
|
7
|
13
|
|
Underlying capex excluding spectrum and license costs
|
372
|
389
|
989
|
1,056
|
|
Earnings Release
Q4 2020
|
|
Operating Free Cash Flow Reconciliation
|
Cash Flow Data
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Net cash provided by operating activities
|
296
|
269
|
821
|
801
|
|
Purchase of property, plant and equipment
|
(182)
|
(210)
|
(622)
|
(736)
|
|
Proceeds from sale of property, plant and equipment
|
3
|
4
|
9
|
24
|
|
Purchase of intangible assets and licenses
|
(1)
|
(26)
|
(202)
|
(171)
|
|
Proceeds from sale of intangible assets
|
—
|
—
|
—
|
—
|
|
Net purchase/proceeds for property, plant and equipment and intangible assets
|
(179)
|
(232)
|
(815)
|
(882)
|
|
(Less) Proceeds from sale of towers part of sale and leaseback transactions
|
—
|
(1)
|
—
|
(22)
|
|
(Less) Purchase of spectrum and licenses
|
6
|
16
|
101
|
59
|
|
(Less) Finance charges paid, net
|
135
|
123
|
551
|
470
|
|
Operating free cash flow
|
257
|
173
|
657
|
425
|
|
Earnings Release
Q4 2020
|
|
Equity Free Cash Flow Reconciliation
|
Cash Flow Data
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Net cash provided by operating activities
|
296
|
269
|
821
|
801
|
|
Purchase of property, plant and equipment
|
(182)
|
(210)
|
(622)
|
(736)
|
|
Proceeds from sale of property, plant and equipment
|
3
|
4
|
9
|
24
|
|
Proceeds from sale of towers part of tower sale and leaseback transactions
|
—
|
(1)
|
—
|
(22)
|
|
Purchase of intangible assets
|
(1)
|
(26)
|
(202)
|
(171)
|
|
Proceeds from sale of intangible assets
|
—
|
—
|
—
|
—
|
|
Purchase of spectrum and licenses
|
6
|
16
|
101
|
59
|
|
Finance charges paid, net
|
135
|
123
|
551
|
470
|
|
Operating free cash flow
|
257
|
173
|
657
|
425
|
|
Interest (paid), net
|
(135)
|
(123)
|
(551)
|
(470)
|
|
Free cash flow
|
122
|
51
|
106
|
(45)
|
|
Dividends received from joint ventures (Guatemala and Honduras)
|
4
|
56
|
71
|
237
|
|
Dividends paid to non-controlling interests
|
—
|
—
|
(5)
|
(13)
|
|
Equity free cash flow
|
126
|
106
|
172
|
179
|
|
Lease Principal Repayments
|
(33)
|
(25)
|
(116)
|
(107)
|
|
Equity free cash flow after leases
|
93
|
81
|
56
|
73
|
OCF (EBITDA- Capex) Reconciliation
|
Latam OCF Underlying
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Latam EBITDA
|
634
|
636
|
2,360
|
2,418
|
|
(-) Capex (Ex. Spectrum)
|
358
|
363
|
941
|
1,002
|
|
Latam OCF
|
276
|
273
|
1,418
|
1,416
|
|
Africa OCF
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Africa EBITDA
|
34
|
33
|
125
|
117
|
|
(-) Capex (Ex. Spectrum)
|
13
|
20
|
41
|
42
|
|
Africa OCF
|
21
|
13
|
84
|
75
|
|
Corporate OCF
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Corporate EBITDA
|
4
|
3
|
2
|
(13)
|
|
(-) Capex (Ex. Spectrum)
|
1
|
6
|
7
|
13
|
|
Corporate OCF
|
3
|
(4)
|
(5)
|
(25)
|
|
Underlying OCF
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Underlying EBITDA
|
672
|
672
|
2,487
|
2,522
|
|
(-) Capex (Ex. Spectrum)
|
372
|
389
|
989
|
1,056
|
|
Underlying OCF
|
300
|
283
|
1,497
|
1,466
|
|
Earnings Release
Q4 2020
|
|
Interest Expense Reconciliation
|
Interest ($ millions)
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Interest expense
|
(88)
|
(90)
|
(366)
|
(336)
|
|
Finance Leases
|
(40)
|
(44)
|
(156)
|
(157)
|
|
Loan Redemption expense
|
(15)
|
—
|
(15)
|
(10)
|
|
Other
|
(25)
|
(23)
|
(87)
|
(60)
|
|
Total financial expenses
|
(168)
|
(157)
|
(624)
|
(564)
|
|
Interest income
|
5
|
5
|
13
|
20
|
|
Net financial expenses
|
(163)
|
(152)
|
(611)
|
(544)
|
|
Underlying Interest ($ millions)
|
Q4 2020
|
Q4 2019
|
FY 2020
|
FY 2019
|
|
Interest expense
|
(100)
|
(113)
|
(453)
|
(428)
|
|
Finance Leases
|
(46)
|
(51)
|
(183)
|
(186)
|
|
Loan Redemption expense
|
(15)
|
—
|
(33)
|
(10)
|
|
Other
|
(16)
|
(19)
|
(83)
|
(55)
|
|
Total financial expenses
|
(177)
|
(182)
|
(752)
|
(680)
|
|
Interest income
|
6
|
9
|
22
|
33
|
|
Net financial expenses
|
(172)
|
(173)
|
(730)
|
(647)
|
|
Earnings Release
Q4 2020
|
|
Guatemala and Honduras Financial Information
(unaudited)
Until 2015, Millicom group
results included Guatemala and Honduras on a 100% consolidation basis. Since 2016, these businesses are treated as joint ventures
and are consolidated using the equity method. To aid investors to better track the evolution of the company’s performance
over time, we provide the following indicative unaudited financial statement data for the Millicom group as if our Guatemala and
Honduras joint ventures had been fully consolidated.
|
Income statement data Q4 2020
|
Millicom (IFRS)
|
Guatemala and Honduras JVs
|
Eliminations
|
Underlying (non-IFRS)
|
|
($millions)
|
|
Revenue
|
1,088
|
541
|
—
|
1,629
|
|
Cost of sales
|
(284)
|
(123)
|
—
|
(407)
|
|
Gross profit
|
804
|
418
|
—
|
1,222
|
|
Operating expenses
|
(405)
|
(146)
|
—
|
(550)
|
|
EBITDA
|
399
|
273
|
—
|
672
|
|
EBITDA margin
|
36.7%
|
50.4%
|
—
|
41.2%
|
|
Depreciation & amortization
|
(304)
|
(113)
|
—
|
(416)
|
|
Share of net profit in joint ventures
|
71
|
—
|
(71)
|
—
|
|
Other operating income (expenses), net
|
(43)
|
(1)
|
(4)
|
(48)
|
|
Operating profit
|
123
|
158
|
(75)
|
207
|
|
Net financial expenses
|
(163)
|
(9)
|
—
|
(172)
|
|
Other non-operating income (expenses), net
|
41
|
4
|
—
|
45
|
|
Gains (losses) from associates
|
—
|
—
|
—
|
—
|
|
Profit (loss) before tax
|
1
|
153
|
(75)
|
80
|
|
Net tax credit (charge)
|
(54)
|
(29)
|
—
|
(83)
|
|
Profit (loss) for the period
|
(53)
|
124
|
(75)
|
(3)
|
|
Non-controlling interests
|
—
|
(54)
|
—
|
(53)
|
|
Profit (loss) from discontinued operations
|
(3)
|
—
|
—
|
(3)
|
|
Net profit (loss) for the period
|
(56)
|
71
|
(75)
|
(60)
|
|
Earnings Release
Q4 2020
|
|
|
Income statement data FY 2020
|
Millicom (IFRS)
|
Guatemala and Honduras JVs
|
Eliminations
|
Underlying (non-IFRS)
|
|
($millions)
|
|
Revenue
|
4,171
|
2,035
|
—
|
6,206
|
|
Cost of sales
|
(1,171)
|
(483)
|
—
|
(1,654)
|
|
Gross profit
|
3,000
|
1,552
|
—
|
4,552
|
|
Operating expenses
|
(1,505)
|
(560)
|
—
|
(2,065)
|
|
EBITDA
|
1,495
|
992
|
—
|
2,487
|
|
EBITDA margin
|
35.8%
|
48.7%
|
—
|
40.1%
|
|
Depreciation & amortization
|
(1,208)
|
(453)
|
—
|
(1,661)
|
|
Share of net profit in joint ventures
|
171
|
—
|
(171)
|
—
|
|
Other operating income (expenses), net
|
(12)
|
(3)
|
(4)
|
(18)
|
|
Operating profit
|
446
|
536
|
(175)
|
807
|
|
Net financial expenses
|
(611)
|
(119)
|
—
|
(730)
|
|
Other non-operating income (expenses), net
|
(106)
|
(3)
|
—
|
(109)
|
|
Gains (losses) from associates
|
(1)
|
—
|
—
|
(1)
|
|
Profit (loss) before tax
|
(271)
|
413
|
(175)
|
(33)
|
|
Net tax credit (charge)
|
(102)
|
(102)
|
—
|
(204)
|
|
Profit (loss) for the period
|
(373)
|
311
|
(175)
|
(237)
|
|
Non-controlling interests
|
41
|
(140)
|
—
|
(99)
|
|
Profit (loss) from discontinued operations
|
(12)
|
—
|
—
|
(12)
|
|
Net profit (loss) for the period
|
(344)
|
171
|
(175)
|
(348)
|
|
Earnings Release
Q4 2020
|
|
|
Balance Sheet data ($ millions)
|
Millicom IFRS
|
Guatemala and Honduras JVs
|
Underlying (non-IFRS)
|
|
Assets
|
|
|
|
|
Intangible assets, net
|
3,403
|
2,837
|
6,240
|
|
Property, plant and equipment, net
|
2,755
|
874
|
3,629
|
|
Right of Use Assets
|
895
|
272
|
1,167
|
|
Investments in joint ventures and associates
|
2,665
|
(2,642)
|
24
|
|
Other non-current assets
|
396
|
(35)
|
361
|
|
Total non-current assets
|
10,114
|
1,307
|
11,421
|
|
Inventories, net
|
37
|
35
|
72
|
|
Trade receivables, net
|
351
|
91
|
442
|
|
Other current assets
|
845
|
145
|
990
|
|
Restricted cash
|
199
|
19
|
219
|
|
Cash and cash equivalents
|
875
|
247
|
1,122
|
|
Total current assets
|
2,307
|
537
|
2,844
|
|
Assets held for sale
|
1
|
—
|
1
|
|
Total assets
|
12,422
|
1,844
|
14,266
|
|
|
|
|
|
|
Equity and liabilities
|
|
|
|
|
Equity attributable to owners of the Company
|
2,059
|
(54)
|
2,005
|
|
Non-controlling interests
|
215
|
482
|
697
|
|
Total equity
|
2,274
|
428
|
2,703
|
|
Debt and financing
|
6,475
|
1,008
|
7,483
|
|
Other non-current liabilities
|
1,065
|
159
|
1,224
|
|
Total non-current liabilities
|
7,540
|
1,167
|
8,707
|
|
Debt and financing
|
236
|
34
|
270
|
|
Other current liabilities
|
2,371
|
215
|
2,586
|
|
Total current liabilities
|
2,608
|
249
|
2,856
|
|
Liabilities directly associated with assets held for sale
|
—
|
—
|
—
|
|
Total liabilities
|
10,148
|
1,416
|
11,563
|
|
Total equity and liabilities
|
12,422
|
1,844
|
14,266
|
|
Earnings Release
Q4 2020
|
|
|
Cash Flow Data
|
Millicom IFRS
|
Guatemala and Honduras JVs
|
Underlying (non-IFRS)
|
|
($millions)
|
|
Profit (loss) before taxes from continuing operations
|
(271)
|
238
|
(33)
|
|
Profit (loss) for the period from discontinued operations
|
(12)
|
—
|
(12)
|
|
Profit (loss) before taxes
|
(283)
|
238
|
(45)
|
|
Net cash provided by operating activities (incl. discontinued ops)
|
821
|
764
|
1,585
|
|
Net cash used in investing activities (incl. discontinued ops)
|
(495)
|
(451)
|
(945)
|
|
Net cash from (used by) financing activities (incl. discontinued ops)
|
(598)
|
(294)
|
(891)
|
|
Exchange impact on cash and cash equivalents, net
|
(17)
|
(2)
|
(19)
|
|
Net (decrease) increase in cash and cash equivalents
|
(289)
|
18
|
(271)
|
|
Cash and cash equivalents at the beginning of the period
|
1,164
|
229
|
1,393
|
|
Effect of cash in disposal group held for sale
|
—
|
—
|
—
|
|
Cash and cash equivalents at the end of the period
|
875
|
247
|
1,122
|
Regulatory Statement
This information was
prior to this release inside information and is information that Millicom is obliged to make public pursuant to the EU Market Abuse
Regulation. This information was submitted for publication, through the agency of the contact person set out above, at 11:00 CET
on February 11, 2021.
Item 2
Unaudited
Interim
Condensed Consolidated
Financial Statements
For
the three-month period and year ended
December 31, 2020
February 11, 2021
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
Unaudited interim condensed consolidated statement
of income for the three-month period and year ended December 31, 2020
|
in millions of U.S. dollars except per share data
|
Notes
|
Twelve months ended December 31, 2020
|
Twelve months ended December 31, 2019
|
Three months ended December 31, 2020
|
Three months ended December 31, 2019
|
|
Continuing Operations
|
|
|
|
|
|
|
Revenue
|
5
|
4,171
|
4,336
|
1,088
|
1,150
|
|
Cost of sales
|
|
(1,171)
|
(1,201)
|
(284)
|
(311)
|
|
Gross profit
|
|
3,000
|
3,135
|
804
|
839
|
|
Operating expenses
|
|
(1,505)
|
(1,604)
|
(405)
|
(415)
|
|
Depreciation
|
3
|
(890)
|
(825)
|
(230)
|
(213)
|
|
Amortization
|
|
(318)
|
(275)
|
(74)
|
(84)
|
|
Share of profit in the joint ventures in Guatemala and Honduras
|
15
|
171
|
179
|
71
|
42
|
|
Other operating income (expenses), net
|
12, 14
|
(12)
|
(34)
|
(43)
|
(41)
|
|
Operating profit
|
5
|
446
|
575
|
123
|
129
|
|
Interest and other financial expenses
|
10
|
(624)
|
(564)
|
(168)
|
(157)
|
|
Interest and other financial income
|
|
13
|
20
|
5
|
5
|
|
Other non-operating (expenses) income, net
|
6
|
(106)
|
227
|
41
|
309
|
|
Profit (loss) from other joint ventures and associates, net
|
|
(1)
|
(40)
|
—
|
(9)
|
|
Profit (loss) before taxes from continuing operations
|
|
(271)
|
218
|
1
|
277
|
|
Tax (charge) credit, net
|
|
(102)
|
(120)
|
(54)
|
(31)
|
|
Profit (loss) from continuing operations
|
|
(373)
|
97
|
(53)
|
246
|
|
Profit (loss) from discontinued operations, net of tax
|
4
|
(12)
|
57
|
(3)
|
(3)
|
|
Net profit (loss) for the period
|
|
(385)
|
154
|
(56)
|
242
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
Owners of the Company
|
|
(344)
|
149
|
(56)
|
223
|
|
Non-controlling interests
|
|
(41)
|
5
|
—
|
20
|
|
|
|
|
|
|
|
|
(Loss)/Earnings per common share for net profit/ (loss) attributable to the owners of the Company:
|
|
|
|
|
|
|
Basic and Diluted ($ per share) (i)
|
7
|
(3.40)
|
1.48
|
(0.55)
|
2.20
|
|
|
(i)
|
There are no dilutive potential ordinary shares
|
The accompanying notes are an integral part of
these unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
Unaudited interim condensed consolidated statement
of comprehensive income for the three-month period and year ended December 31, 2020
|
in millions of U.S. dollars
|
Twelve months ended December 31, 2020
|
Twelve months ended December 31, 2019
|
Three months ended December 31, 2020
|
Three months ended December 31, 2019
|
|
Net profit (loss) for the period
|
(385)
|
154
|
(56)
|
242
|
|
Other comprehensive income (to be reclassified to statement of income in subsequent periods), net of tax:
|
|
|
|
|
|
Exchange differences on translating foreign operations
|
(19)
|
(4)
|
63
|
32
|
|
Change in value of cash flow hedges, net of tax effects
|
(1)
|
(16)
|
3
|
2
|
|
Other comprehensive income (not to be reclassified to statement of income in subsequent periods), net of tax:
|
|
|
|
|
|
Remeasurements of post-employment benefit obligations, net of tax effects
|
(2)
|
—
|
(2)
|
—
|
|
Total comprehensive income (loss) for the period
|
(407)
|
133
|
8
|
276
|
|
|
|
|
|
|
|
Attributable to
|
|
|
|
|
|
Owners of the Company
|
(360)
|
131
|
(4)
|
274
|
|
Non-controlling interests
|
(48)
|
3
|
12
|
3
|
|
|
|
|
|
|
|
Total comprehensive income for the period arises from:
|
|
|
|
|
|
Continuing operations
|
(395)
|
76
|
11
|
279
|
|
Discontinued operations
|
(12)
|
57
|
(3)
|
(3)
|
The accompanying notes are an integral part of
these unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
Unaudited interim condensed consolidated statement
of financial position as at December 31, 2020
|
in millions of U.S. dollars
|
Notes
|
December 31, 2020
|
December 31, 2019(i)
|
|
ASSETS
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
|
Intangible assets, net
|
9
|
3,403
|
3,195
|
|
Property, plant and equipment, net
|
8
|
2,755
|
2,899
|
|
Right of use assets
|
|
895
|
1,012
|
|
Investments in joint ventures
|
15
|
2,642
|
2,797
|
|
Investments in associates
|
|
24
|
25
|
|
Contract costs, net
|
|
5
|
5
|
|
Deferred tax assets
|
|
197
|
200
|
|
Derivative financial instruments
|
13
|
27
|
—
|
|
Amounts due from non-controlling interests, associates and joint ventures
|
12
|
90
|
39
|
|
Other non-current assets
|
|
77
|
66
|
|
TOTAL NON-CURRENT ASSETS
|
|
10,114
|
10,238
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
Inventories
|
|
37
|
32
|
|
Trade receivables, net
|
2
|
351
|
371
|
|
Contract assets, net
|
|
31
|
41
|
|
Amounts due from non-controlling interests, associates and joint ventures
|
12
|
206
|
29
|
|
Prepayments and accrued income
|
|
149
|
156
|
|
Current income tax assets
|
|
96
|
119
|
|
Supplier advances for capital expenditure
|
|
21
|
22
|
|
Equity investments
|
14
|
160
|
371
|
|
Other current assets
|
|
181
|
192
|
|
Restricted cash
|
|
199
|
155
|
|
Cash and cash equivalents
|
|
875
|
1,164
|
|
TOTAL CURRENT ASSETS
|
|
2,307
|
2,652
|
|
Assets held for sale
|
4
|
1
|
5
|
|
TOTAL ASSETS
|
|
12,422
|
12,895
|
|
|
(i)
|
Restated for finalization of purchase accounting for
Nicaragua and Panama acquisitions (see note 3).
|
The accompanying notes are an integral part of
these unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
Unaudited interim condensed consolidated statement
of financial position as at December 31, 2020 (continued)
|
in millions of U.S. dollars
|
Notes
|
December 31, 2020
|
December 31, 2019(i)
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
EQUITY
|
|
|
|
|
Share capital and premium
|
|
630
|
633
|
|
Treasury shares
|
|
(30)
|
(51)
|
|
Other reserves
|
|
(562)
|
(544)
|
|
Retained profits
|
|
2,365
|
2,222
|
|
Profit (loss) for the period attributable to equity holders
|
|
(344)
|
149
|
|
Equity attributable to owners of the Company
|
|
2,059
|
2,410
|
|
Non-controlling interests
|
|
215
|
271
|
|
TOTAL EQUITY
|
|
2,274
|
2,680
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
|
Debt and financing
|
10
|
5,578
|
5,786
|
|
Lease liabilities
|
10
|
897
|
988
|
|
Derivative financial instruments
|
13
|
14
|
17
|
|
Amounts due to non-controlling interests, associates and joint ventures
|
12
|
29
|
337
|
|
Payables and accruals for capital expenditure
|
9
|
485
|
61
|
|
Provisions and other non-current liabilities
|
|
328
|
322
|
|
Deferred tax liabilities
|
|
209
|
285
|
|
TOTAL NON-CURRENT LIABILITIES
|
|
7,540
|
7,797
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
Debt and financing
|
10
|
113
|
186
|
|
Lease liabilities
|
10
|
123
|
107
|
|
Put option liability
|
13
|
262
|
264
|
|
Derivative financial instruments
|
|
1
|
—
|
|
Payables and accruals for capital expenditure
|
|
345
|
348
|
|
Other trade payables
|
|
334
|
289
|
|
Amounts due to non-controlling interests, associates and joint ventures
|
12
|
311
|
161
|
|
Accrued interest and other expenses
|
|
445
|
432
|
|
Current income tax liabilities
|
|
71
|
75
|
|
Contract liabilities
|
|
90
|
82
|
|
Provisions and other current liabilities
|
|
511
|
474
|
|
TOTAL CURRENT LIABILITIES
|
|
2,608
|
2,417
|
|
Liabilities directly associated with assets held for sale
|
4
|
—
|
—
|
|
TOTAL LIABILITIES
|
|
10,148
|
10,215
|
|
TOTAL EQUITY AND LIABILITIES
|
|
12,422
|
12,895
|
|
|
(i)
|
Restated for the finalization of purchase accounting
for Nicaragua and Panama acquisitions (see note 3).
|
The accompanying notes are an integral part of
these unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
Unaudited interim condensed consolidated statement
of cash flows for the year ended December 31, 2020
|
in millions of U.S. dollars
|
Notes
|
December 31, 2020
|
December 31, 2019
|
|
Cash flows from operating activities (including discontinued operations)
|
|
|
|
|
Profit (loss) before taxes from continuing operations
|
|
(271)
|
218
|
|
Profit (loss) before taxes from discontinued operations
|
4
|
(12)
|
59
|
|
Profit (loss) before taxes
|
|
(283)
|
276
|
|
Adjustments to reconcile to net cash:
|
|
|
|
|
Interest expense on leases
|
|
156
|
157
|
|
Interest expense on debt and other financing
|
|
468
|
408
|
|
Interest and other financial income
|
|
(13)
|
(20)
|
|
Adjustments for non-cash items:
|
|
|
|
|
Depreciation and amortization
|
5
|
1,208
|
1,111
|
|
Share of net profit in Guatemala and Honduras joint ventures
|
|
(171)
|
(179)
|
|
(Gain) on disposal and impairment of assets, net
|
4, 14
|
20
|
(40)
|
|
Share based compensation
|
|
24
|
30
|
|
Loss from other joint ventures and associates, net
|
|
1
|
40
|
|
Other non-cash non-operating (income) expenses, net
|
6
|
106
|
(227)
|
|
Changes in working capital:
|
|
|
|
|
Decrease (increase) in trade receivables, prepayments and other current assets, net
|
|
(43)
|
(119)
|
|
Decrease (increase) in inventories
|
|
(6)
|
11
|
|
Increase (decrease) in trade and other payables, net
|
|
40
|
(61)
|
|
Increase (decrease) in contract assets, liabilities and costs, net
|
|
8
|
(2)
|
|
Total changes in working capital
|
|
(2)
|
(172)
|
|
Interest paid on leases
|
|
(151)
|
(141)
|
|
Interest paid on debt and other financing
|
|
(411)
|
(344)
|
|
Interest received
|
|
11
|
15
|
|
Taxes paid
|
5
|
(142)
|
(114)
|
|
Net cash provided by operating activities
|
|
821
|
801
|
|
Cash flows from (used in) investing activities (including discontinued operations):
|
|
|
|
|
Acquisition of subsidiaries, joint ventures and associates, net of cash acquired
|
3
|
10
|
(1,014)
|
|
Proceeds from disposal of subsidiaries and associates, net of cash disposed
|
4
|
10
|
111
|
|
Purchase of intangible assets and licenses
|
9
|
(202)
|
(171)
|
|
Purchase of property, plant and equipment
|
8
|
(622)
|
(736)
|
|
Proceeds from sale of property, plant and equipment
|
8
|
9
|
24
|
|
Proceeds from disposal of equity investments, net of costs
|
14
|
197
|
25
|
|
Dividends and dividend advances received from joint ventures
|
15
|
71
|
237
|
|
Cash (used in) provided by other investing activities, net
|
|
32
|
20
|
|
Net cash used in investing activities
|
|
(495)
|
(1,502)
|
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
|
Unaudited interim condensed consolidated statement of cash flows for the year ended December 31, 2020 (continued)
|
|
|
|
|
|
|
Cash flows from financing activities (including discontinued operations):
|
|
|
|
|
Proceeds from debt and other financing
|
10
|
1,470
|
2,900
|
|
Repayment of debt and other financing
|
10
|
(1,744)
|
(1,157)
|
|
Loan advance to joint venture
|
12
|
(193)
|
—
|
|
Lease capital repayment
|
|
(116)
|
(107)
|
|
Advances and dividends paid to non-controlling interests
|
|
(5)
|
(13)
|
|
Share repurchase program
|
|
(10)
|
—
|
|
Dividends paid to owners of the Company
|
|
—
|
(268)
|
|
Net cash provided by (used in) financing activities
|
|
(598)
|
1,355
|
|
Exchange impact on cash and cash equivalents, net
|
|
(17)
|
(8)
|
|
Net (decrease) increase in cash and cash equivalents
|
|
(289)
|
645
|
|
Cash and cash equivalents at the beginning of the year
|
|
1,164
|
528
|
|
Effect of cash in disposal group held for sale
|
4
|
—
|
(9)
|
|
Cash and cash equivalents at the end of the year
|
|
875
|
1,164
|
The accompanying notes are an integral part of
these unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
Unaudited interim condensed consolidated statements
of changes in equity for the years ended December 31, 2020 and December 31, 2019
|
in millions of U.S. dollars
|
Number of shares (000’s)
|
Number of shares held by the Group (000’s)
|
Share capital
|
Share premium
|
Treasury shares
|
Retained profits (i)
|
Other reserves
|
Total
|
Non- controlling interests
|
Total equity
|
|
Balance on December 31, 2018
|
101,739
|
(914)
|
153
|
482
|
(81)
|
2,525
|
(538)
|
2,542
|
251
|
2,792
|
|
Total comprehensive income for the year
|
—
|
—
|
—
|
—
|
—
|
149
|
(19)
|
131
|
3
|
133
|
|
Dividends (ii)
|
—
|
—
|
—
|
—
|
—
|
(267)
|
—
|
(267)
|
—
|
(267)
|
|
Dividends to non controlling interest
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(1)
|
(1)
|
|
Purchase of treasury shares(iii)
|
—
|
(132)
|
—
|
—
|
(12)
|
4
|
—
|
(8)
|
—
|
(8)
|
|
Share based compensation
|
—
|
—
|
—
|
—
|
—
|
—
|
29
|
29
|
1
|
30
|
|
Issuance of shares under share-based payment schemes
|
—
|
465
|
—
|
(2)
|
41
|
(12)
|
(25)
|
1
|
—
|
1
|
|
Effect of restructuring in Tanzania
|
—
|
—
|
—
|
—
|
—
|
(27)
|
9
|
(18)
|
18
|
—
|
|
Balance on December 31, 2019
|
101,739
|
(581)
|
153
|
480
|
(51)
|
2,372
|
(544)
|
2,409
|
271
|
2,680
|
|
Total comprehensive income for the period
|
—
|
—
|
—
|
—
|
—
|
(344)
|
(15)
|
(360)
|
(48)
|
(407)
|
|
Dividends
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
Dividends to non controlling interests
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(8)
|
(8)
|
|
Purchase of treasury shares (iii)
|
—
|
(467)
|
—
|
—
|
(19)
|
3
|
—
|
(16)
|
—
|
(16)
|
|
Share based compensation
|
—
|
—
|
—
|
—
|
—
|
—
|
24
|
24
|
—
|
24
|
|
Issuance of shares under share-based payment schemes
|
—
|
521
|
—
|
(2)
|
40
|
(11)
|
(26)
|
1
|
—
|
1
|
|
Balance on December 31, 2020
|
101,739
|
(526)
|
153
|
478
|
(30)
|
2,020
|
(562)
|
2,059
|
215
|
2,274
|
|
|
(i)
|
Retained profits – includes profit for the year attributable to equity holders, of which at December 31, 2020, $310
million (2019: $306 million; 2018: $324 million) are not distributable to equity holders.
|
|
|
(ii)
|
Dividends - A dividend distribution of $2.64 per share was approved by the Annual General Meeting of shareholders on May
2, 2019 and paid in equal portions in May and November 2019.
|
|
|
(iii)
|
During the year ended December 31, 2020, Millicom repurchased 350,000 shares for a total amount of $10 million and withheld
approximately 117,000 shares for settlement of tax obligations (2019: 132,162 ) on behalf of employees under share-based compensation
plans.
|
The accompanying notes are an integral part of
these unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
Notes to the unaudited interim condensed consolidated
statements
1. GENERAL
Millicom International Cellular S.A. (the
“Company” or “MIC SA”), a Luxembourg Société Anonyme, and its subsidiaries, joint ventures
and associates (the “Group” or “Millicom”) is a provider of cable and mobile services dedicated to emerging
markets in Latin America and Africa. Millicom provides high speed broadband and innovation around The Digital Lifestyle® services
through its principal brand, TIGO.
On February 10, 2021, the Board of Directors
authorized these unaudited interim condensed consolidated financial statements for issuance.
2. SUMMARY OF ACCOUNTING POLICIES
These interim condensed consolidated financial
statements of the Group are unaudited. They are presented in US dollars ($) and have been prepared in accordance with International
Accounting Standard (“IAS”) 34 ‘Interim Financial Reporting’ as issued by the International Accounting
Standards Board ("IASB") and as adopted by the European Union ("EU"). In the opinion of management, these unaudited
interim condensed consolidated financial statements reflect all adjustments that are necessary for a proper presentation of the
results for interim periods. Millicom’s operations are not affected by significant seasonal or cyclical patterns.
These unaudited interim condensed consolidated
financial statements should be read in conjunction with the audited consolidated financial statements for the period ended December
31, 2019, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued
by the IASB and in conformity with IFRS as adopted by the EU. These financial statements are prepared in accordance with consolidation
and accounting policies consistent with the December 31, 2019 consolidated financial statements, except for the changes described
below.
We have made rounding adjustments to reach some
of the figures included in these unaudited interim condensed consolidated financial statements. Accordingly, numerical figures
shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them and percentage calculations
using these adjusted figures may not result in the same percentage values as are shown in these unaudited interim condensed consolidated
financial statements.
|
|
II.
|
COVID-19 - Qualitative and quantitative assessment on business activities, financial situation and economic performance
|
On March 11, 2020, the World
Health Organization declared the coronavirus outbreak a pandemic. Most countries globally, including a majority of the countries
where Millicom operates, reacted by implementing severe restrictions on travel and public gatherings, including the closing of
offices, businesses, schools, retail stores and other public venues, and by instituting curfews or quarantines. These restrictions,
as well as the dangers posed by the virus, produced a significant reduction in mobility and a severe disruption in global economic
activity, the effect of which was felt in our markets beginning in mid-March 2020.
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
Impact on Millicom's
markets and business
Most governments in Millicom's markets implemented
restrictions beginning in mid-March, with some gradual relaxation of measures beginning in late May and continuing throughout 2020.
In some countries, temporary restrictions were re-imposed toward the end of 2020 in order to contain a second wave of infection.
The re-opening of the economies had a significant
impact on our prepaid mobile business, which began to recover in May and has continued to see gradual improvement since then. In
postpaid mobile, the pace of recovery has been much slower. The Group's residential cable business has proven more resilient; revenue
growth has decelerated but remained positive since the onset of the pandemic, and we have resumed normal service to many customers
who had temporarily benefited from the free "lifeline" services. Finally, revenue from business-to-business "B2B"
customers remained depressed in Q4, as many small and mid-sized businesses struggle to cope with the health and economic crises.
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
2. SUMMARY OF ACCOUNTING
POLICIES (Continued)
|
|
II.
|
COVID-19 - Qualitative and quantitative assessment on business activities, financial situation
and economic performance (continued)
|
Impact of the crisis
on accounting matters
As a consequence of this crisis, Millicom identified
potential significant accounting implications in the following areas:
• Impairment
of non-financial assets/goodwill/investments in joint ventures
As a result of
this crisis, Millicom has noticed reduced economic activity across the countries where it operates, and its operations have been
suffering lower revenues, EBITDA and margins, which might have indicated potential impairments.
In the second
half of the year, our operations have shown encouraging signs of recovery and are actually over performing the forecasts used by
management to carry out the impairment test as of June 30, 2020. The discount rates have also significantly decreased since the
declaration of the outbreak and they have gradually returned to pre-pandemic levels. There were therefore no such indicators requiring
management to carry out another impairment test for the second half of the year. With that said, in accordance with IFRS, management
carried out its annual goodwill impairment test during the fourth quarter of 2020, using the Group's latest forecasts and again
concluded that no impairment should be recorded in the Group Consolidated Financial Statements.
|
|
•
|
Impairment of trade receivables
|
During Q2 2020,
and as a result of worsening collections, the Group had recognised additional bad debt provisions for an amount of $32 million
compared to the level of provisions recorded during Q1 2020 (pre-pandemic level) and $33 million compared to Q2 2019. However,
collections have significantly improved during the second half of 2020 and bad debt levels have returned to their pre-pandemic
level comparing to Q1 2020. As of December 31, 2020, the total bad debt provision is close to 100% of the receivables overdue by
more than 90 days.
For countries
restricted from disconnecting non paying customers at the beginning of the pandemic , such as El Salvador and Bolivia, the Group
established a policy whereby operations stopped recognizing revenue after a certain number of invoices remained unpaid (usually
3 invoices - as these customers would be disconnected after 3 unpaid invoices in normal circumstances). The Group believed it was
unlikely that it would collect the overdue invoiced amounts from these subscribers i.e. the 'Covid subscribers'. From that moment
onwards after consideration of the guidance under IFRS 15.13, for 'Covid subscribers' the Group had only recognized revenue up
to an amount equal to the consideration (cash) as and when received. Noteworthy, all our operations were finally allowed to apply
free "lifeline" services for non-paying customers, with El Salvador and Bolivia being the latest to be able to apply
it as from mid-2020.
As mentioned above,
our markets and operations showed encouraging signs of recovery, and therefore any unrecognized revenue during second half of 2020
has been offset with the invoicing effect of prior unrecognized revenue. For the year ended December 31, 2020, the Group invoiced
but unrecognized revenue amounts to $3.9 million.
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
|
|
III.
|
New and amended IFRS standards
|
The following changes to standards effective
for annual periods starting on January 1, 2020 have been adopted by the Group and did not have any significant impact on the Group’s
accounting policies or disclosures and did not require retrospective adjustments:
|
|
•
|
Amendments to the conceptual framework. The IASB has revised its conceptual framework.
|
|
|
•
|
Amendments to IAS 1, ‘Presentation of financial statements’, and IAS 8, ‘Accounting policies, changes in
accounting estimates and errors’.
|
|
|
•
|
Amendments to IFRS 9, IAS 39 and IFRS 7 - Interest Rate Benchmark Reform (Phase 1). This amendment provides certain reliefs
in relation to interest rate benchmark reforms. The reliefs relate to hedge accounting and have the effect that the reforms should
not generally cause hedge accounting to terminate. However, any hedge ineffectiveness should continue to be recorded in the income
statement.
|
|
|
•
|
Amendments to IFRS 3 - definition of a business. This amendment revises the definition of a business.
|
2. SUMMARY OF ACCOUNTING POLICIES (Continued)
|
|
•
|
Amendment to IFRS 16, 'Leases' - COVID 19 Rent Concessions - effective for annual periods starting on June 1, 2020. This amendment
provides an optional practical expedient for lessees from assessing whether a rent concession related to COVID-19 is a lease modification.
Lessees can elect to account for such rent concessions in the same way as they would if they were not lease modifications. In many
cases, this will result in accounting for the concession as variable lease payments in the period(s) in which the event or condition
that triggers the reduced payment occurs.
|
The following changes to standards not yet effective
are not expected to materially affect the Group:
|
|
•
|
Amendments to IFRS 4 'Insurance contracts' (deferral of effective date of IFRS 9) - effective for annual periods starting on
January 1, 2021- These amendments extend the effective date to apply IFRS 9 for insurance contracts to January 1, 2023 in order
to align with the effective date of IFRS 7. These amendments will not have an impact for the Group.
|
|
|
•
|
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reform - Phase 2 - effective for annual
periods starting on January 1, 2021. The amendments provide temporary reliefs which address the financial reporting effects when
an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate.
|
Main reliefs provided by
the Phase 2 amendments relate to:
|
|
◦
|
Changes to contractual cash flows: That is, when changing the basis for determining contractual cash flows for financial assets
and liabilities required by the reform will not result in an immediate gain or loss in the income statement but on an update of
the effective interest rate (or an update in the discount rate to remeasure the lease liability as a result of the IBOR reform),
and;
|
|
|
◦
|
Hedge accounting: That is, allowing hedge relationships that are directly affected by the reform to continue, though additional
effectiveness might need to be recorded.
|
The Group has inventoried financial
assets or liabilities (including lease liabilities), as well as hedging instruments, with IBOR features and concluded that it will
not be significantly exposed to this reform. As a result, it does not expect any material effects on its consolidated financial
statements from the reform and these amendments.
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
|
|
◦
|
IFRS 3 'Business Combinations' - Reference to Conceptual Framework
|
|
|
◦
|
IAS 16 'Property, Plant and Equipment' - Proceeds before intended use
|
|
|
◦
|
IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' - Cost of fulfilling a contract
|
|
|
◦
|
Annual improvements to IFRS Standards 2018-2020, affecting IFRS 1, IFRS 9, IFRS 16 and IAS 41
|
All of these amendments are effective
for annual periods starting on January 1, 2022. These amendments have not yet been endorsed by the EU.
|
|
•
|
Amendments to IAS 1, 'Presentation of Financial Statements' - effective for annual periods starting on January 1, 2023- This
amendment clarifies that liabilities are classified as either current or non-current, depending on the rights that exist at the
end of the reporting period. The amendment also clarifies what IAS 1 means when it refers to the ‘settlement’ of a
liability. This amendment has not yet been endorsed by the EU.
|
|
|
•
|
IFRS 17, ‘Insurance contracts’, including amendments - effective for annual periods starting on January 1, 2023-
IFRS 17 will not have an impact for the Group. IFRS 17 has not been yet endorsed by the EU.
|
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
3. ACQUISITION AND DISPOSAL OF SUBSIDIARIES,
JOINT VENTURES, ASSOCIATES AND OTHER NON-CONTROLLING INTERESTS
Acquisitions 2020
There were no material acquisitions in 2020.
Acquisitions 2019
On February 20, 2019, MIC S.A., Telefonica Centroamerica
and Telefonica S.A. entered into 3 separate share purchase agreements (the “Telefonica CAM Acquisitions”) pursuant
to which, subject to the terms and conditions contained therein, Millicom agreed to purchase 100% of the shares of Telefonica Moviles
Panama, S.A., a company incorporated under the laws of Panama, from Telefonica Centroamerica (the “Panama Acquisition”),
100% of the shares of Telefonica de Costa Rica TC, S.A., a company incorporated under the laws of Costa Rica, from Telefonica (the
“Costa Rica Acquisition”) and 100% of the shares of Telefonia Celular de Nicaragua, S.A., a company incorporated under
the laws of Nicaragua, from Telefonica Centroamerica (the “Nicaragua Acquisition”). While Millicom completed both acquisitions
in Nicaragua and Panama, it announced on May 2, 2020 that it had terminated the Share Purchase Agreement in relation to the Costa
Rica Acquisition (see note 11). The aggregate purchase price for the Telefonica Panama and Nicaragua Acquisitions was $1.08 billion,
which has been subject to purchase price adjustments.
Finalization of the purchase accounting had an
effect on the following financial position line items as of December 31, 2019:
|
|
|
Impact of finalization/update of purchase accounting of
|
|
|
|
(in millions of U.S. dollars)
|
December 31, 2019
|
Nicaragua
|
Panama
|
December 31, 2019
|
Reason for the change
|
|
As reported
|
Restated
|
|
STATEMENT OF FINANCIAL POSITION
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Intangible assets, net
|
3,219
|
(4)
|
(20)
|
3,195
|
(i)
|
|
Property, plant and equipment, net
|
2,883
|
—
|
17
|
2,899
|
(ii)
|
|
Right-of-use asset (non-current)
|
977
|
—
|
34
|
1,012
|
(ii)
|
|
Other current assets
|
181
|
4
|
7
|
192
|
(iii)
|
|
LIABILITIES
|
|
|
|
|
|
|
Lease liabilities (non-current)
|
967
|
—
|
22
|
988
|
(ii)
|
|
Lease liabilities (current)
|
97
|
—
|
11
|
107
|
(ii)
|
|
Deferred tax liabilities
|
279
|
—
|
6
|
285
|
(iv)
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Retained profits
|
2,222
|
|
|
2,222
|
|
|
Non-controlling interests
|
271
|
|
|
271
|
|
|
|
(i)
|
Impact on goodwill resulting from the adjustments
explained below for Nicaragua and Panama.
|
|
|
(ii)
|
See Panama section below. Mainly relates to lease
accounting policy alignment, final property, plant and equipment step-up and final purchase price adjustment.
|
|
|
(iii)
|
See Nicaragua
and Panama section below. Reflects the final price adjustment agreed for Nicaragua and Panama.
|
|
|
(iv)
|
Deferred tax
impact of these previously explained adjustments.
|
The impact of the finalization of Nicaragua and
Panama's purchase accounting on the 2019 Group statement of income is immaterial. Therefore, no adjustments were made in that respect
on comparative figures.
Further details of Nicaragua and Panama acquisitions
are provided below.
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
3. ACQUISITION AND DISPOSAL OF SUBSIDIARIES,
JOINT VENTURES, ASSOCIATES AND OTHER NON-CONTROLLING INTERESTS (Continued)
Nicaragua Acquisition
This transaction closed on May 16, 2019 after
receipt of the necessary approvals and, since that date, Millicom holds all voting rights in Telefonia Celular de Nicaragua ("Nicaragua")
and controls it. On the same day, Millicom paid cash consideration of $437 million, which was adjusted to $430 million as of December
31, 2019 and finally adjusted to $426 million. For the purchase accounting, Millicom determined the final fair values of Nicaragua's
identifiable assets and liabilities based on transaction and relative fair values. The purchase accounting was finalized by May
16, 2020 and has not materially changed since December 31, 2019, with the exception of the final price adjustment.
The final purchase accounting and differences
compared to the provisional fair values reported as at December 31, 2019 are shown below:
|
|
Provisional Fair values (100%)
|
Final Fair values (100%)
|
Differences
|
|
(in millions of U.S. dollars)
|
|
|
|
|
Intangible assets (excluding goodwill) (i)
|
131
|
131
|
—
|
|
Property, plant and equipment (ii)
|
149
|
149
|
—
|
|
Right of use assets (iii)
|
131
|
131
|
—
|
|
Other non-current assets
|
2
|
2
|
—
|
|
Current assets (excluding cash) (iv)
|
23
|
23
|
—
|
|
Trade receivables (v)
|
17
|
17
|
—
|
|
Cash and cash equivalents
|
7
|
7
|
—
|
|
Total assets acquired
|
459
|
459
|
—
|
|
Lease liabilities (iii)
|
131
|
131
|
—
|
|
Other liabilities (vi)
|
118
|
118
|
—
|
|
Total liabilities assumed
|
249
|
249
|
—
|
|
Fair value of assets acquired and liabilities assumed, net
|
210
|
210
|
—
|
|
Acquisition price
|
430
|
426
|
(4)
|
|
Goodwill
|
220
|
216
|
(4)
|
|
|
(i)
|
Intangible assets not previously recognized at the
date of acquisition, are mainly customer lists for an amount of $81 million, with estimated useful lives ranging from 4 to 10
years. In addition, a fair value step-up of $39 million on the spectrum held by Nicaragua has been recognized, with a remaining
useful life of 14 years.
|
|
|
(ii)
|
A fair value step-up of $39 million has been recognized
on property, plant and equipment, mainly on the core network ($25 million) and owned buildings ($8 million). The expected remaining
useful lives were estimated at 6-7 years on average.
|
|
|
(iii)
|
The Group measured the lease liability at the present
value of the remaining lease payments (as defined in IFRS 16) as if the acquired lease were a new lease at the acquisition date.
The right-of-use assets have been adjusted by $7 million to be measured at the same amount as the lease liabilities.
|
|
|
(iv)
|
Current assets include indemnification assets for
tax contingencies at fair value for an amount of $11 million - see (vi) below.
|
|
|
(v)
|
The fair value of trade receivables acquired was $17
million.
|
|
|
(vi)
|
Other liabilities include the fair value of certain
possible tax contingent liabilities for $1 million and a deferred tax liability of $50 million resulting from the above adjustments
|
Panama Acquisition
This transaction closed on August 29, 2019 after
receipt of the necessary approvals and, since that date, Cable Onda, which is 80% owned by Millicom, holds all voting rights in
Grupo de Comunicaciones Digitales, S.A. ("Panama") and controls it. On the same day, Cable Onda paid a cash consideration
of $594 million to acquire 100% of the shares of Panama, finally adjusted to $587 million during Q3 2020. No non-controlling interests
are recognized at acquisition date as Cable Onda acquired 100% of the shares of Panama. However, non-controlling interests are
recognized in Panama's results from the date of acquisition.
For the purchase accounting, Millicom determined
the fair value of Panama's identifiable assets and liabilities based on transaction and relative fair values. During Q2 and Q3
2020, the Group completed the policy alignment and evaluation in respect of the right-of-use assets and lease liabilities, and
the property plant and equipment, as well as their related effect on the final valuation of the fixed assets. The related effects
of these adjustments are shown in the table below.
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
3. ACQUISITION AND DISPOSAL OF SUBSIDIARIES,
JOINT VENTURES, ASSOCIATES AND OTHER NON-CONTROLLING INTERESTS (Continued)
The final purchase accounting and differences
compared to the provisional fair values reported as at December 31, 2019 are shown below:
|
|
Provisional Fair values (100%)
|
Final Fair values (100%)
|
Differences
|
|
(in millions of U.S. dollars)
|
|
|
|
|
Intangible assets (excluding goodwill) (i)
|
178
|
182
|
4
|
|
Property, plant and equipment (ii)
|
110
|
127
|
17
|
|
Right of use assets (iii)
|
47
|
81
|
34
|
|
Other non-current assets
|
3
|
3
|
—
|
|
Current assets (excluding cash)
|
23
|
23
|
—
|
|
Trade receivables (iv)
|
21
|
21
|
—
|
|
Cash and cash equivalents
|
10
|
10
|
—
|
|
Total assets acquired
|
391
|
446
|
55
|
|
Lease liabilities
|
48
|
81
|
33
|
|
Other debt and financing
|
74
|
74
|
—
|
|
Other liabilities (v)
|
101
|
107
|
6
|
|
Total liabilities assumed
|
224
|
262
|
39
|
|
Fair value of assets acquired and liabilities assumed, net
|
167
|
184
|
16
|
|
Acquisition price
|
594
|
587
|
(7)
|
|
Goodwill
|
426
|
403
|
(23)
|
|
|
(i)
|
Intangible assets not previously recognized at the
date of acquisition, are mainly customer lists for an amount of $55 million, with estimated useful lives ranging from 3 to 17
years. In addition, a fair value step-up of $7 million on the spectrum held by Panama has been recognized, with a remaining useful
life of 17 years. Finally, a fair value step-up of $3 million has been recognised on certain software.
|
|
|
(ii)
|
A fair value step-up of $17 million has been
recognized on property, plant and equipment, mainly on the core network ($11 million) and owned land and buildings ($4 million).
The expected remaining useful lives were estimated at 3 to 8 years.
|
|
|
(iii)
|
The accounting policy alignment resulted in an increase
in the right-of-use assets and lease liabilities of approximately $30 million. Subsequently, the right-of-use assets have
been adjusted by $4 million to be measured at the same amount as the lease liabilities.
|
|
|
(iv)
|
The fair value of trade receivables acquired was $21
million.
|
|
|
(v)
|
Other liabilities include a deferred tax liability
of $21 million resulting from the above adjustments
|
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
4. DISCONTINUED OPERATIONS AND ASSETS HELD
FOR SALE
Summary
Financial information relating to discontinued
operations for the three-month period and year ended December 31, 2019 are set out below. The figures shown below are after inter-company
eliminations. 2019 figures include Chad only. There have been no significant movements in 2020 except for those events disclosed
at the bottom of the following tables.
|
Results from Discontinued Operations ($ millions)
|
Twelve months
ended
December 31,
2019
|
Three months
ended
December 31,
2019
|
|
Revenue
|
50
|
—
|
|
Cost of sales
|
(14)
|
—
|
|
Operating expenses
|
(29)
|
—
|
|
Depreciation and amortization
|
(11)
|
—
|
|
Other operating income (expenses), net
|
—
|
—
|
|
Gain/(loss) on disposal of discontinued operations
|
74
|
—
|
|
Other expenses linked to the disposal of discontinued operations
|
(10)
|
(3)
|
|
Operating profit (loss)
|
61
|
(3)
|
|
Interest income (expense), net
|
(2)
|
—
|
|
Other non-operating (expenses) income, net
|
—
|
—
|
|
Profit (loss) before taxes
|
59
|
(3)
|
|
Credit (charge) for taxes, net
|
(2)
|
—
|
|
Net profit/(loss) from discontinuing operations
|
57
|
(3)
|
|
Cash flows from discontinued operations ($ millions)
|
Twelve months
ended
December 31,
2019
|
|
Cash from (used in) operating activities, net
|
(8)
|
|
Cash from (used in) investing activities, net
|
5
|
|
Cash from (used in) financing activities, net
|
7
|
|
Net cash inflows/(outflows)
|
5
|
Rwanda
On January 31, 2018, Millicom completed the sale
of its Rwanda operations to subsidiaries of Bharti Airtel Limited for cash consideration of $51 million. The consideration included
a deferred cash payment of $17 million, which was received in Q1 2020.
Chad
In August 2020, the Group and the buyer of our
operations in Chad agreed on a final price adjustment of $8 million in favor of the buyer. This price adjustment was disbursed
in September 2020 and recorded under the results from discontinued operations in the Group's statement of income.
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
5. SEGMENT INFORMATION
Management determines operating and reportable
segments based on information used by the chief operating decision maker (CODM) to make strategic and operational decisions from
both a business and geographic perspective. The Group’s risks and rates of return are predominantly affected by operating
in different geographical regions. The Group has businesses in two main regions: Latin America (“Latam”) and Africa.
The Latam figures below include Honduras and Guatemala as if they are fully consolidated by the Group, as this reflects the way
management reviews and uses internally reported information to make decisions. Honduras and Guatemala are shown under the Latam
segment. The joint venture in Ghana is not reported as if fully consolidated.
As from January 1, 2020, Millicom is allocating
corporate costs to each segment based on their contribution to underlying revenue, and only non-recurring costs, such as the M&A-related
fees incurred in 2019, will remain unallocated going forward. This change in presentation has no impact on Group EBITDA.
In order to facilitate comparisons of December
31, 2020 figures with prior periods, comparative figures have been re-presented to conform with this new segment EBITDA reporting.
Revenue, operating profit (loss), EBITDA and
other segment information for the three- and twelve-month periods ended December 31, 2020 and 2019, are as follows:
Twelve months ended December 31, 2020
(in millions of U.S. dollars)
|
Latin America
|
Africa
|
Unallocated
|
Guatemala and Honduras(vii)
|
Eliminations and
Transfers
|
Total
|
|
Mobile revenue
|
3,220
|
357
|
—
|
(1,461)
|
—
|
2,116
|
|
Cable and other fixed services revenue
|
2,097
|
8
|
—
|
(302)
|
(1)
|
1,803
|
|
Other revenue
|
60
|
1
|
—
|
(6)
|
(2)
|
52
|
|
Service revenue (i)
|
5,377
|
366
|
—
|
(1,769)
|
(4)
|
3,971
|
|
Telephone and equipment and other revenue (i)
|
466
|
—
|
—
|
(266)
|
—
|
201
|
|
Revenue
|
5,843
|
366
|
—
|
(2,035)
|
(4)
|
4,171
|
|
Operating profit (loss)
|
803
|
36
|
(32)
|
(536)
|
175
|
446
|
|
Add back:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
1,561
|
89
|
11
|
(453)
|
—
|
1,208
|
|
Share of profit in joint ventures in Guatemala and Honduras
|
—
|
—
|
—
|
—
|
(171)
|
(171)
|
|
Other operating income (expenses), net
|
(5)
|
—
|
23
|
(3)
|
(4)
|
12
|
|
EBITDA (ii)
|
2,360
|
125
|
2
|
(992)
|
—
|
1,495
|
|
EBITDA from discontinued operations
|
—
|
(4)
|
—
|
—
|
—
|
(4)
|
|
EBITDA incl discontinued operations
|
2,360
|
121
|
2
|
(992)
|
—
|
1,491
|
|
Capital expenditure (iii)
|
(926)
|
(42)
|
(4)
|
258
|
—
|
(714)
|
|
Changes in working capital and others (iv)
|
61
|
11
|
(7)
|
(43)
|
—
|
22
|
|
Taxes paid
|
(260)
|
(10)
|
(2)
|
131
|
—
|
(142)
|
|
Operating free cash flow (v)
|
1,234
|
80
|
(11)
|
(645)
|
—
|
657
|
|
Total Assets (vi)
|
13,418
|
926
|
4,052
|
(5,116)
|
(859)
|
12,422
|
|
Total Liabilities
|
8,878
|
959
|
3,342
|
(2,044)
|
(987)
|
10,148
|
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
5. SEGMENT INFORMATION (Continued)
Twelve months ended December 31, 2019
(in millions of U.S. dollars)
|
Latin America
|
Africa
|
Unallocated
|
Guatemala and Honduras (vii)
|
Eliminations and transfers
|
Total
|
|
Mobile revenue
|
3,258
|
372
|
—
|
(1,480)
|
—
|
2,150
|
|
Cable and other fixed services revenue
|
2,197
|
9
|
—
|
(277)
|
—
|
1,928
|
|
Other revenue
|
60
|
1
|
—
|
(9)
|
—
|
51
|
|
Service revenue (i)
|
5,514
|
382
|
—
|
(1,766)
|
—
|
4,130
|
|
Telephone and equipment revenue (i)
|
449
|
—
|
—
|
(243)
|
—
|
206
|
|
Revenue
|
5,964
|
382
|
—
|
(2,010)
|
—
|
4,336
|
|
Operating profit (loss)
|
980
|
19
|
(64)
|
(540)
|
179
|
575
|
|
Add back:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
1,435
|
99
|
9
|
(444)
|
—
|
1,100
|
|
Share of profit in joint ventures in Guatemala and Honduras
|
—
|
—
|
—
|
—
|
(179)
|
(179)
|
|
Other operating income (expenses), net
|
2
|
(2)
|
42
|
(8)
|
—
|
34
|
|
EBITDA (ii)
|
2,418
|
117
|
(13)
|
(992)
|
—
|
1,530
|
|
EBITDA from discontinued operations
|
—
|
(3)
|
—
|
—
|
—
|
(3)
|
|
EBITDA incl discontinued operations
|
2,418
|
114
|
(13)
|
(992)
|
—
|
1,527
|
|
Capital expenditure (iii)
|
(1,040)
|
(58)
|
(9)
|
261
|
—
|
(846)
|
|
Changes in working capital and others (iv)
|
(86)
|
14
|
(52)
|
(18)
|
—
|
(143)
|
|
Taxes paid
|
(225)
|
(10)
|
(8)
|
129
|
—
|
(114)
|
|
Operating free cash flow (v)
|
1,067
|
59
|
(82)
|
(619)
|
—
|
425
|
|
Total Assets (vi)
|
13,859
|
936
|
3,715
|
(5,465)
|
(150)
|
12,895
|
|
Total Liabilities
|
8,413
|
909
|
3,977
|
(2,119)
|
(965)
|
10,215
|
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
5. SEGMENT INFORMATION (Continued)
|
Three months ended December 31, 2020 (in millions of U.S. dollars)
|
Latin America
|
Africa
|
Unallocated
|
Guatemala and Honduras (vii)
|
Eliminations and transfers
|
Total
|
|
|
|
|
|
|
|
|
|
Mobile revenue
|
837
|
95
|
—
|
(384)
|
—
|
548
|
|
Cable and other fixed services revenue
|
539
|
2
|
—
|
(80)
|
—
|
461
|
|
Other revenue
|
17
|
—
|
—
|
(1)
|
(1)
|
15
|
|
Service revenue (i)
|
1,394
|
97
|
—
|
(465)
|
(1)
|
1,024
|
|
Telephone and equipment revenue (i)
|
140
|
—
|
—
|
(76)
|
—
|
64
|
|
Revenue
|
1,534
|
97
|
—
|
(541)
|
(1)
|
1,088
|
|
Operating profit (loss)
|
238
|
13
|
(44)
|
(159)
|
75
|
123
|
|
Add back:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
392
|
22
|
3
|
(113)
|
—
|
304
|
|
Share of profit in joint ventures in Guatemala and Honduras
|
—
|
—
|
—
|
—
|
(71)
|
(71)
|
|
Other operating income (expenses), net
|
5
|
(1)
|
44
|
(1)
|
(5)
|
43
|
|
EBITDA (ii)
|
634
|
34
|
4
|
(273)
|
—
|
399
|
|
EBITDA from discontinued operations
|
—
|
(3)
|
—
|
—
|
—
|
(3)
|
|
EBITDA incl discontinued operations
|
634
|
31
|
4
|
(273)
|
—
|
396
|
|
Capital expenditure (iii)
|
(234)
|
(10)
|
3
|
68
|
—
|
(174)
|
|
Changes in working capital and others (iv)
|
47
|
9
|
17
|
(4)
|
—
|
68
|
|
Taxes paid
|
(65)
|
(2)
|
(1)
|
34
|
—
|
(34)
|
|
Operating free cash flow (v)
|
382
|
28
|
23
|
(175)
|
—
|
257
|
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
5. SEGMENT INFORMATION (Continued)
Three months ended December 31, 2019
(in millions of U.S. dollars)
|
Latin America
|
Africa
|
Unallocated
|
Guatemala and Honduras (vii)
|
Eliminations and transfers
|
Total
|
|
|
|
|
|
|
|
|
|
Mobile revenue
|
859
|
95
|
—
|
(376)
|
—
|
579
|
|
Cable and other fixed services revenue
|
559
|
2
|
—
|
(71)
|
—
|
490
|
|
Other revenue
|
23
|
—
|
—
|
(4)
|
—
|
19
|
|
Service revenue (i)
|
1,442
|
98
|
—
|
(451)
|
—
|
1,088
|
|
Telephone and equipment revenue (i)
|
135
|
—
|
—
|
(73)
|
—
|
61
|
|
Revenue
|
1,577
|
98
|
—
|
(525)
|
—
|
1,150
|
|
Operating profit (loss)
|
246
|
6
|
(33)
|
(132)
|
42
|
129
|
|
Add back:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
379
|
28
|
3
|
(112)
|
—
|
297
|
|
Share of profit in joint ventures in Guatemala and Honduras
|
—
|
—
|
—
|
—
|
(42)
|
(42)
|
|
Other operating income (expenses), net
|
11
|
—
|
33
|
(3)
|
—
|
41
|
|
EBITDA (ii)
|
636
|
33
|
3
|
(247)
|
—
|
424
|
|
EBITDA from discontinued operations
|
—
|
(3)
|
—
|
—
|
—
|
(3)
|
|
EBITDA incl discontinued operations
|
636
|
30
|
3
|
(247)
|
—
|
421
|
|
Capital expenditure (iii)
|
(264)
|
(22)
|
(5)
|
72
|
—
|
(218)
|
|
Changes in working capital and others (iv)
|
(19)
|
(4)
|
37
|
(3)
|
—
|
10
|
|
Taxes paid
|
(78)
|
(2)
|
(1)
|
41
|
—
|
(40)
|
|
Operating free cash flow (v)
|
275
|
2
|
33
|
(137)
|
—
|
173
|
|
|
(i)
|
Service revenue is Group revenue related to the provision
of ongoing services such as monthly subscription fees, airtime and data usage fees, interconnection fees, roaming fees, mobile
finance service commissions and fees from other telecommunications services such as data services, SMS and other value-added services
excluding telephone and equipment sales. Revenues from other sources comprises rental, sub-lease rental income and other non-recurring
revenues. The Group derives revenue from the transfer of goods and services over time and at a point in time. Refer to the table
below.
|
|
|
(ii)
|
EBITDA is operating profit excluding impairment losses,
depreciation and amortization and gains/losses on the disposal of fixed assets. EBITDA is used by the management to monitor the
segmental performance and for capital management.
|
|
|
(iii)
|
Excluding spectrum and licenses of $101 million (2019:
$59 million) and cash received on tower deals of nil (2019: $22 million).
|
|
|
(iv)
|
‘Changes in working capital and others’
include changes in working capital as stated in the cash flow statement as well as share based payments expense and non-cash bonuses.
|
|
|
(v)
|
Operating Free Cash Flow is EBITDA less cash capex
(excluding spectrum and license costs) less change in working capital, other non-cash items (share-based payment expense and non-cash
bonuses) and taxes paid.
|
|
|
(vi)
|
Segment assets include goodwill and other intangible
assets.
|
|
|
(vii)
|
Including eliminations for Guatemala and Honduras
as reported in the Latin America segment.
|
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
5. SEGMENT INFORMATION (Continued)
Revenue from contracts with customers from continuing
operations
|
|
|
Twelve months
ended
December 31,
2020
|
Twelve months
ended
December 31,
2019
|
Three months
ended
December 31,
2020
|
Three months
ended
December 31,
2019
|
|
in millions of U.S. dollars
|
Timing of revenue recognition
|
Latin America
|
Africa
|
Total Group
|
Latin America
|
Africa
|
Total Group
|
Latin America
|
Africa
|
Total Group
|
Latin America
|
Africa
|
Total Group
|
|
Mobile
|
Over time
|
1,728
|
239
|
1,967
|
1,747
|
261
|
2,007
|
445
|
62
|
507
|
476
|
66
|
542
|
|
Mobile Financial Services
|
Point in time
|
31
|
118
|
149
|
31
|
112
|
143
|
9
|
33
|
41
|
8
|
29
|
37
|
|
Cable and other fixed services
|
Over time
|
1,794
|
8
|
1,803
|
1,919
|
9
|
1,928
|
458
|
2
|
460
|
488
|
2
|
490
|
|
Other
|
Over time
|
51
|
1
|
52
|
51
|
1
|
52
|
15
|
—
|
16
|
19
|
—
|
19
|
|
Service Revenue
|
|
3,604
|
366
|
3,971
|
3,748
|
382
|
4,130
|
927
|
97
|
1,024
|
991
|
98
|
1,088
|
|
Telephone and equipment
|
Point in time
|
201
|
—
|
201
|
206
|
—
|
206
|
64
|
—
|
64
|
61
|
—
|
61
|
|
Revenue from contracts with customers
|
|
3,805
|
366
|
4,171
|
3,954
|
382
|
4,336
|
991
|
97
|
1,088
|
1,052
|
98
|
1,150
|
6. OTHER NON-OPERATING (EXPENSES) INCOME,
NET
The Group’s other non-operating (expenses)
income, net comprised the following:
|
in millions of U.S. dollars
|
Twelve months
ended
December 31,
2020
|
Twelve months
ended
December 31,
2019
|
Three months
ended
December 31,
2020
|
Three months
ended
December 31,
2019
|
|
Change in fair value of derivatives (Note 13)
|
(11)
|
—
|
(6)
|
—
|
|
Change in fair value in investment in Jumia (Note 14)
|
(18)
|
(38)
|
—
|
(6)
|
|
Change in fair value in investment in HT (Note 14)
|
(16)
|
312
|
5
|
312
|
|
Change in value of call option and put option liability (Note 13)
|
5
|
(25)
|
(3)
|
(7)
|
|
Exchange gains (losses), net
|
(69)
|
(32)
|
44
|
7
|
|
Other non-operating income (expenses), net
|
3
|
10
|
1
|
2
|
|
Total
|
(106)
|
227
|
41
|
309
|
7. EARNINGS PER COMMON SHARE
Earnings per common share (EPS) attributable
to owners of the Company are comprised as follows:
|
in millions of U.S. dollars
|
Twelve months
ended
December 31,
2020
|
Twelve months
ended
December 31,
2019(i)
|
Three months
ended
December 31,
2020
|
Three months
ended
December 31,
2019
|
|
Basic and Diluted
|
|
|
|
|
|
Net profit (loss) attributable to equity holders from continuing operations
|
(332)
|
93
|
(52)
|
226
|
|
Net profit (loss) attributable to equity holders from discontinued operations
|
(12)
|
57
|
(3)
|
(3)
|
|
Net profit/(loss) attributable to all equity holders to determine the basic earnings (loss) per share
|
(344)
|
149
|
(56)
|
223
|
|
|
|
|
|
|
|
in thousands
|
|
|
|
|
|
Weighted average number of ordinary shares for basic and diluted earnings per share
|
101,172
|
101,144
|
101,201
|
101,148
|
|
|
|
|
|
|
|
in U.S. dollars
|
|
|
|
|
|
Basic and diluted
|
|
|
|
|
|
EPS from continuing operations attributable to owners of the Company
|
(3.28)
|
0.92
|
(0.52)
|
2.23
|
|
EPS from discontinued operations attributable to owners of the Company
|
(0.12)
|
0.56
|
(0.03)
|
(0.03)
|
|
EPS for the period attributable to owners of the Company
|
(3.40)
|
1.48
|
(0.55)
|
2.20
|
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
8. PROPERTY, PLANT AND EQUIPMENT
During the year ended December 31, 2020, Millicom
added property, plant and equipment for $649 million (December 31, 2019: $719 million) and received $9 million from disposal of
property, plant and equipment (December 31, 2019: $24 million).
9. INTANGIBLE ASSETS
During the year ended December 31, 2020, Millicom
added intangible assets for $520 million of which $421 million related to acquisition of spectrum and licenses, and $99 million
to additions of other intangible assets (December 31, 2019: $101 million and $101 million, respectively ) and did not receive any
proceeds from disposal of intangible assets (December 31, 2019: nil).
In December 2019, Telemovil El Salvador S.A.
de C.V. ('Telemovil') acquired 50Mhz spectrum in the AWS band and paid an advance of $14 million. On January 8, 2020, Telemovil
made a final payment of $20 million and started using the spectrum.
In December 2019, Tigo Colombia participated
in an auction launched by the Ministerio de Tecnologias de la Informacion y las Comunicaciones (MINTIC), and acquired licenses
granting the right to use a total of 40 MHz in the 700 MHz band. The 20-year license will expire in 2040. As a result of this auction,Tigo
Colombia has strengthened its spectrum position, which also includes 55 MHz in the 1900 band and 30 MHz of AWS. Tigo Colombia agreed
to a total notional consideration of COP 2.45 billion (equivalent to approximately US$710 million using the December 31, 2020 exchange
rate), of which approximately 55% will be payable in cash and 45% in coverage obligations to be met by 2025.
An initial payment of approximately $33 million
was made in Q2 2020, with the remainder payable in 12 annual installments beginning in 2026 and ending in 2037. The 55% cash portion
bears interest at the Colombia-10 years Treasury Bond rate. In April and May 2020, local management received permission to operate
40 Mhz in the 700 MHz band and accounted for the spectrum at an amount of $388 million corresponding to the net present value of
the future payments, plus other costs directly attributable to this acquisition. The related future interest commitments will be
recognized as interest expense over the next 17 years. The remaining 45% consideration due as coverage obligations are currently
being estimated and will be recognized in the statement of financial position as incurred.
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
10. FINANCIAL OBLIGATIONS
A. Debt and financing
The most significant movements in debt and financing
for the year ended December 31, 2020 were as follows:
Luxembourg
On October 27, 2020 Millicom completed the issuance
of its 4.5% $500 million senior notes due 2031 in a private offering, following its proposed offering announcement dated October
19, 2020. The proceeds have been used to redeem, on October 29, 2020, Millicom’s 6.0% senior notes due 2025 (the “2025
Notes”) at a redemption price equal to 103% of the principal amount, plus accrued and unpaid interest. The early redemption
premium amounted to $15 million and the remaining unamortized deferred costs to $7 million. Theses were recognized under "Interest
and other financial expenses " in the Group's statement of income.
On October 15, 2020, Millicom entered into a
5 year, $600 million ESG-linked revolving credit facility (the "Facility") with a syndicate of 11 commercial banks. This
facility is used to refinance Millicom's existing multi-currency revolving credit facility which was due to expire in 2022 and
for general corporate purposes.
On November 17, 2020, Millicom fully repaid the
$300 million facility with DNB/Nordea which was initially due on 2024.
El Salvador
On June 29, 2020, Telemovil El Salvador, S.A
de C.V. repaid in its entirety $150 million of the principal under a credit agreement dated as of January 12, 2018 entered into
with the Bank of Nova Scotia, as lender, and the Company as guarantor.
Honduras
On June 1, 2020, Honduras Cellular executed a
$32 million bank loan agreement in equivalent amount in local currency for a10 year term.
Costa Rica
On June 29, 2020 Millicom Cable Costa Rica S.A.
partially repaid an amount of $30 million towards its $150 million syndicated credit agreement dated as of April 13, 2018, and
guaranteed by the Company.
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
Bolivia
On December 16, 2020, Millicom's operation in
Bolivia issued a BOB 345 million (approximately $49 million using the exchange rate as of December 31, 2020) senior notes due 2026.
Paraguay
On May 4, 2020, Telefónica Celular del
Paraguay, S.A.E. ("Telecel"), completed the acquisition of another Millicom subsidiary in Paraguay - Mobile Cash Paraguay
S.A , and further on June 30, 2020, the acquisition of Servicios y Productos Multimedios S.A.. Effective as of those dates, these
new entities now form part of the borrower's group for purposes of the $550 million 5.875% Senior Notes due 2027 issued by Telecel.
Also, as of July 7, 2020 Servicios y Productos Multimedios S.A. became guarantor of the 5.875% Notes due 2027.
On December 16, 2020, Telecel executed a credit
agreement with Banco Continental S.A.E.C.A. for PYG 200 billion (approximately $29 million using the exchange rate as of December
31, 2020) with a duration of 2.5 years. Main aim is to refinance outstanding bank loans with maturities from 2021 to 2023.
Guatemala
On June 19, 2020, Comunicaciones Celulares, S.A.
("Comcel") entered into a credit agreement with Banco Industrial for GTQ 500 million (approximately $64 million using
the exchange rate as of December 31, 2020) for a 5 year term.
During Q3 2020, Comcel's board of directors decided
to redeem the $800 million aggregate principal amount of its outstanding 6.875% Senior Notes due 2024 on November 18, 2020. The
redemption was officially announced on October 1, 2020 at a redemption price equal to 102.292% of the principal amount of the Notes
to be redeemed plus accrued and unpaid interest of $16 million, resulting in an aggregate amount of $834 million payable on November
18, 2020. This redemption was financed through a mix of local financing and shareholders' loans. The redemption premium ($18 million)
and additional interest ($7 million), as well as the remaining unamortized deferred costs amounting to $8 million, have been expensed
in Comcel's statement of income for the year ended December 31, 2020. The impact on the Group's statement of income is therefore
an $18 million expense (at 55% ownership) recorded on the line "Share of profit in the joint ventures in Guatemala and Honduras".
On October 5, 2020, Comcel executed a credit
agreement for GTQ 1,697 million (approximately $218 million using the exchange rate as of December 31, 2020) for a 5 year term
with the aim to cancel the credit agreement with Banco Industrial and to finance and refinance working capital, capital expenditures
and general corporate purposes.
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
10. FINANCIAL OBLIGATIONS (Continued)
A. Debt and financing (Continued)
Panama
On October 15, 2020, Cable Onda S.A. partially
repaid $50 million of its $75 million credit agreement dated as of August 27, 2019, with Banco Nacional de Panama S.A .
On December 1, 2020, Cable Onda S.A. executed
a credit agreement with Bank of Nova Scotia for $110 million divided into 2 tranches. Tranche A ($85 million) was disbursed on
December 1, 2020 to partially redeem the Local Bond ($85 million), and Tranche B is expected to be disbursed in Q1 2021.
Analysis of debt and financing by maturity
The total amount of debt and financing is repayable
as follows:
|
in millions of U.S. dollars
|
As at December 31, 2020
|
December 31, 2019
|
|
Due within:
|
|
|
|
One year
|
113
|
|
186
|
|
|
One-two years
|
107
|
|
155
|
|
|
Two-three years
|
439
|
|
145
|
|
|
Three-four years
|
811
|
|
517
|
|
|
Four-five years
|
467
|
|
1,085
|
|
|
After five years
|
3,755
|
|
3,884
|
|
|
Total debt and financing
|
5,691
|
|
5,972
|
|
As at December 31, 2020, the Group's share of
total debt and financing secured by either pledged assets, pledged deposits issued to cover letters of credit or guarantees was
$287 million (December 31, 2019: $464 million).
In addition to the above, in 2019, MIC Tanzania
Public Limited Company entered into a loan facility agreement, with the Standard Bank of South Africa acting as an agent and a
consortium of banks acting as the original lenders. The facility agreement, maturing in 2025, has an all asset debenture securing
the whole amount, as well as a pledge over the shares of the immediate holding company of the borrower.
The table below describes the outstanding and
maximum exposure under guarantees and the remaining terms of the guarantees as at December 31, 2020 and December 31, 2019.
|
|
Bank and financing guarantees (i)
|
|
in millions of U.S. dollars
|
As at December 31, 2020
|
As at December 31, 2019
|
|
Terms
|
Outstanding and Maximum exposure
|
|
0-1 year
|
59
|
|
29
|
|
|
1-3 years
|
227
|
|
134
|
|
|
3-5 years
|
—
|
|
300
|
|
|
Total
|
287
|
|
464
|
|
(i) If non-payment by the obligor, the guarantee
ensures payment of outstanding amounts by the Group's guarantor.
The Group’s interest and other financial
expenses comprised the following:
|
in millions of U.S. dollars
|
Twelve months ended December 31, 2020
|
Twelve months ended December 31, 2019
|
Three months ended December 31, 2020
|
Three months ended December 31, 2019
|
|
Interest expense on bonds and bank financing
|
(386)
|
|
(348)
|
|
(98)
|
|
(93)
|
|
|
Interest expense on leases
|
(156)
|
|
(157)
|
|
(40)
|
|
(44)
|
|
|
Early redemption charges
|
(15)
|
|
(10)
|
|
(15)
|
|
—
|
|
|
Others
|
(67)
|
|
(47)
|
|
(15)
|
|
(19)
|
|
|
Total interest and other financial expenses
|
(624)
|
|
(564)
|
|
(168)
|
|
(157)
|
|
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
10. FINANCIAL OBLIGATIONS (Continued)
B. Lease liabilities
In early 2020, and following a change in regulation
in Colombia, future lease payments for the use of certain public assets have been significantly decreased. This triggered a lease
modification and a decrease of the related lease liabilities (and right-of-use assets) of approximately $45 million.
Except for the change above, there have been
no other unusual significant events affecting lease liabilities (and right-of-use assets) during the year ended December 31, 2020.
11. COMMITMENTS AND CONTINGENCIES
Litigation & claims
The Company and its operations are contingently
liable with respect to lawsuits, legal, regulatory, commercial and other legal risks that arise in the normal course of business.
As of December 31, 2020, the total amount of claims brought against Millicom and its subsidiaries is $284 million (December 31,
2019: $204 million). The Group's share of the comparable exposure for joint ventures is $14 million (December 31, 2019: $4 million).
As at December 31, 2020, $45 million has been
provisioned by its subsidiaries for these risks in the consolidated statement of financial position (December 31, 2019: $30 million).
The Group's share of provisions made by the joint ventures was $3 million (December 31, 2019: $3 million). While it is not possible
to ascertain the ultimate legal and financial liability with respect to these claims and risks, the ultimate outcome is not anticipated
to have a material effect on the Group’s financial position and operations.
On May 25, 2020, as a result of the termination
of the Costa Rica acquisition (see Note 3), Telefonica filed a complaint, followed by an amended complaint on August 3, 2020, against
us in the Supreme Court of New York. The amended complaint asserts claims for breach of contract and alleges, among other things,
that we were required to close because the closing conditions specified in the sale and purchase agreement for the acquisition
had been satisfied. The complaint seeks, among other relief, a declaration of Telefonica’s rights, and unspecified damages,
costs, and fees. The case remains at a preliminary phase, with the discovery process set to commence after the Court’s denial
of a motion to dismiss. We believe the complaint is without merit and that our position will ultimately be vindicated through the
judicial process.
Taxation
At December 31, 2020, the tax risks exposure
of the Group's subsidiaries is estimated at $339 million, for which provisions of $77 million have been recorded in tax liabilities;
representing the probable amount of eventual claims and required payments related to those risks (December 31, 2019: $300 million
of which provisions of $50 million were recorded). The Group's share of comparable tax exposure and provisions in its joint ventures
amounts to $69 million (December 31, 2019: $49 million) and $7 million (December 31, 2019: $4 million), respectively.
Capital commitments
At December 31, 2020, the Company and its subsidiaries
had fixed commitments to purchase network equipment, land and buildings, other fixed assets and intangible assets of $564 million
of which $400 million are due within one year (December 31, 2019: $122 million of which $102 million are due within one year).
Increase is mainly due to the newly acquired spectrum license by Tigo Colombia and the related network coverage obligations (note
9). The Group’s share of commitments in the joint ventures is $69 million and $52 million. (December 31, 2019: $52 million
and $51 million).
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
12. RELATED PARTY TRANSACTIONS
The following transactions were conducted with
related parties during the three- month period and year ended December 31, 2020 and December 31, 2019:
|
in millions of U.S. dollars
|
Twelve months
ended
December 31,
2020
|
Twelve months
ended
December 31,
2019
|
Three months
ended
December 31,
2020
|
Three months
ended
December 31,
2019
|
|
Expenses
|
|
|
|
|
|
Purchases of goods and services from Miffin
|
(216)
|
|
(214)
|
|
(60)
|
|
(55)
|
|
|
Purchases of goods and services from EPM
|
(37)
|
|
(42)
|
|
(9)
|
|
(13)
|
|
|
Lease of towers and related services from HT (i)
|
—
|
|
(146)
|
|
—
|
|
(28)
|
|
|
Other expenses
|
(57)
|
|
(10)
|
|
(48)
|
|
(128)
|
|
|
Total
|
(310)
|
|
(412)
|
|
(117)
|
|
(224)
|
|
|
|
(i)
|
HT ceased to be a related party on October 15, 2019
(note 14).
|
|
in millions of U.S. dollars
|
Twelve months
ended
December 31,
2020
|
Twelve months
ended
December 31,
2019
|
Three months
ended
December 31,
2020
|
Three months
ended
December 31,
2019
|
|
Income / gains
|
|
|
|
|
|
Sale of goods and services to Miffin
|
327
|
|
306
|
|
90
|
|
84
|
|
|
Sale of goods and services to EPM
|
15
|
|
13
|
|
4
|
|
3
|
|
|
Other income / gains
|
2
|
|
3
|
|
—
|
|
2
|
|
|
Total
|
343
|
|
322
|
|
94
|
|
89
|
|
As at December 31, 2020 and December 31, 2019,
the Group had the following balances with related parties:
|
in millions of U.S. dollars
|
As at December 31, 2020
|
As at December 31,
2019
|
|
Liabilities
|
|
|
|
Payables to Guatemala joint venture(i)
|
231
|
|
361
|
|
|
Payables to Honduras joint venture(ii)
|
103
|
|
133
|
|
|
Payables to EPM
|
20
|
|
37
|
|
|
Payables to Panama non-controlling interests
|
1
|
|
—
|
|
|
Other accounts payable
|
1
|
|
—
|
|
|
Total
|
356
|
|
531
|
|
|
|
(i)
|
Interest bearing shareholder loans of which $29 million
are due after more than one year.
|
|
|
(ii)
|
Mainly advances for dividends expected to be declared
in 2020 and shareholder loans.
|
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
12. RELATED PARTY TRANSACTIONS (Continued)
|
in millions of U.S. dollars
|
As at December 31, 2020
|
As at December 31, 2019
|
|
Assets
|
|
|
|
Receivables from Guatemala joint venture (i)
|
206
|
|
11
|
|
|
Receivables from Honduras joint venture (ii)
|
84
|
|
11
|
|
|
Receivables from EPM
|
3
|
|
3
|
|
|
Receivables from Panama non-controlling interests
|
1
|
|
—
|
|
|
Receivable from AirtelTigo Ghana (iii)
|
—
|
|
43
|
|
|
Other accounts receivable
|
5
|
|
4
|
|
|
Total
|
299
|
|
73
|
|
(i) In October 2020, Millicom granted a shareholder
loan of $193 million to Guatemala (out of which $39 million is due after more than one year as of December 31, 2020. The loan bears
interests at 4% p.a. and is repayable by December 15, 2021, at the latest. Together with other shareholder and external financings,
the proceeds were used to repay the $800 million aggregate principal amount of its outstanding 6.875% Senior Notes due 2024 (note
10).
(ii) In
November 2020, our operations in Honduras completed a shareholding restructuring whereby Telefonica Cellular S.A. acquired the
shares of Navega S.A. de CV from its existing shareholders. The sale consideration will be payable in several installments with
a final settlement in November 2023. As of December 31, 2020, $51 million out of a total receivable of $79 million is due after
more than one year and therefore disclosed in non-current assets. The disposal also triggered the recognition of a net gain of
$ 4 million, under ‘Other operating income (expenses), net’ in the Group's statement of income, corresponding to the
portion of gain realized on the unrelated investors' interests in the joint venture (i.e. 33.33%).
(iii) In
2020, and as a result of the significant deterioration of the credit risk of AirtelTigo Ghana, combined with other unfavorable
economic factors, Millicom concluded that this related party loan was underperforming and should be impaired. As a consequence,
the Group fully impaired this receivable of $45 million during the year, disclosed under ' Other operating income (expenses),
net' in the income statement..
13. FINANCIAL INSTRUMENTS
Other than the items disclosed below, the fair
values of financial assets and financial liabilities approximate their carrying values as at December 31, 2020 and December 31,
2019:
|
in millions of U.S. dollars
|
Carrying value
|
Fair value(i)
|
|
|
As at December 31, 2020
|
As at December 31, 2019
|
As at December 31, 2020
|
As at December 31, 2019
|
|
Financial liabilities
|
|
|
|
|
|
Debt and financing
|
5,691
|
|
5,972
|
|
5,572
|
|
6,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Fair values are measured with reference to Level 1
(for listed bonds) or 2.
|
Derivative financial instruments
Currency and interest rate swap contracts
MIC S.A. entered into swap contracts in order
to hedge the foreign currency and interest rate risks in relation to the SEK 2 billion (approximately $211 million) senior unsecured
sustainability bond issued in May 2019. These swaps are accounted for as cash flow hedges as the timing and amounts of the cash
flows under the swap agreements match the cash flows under the SEK bond. Their maturity date is May 2024. The hedging relationship
is highly effective and related fluctuations are recorded through other comprehensive income. At December 31, 2020, the fair values
of the swaps amount to an asset of $23 million (December 31, 2019: a liability of $0.2 million).
Colombia, El Salvador and Costa Rica operations
have also entered into several swap agreements in order to hedge foreign currency and interest rate risks on certain long term
debts. These swaps are accounted for as cash flow hedges and related fair value changes are recorded through other comprehensive
income. At December 31, 2020, the fair value of El Salvador amount to a liability of $3 million (December 31, 2019: a a liability
of $3 million), Costa Rica swaps amount to a liability of $5 million and an asset of $1 million (December 31, 2019: a liability
of $14 million) and the fair value of Colombia swap amount to a liability of $7 million (December 31, 2019: nil).
Interest rate and currency swaps are measured
with reference to Level 2 of the fair value hierarchy.
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
13. FINANCIAL INSTRUMENTS (Continued)
Call and put options - Panama
As of December 31, 2020, the put option liability
is valued at $262 million (December 31, 2019: $264 million) (being the higher of the value of the 'Transaction Price' put option
and fair market value - for further details refer to the Group's 2019 consolidated financial statements). Changes in the value
of the put option liability are recorded in the Group's statement of income under 'other non-operating (expenses) income, net'
(see note 6).
As of December 31, 2020, call options have a
fair value of $3 million (December 31, 2019: nil).
There are no other derivative financial instruments
with a significant fair value at December 31, 2020.
14. EQUITY INVESTMENTS
As at December 31, 2020 and December 31, 2019,
Millicom has the following investments in equity instruments measured at fair value through profit and loss under IFRS 9:
|
in millions of U.S. dollars
|
December 31, 2020
|
December 31, 2019
|
|
Investment in Jumia
|
—
|
|
32
|
|
|
Investment in HT
|
160
|
|
338
|
|
|
Equity investment - total
|
160
|
|
371
|
|
Jumia Technologies AG (“Jumia”)
In the course of June 2020, Millicom disposed
of its entire stake in Jumia (approximately 6%) for a total net consideration of $29 million, triggering a net gain on disposal
of $15 million recorded in the statement of income for the year ended December 31, 2020 under ‘other operating income (expenses),
net’. The changes in fair value prior to the disposal were shown under 'Other non-operating (expenses) income, net' (note
6).
Helios Towers plc (“HT”)
During November 2020, Millicom disposed of a
second portion of its shareholding in HT (52 million shares or 5.2%) for a total net consideration of GBP 80 million or $106 million
(at a price per share of GBP 1.55), triggering the recognition of a net gain on disposal of $1 million. In June 2020, Millicom
disposed of 33 million shares that it owned in HT for a total net consideration of GBP 49 million ($62 million), triggering a net
gain on disposal of $5 million. Net gains on disposal have been recorded in the statement of income for the year ended December
31, 2020 under ‘other operating income (expenses), net’.
Following these disposals, Millicom owns a remaining
shareholding of 7.6% in HT, valued at $160 million (level 1) at the December 31, 2020 share price (GBP 1.53). The changes in fair
value are shown under 'Other non-operating (expenses) income, net' (see note 6).
Unaudited Interim Condensed Consolidated Financial Statements
for the three- month period and year ended December 31, 2020
|
|
15. INVESTMENTS IN JOINT VENTURES
Joint ventures are businesses over which Millicom
exercises joint control as decisions over the relevant activities of each, such as the ability to upstream cash from the joint
ventures, require unanimous consent of shareholders. Millicom determines the existence of joint control by reference to joint venture
agreements, articles of association, structures and voting protocols of the board of directors of those ventures.
At December 31, 2020, the equity accounted net
assets of Millicom's joint ventures in Guatemala, Honduras and Ghana totaled $3,072 million (December 31, 2019: $3,346 million).
These net assets do not necessarily represent statutory reserves available for distribution as these include consolidation adjustments
(such as goodwill and previously unrecognized assets and assumed liabilities recognized as part of the purchase accounting). Out
of these reserves, $153 million (December 31, 2019: $142 million) represent statutory reserves that are unavailable to be distributed
to the Group. During the year ended December 31, 2020, Millicom’s joint ventures paid $71 million (December 31, 2019: $237
million) as dividends or dividend advances to the Company.
|
in millions of U.S. dollars
|
2020
|
|
Guatemala(i)
|
Honduras (i)
|
|
Opening Balance at January 1, 2020
|
2,089
|
|
708
|
|
|
Disposal of the Group's investment in Navega to Celtel (ii)
|
—
|
|
(83)
|
|
|
Results for the period
|
144
|
|
27
|
|
|
Dividends declared during the period
|
(199)
|
|
(55)
|
|
|
Currency exchange differences
|
(3)
|
|
13
|
|
|
Closing Balance at December 31, 2020
|
2,031
|
|
610
|
|
|
|
(i)
|
Share of profit is recognized under ‘Share of
profit in the joint ventures in Guatemala and Honduras’ in the statement of income.
|
16. IPO – MILLICOM’S OPERATIONS
IN TANZANIA
The Tanzanian government has implemented legislation
requiring telecommunications companies to list their shares on the Dar es Salaam Stock Exchange and offer 25% of their shares in
a Tanzanian public offering. The Group is currently planning for the IPO of our Tanzanian operation pursuant to the legislation
and have filed a draft prospectus with the Tanzania Capital Market and Securities Authority in December 2019. The Regulator has
since requested the Group to retain an underwriter to ensure the success of the IPO. Together with its investment bank advisers,
the Group is seeking an underwriter active in the Tanzanian and Eastern African markets, a process currently underway.
17. SUBSEQUENT EVENTS
On
February 11, Millicom announced that it has given notice to holders of its Notes due 2026, 2028 and 2029 of the company's intention
to exercise its right to call 10% of the principal outstanding of these Notes at a price of 103%. Total consideration of approximately
$180 million will be funded from cash, consistent with the company's decision to prioritize debt reduction.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
MILLICOM INTERNATIONAL CELLULAR S.A.
(Registrant)
|
|
|
|
|
|
|
By:
|
/s/ Salvador Escalon
|
|
|
|
|
Name:
|
Salvador Escalon
|
|
|
|
|
Title:
|
Executive Vice President, General Counsel
|
Date: February 11, 2020
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