Indicate by check mark whether the registrant files
or will file annual reports under cover of Form 20-F or Form 40-F:
Indicate by check mark if the registrant is submitting
the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting
the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
In Q1 2021, group revenue was roughly
flat year-on-year at $1,088 million due to strong operational results offset by the translation impact of weaker currencies in Paraguay
and Costa Rica. Operating expenses declined 2.6% ($11 million) year-on-year to $391 million, largely reflecting an $8 million one-off
in 2020.
Depreciation decreased 2.4% ($5
million) year-on-year to $217 million, due to network modernization activities which accelerated the depreciation of older infrastructure
in 2020. Amortization increased 46.6% ($34 million) to $107 million reflecting our decision to transition the Cable Onda brand to Tigo
in Panama, which took effect in April 2021.
Our share of profits in Guatemala
and Honduras was $61 million, up 36.5% ($16 million) year-on-year due to strong operational performance and lower financing costs
resulting from a reduction in debt in Guatemala. Other operating expenses of $17 million in Q1 2021 includes a $25 million charge related
to the disposal of our stake in AirtelTigo in Ghana. As a result, operating profit was
$115 million in Q1 2021, down 13.9% ($19 million) year-on-year.
Net financial expenses increased $3
million year-on-year to $145 million, mostly due to accrued interest related to our spectrum purchase in Colombia. Other non-operating
income of $58 million reflects the mark to market revaluation of our equity investment in Helios Towers as well as foreign exchange gains.
This compares to an expense of $159 million in Q1 2020, due to the mark to market of equity investments in Helios Towers and Jumia,
as well as foreign exchange losses.
The tax expense was $3 million
in Q1 2021, compared to a credit of $16 million in Q1 2020, which benefited from a deferred tax credit. Non-controlling interests
reflect our partners' share of net profits and losses, largely in our Colombia and Panama
subsidiaries. These were $19 million in Q1 2021, down from $28 million in Q1 2020, due to improvement in Colombia, partially offset by
weaker performance in Panama.
As a result of these factors, net profit for
the period attributable to owners of the Company was $42 million, or $0.41 per share, as compared to a net loss of $122 million
($1.21 per share) in Q1 2020. The weighted average number of shares during the quarter was 101.33 million, a slight increase of 0.21%
year-on-year related to our employee share-based compensation plans. As of March 31, 2021, we had 101,739,217 shares outstanding, including
206,130 held in treasury.
Finance charges declined $12 million
to $92 million due to lower average levels of gross debt, while lease interest payments were unchanged. As a result, free cash flow (FCF)
was negative $146 million in Q1 2021, a reduction of $20 million compared to $126 million in Q1 2020. FCF is typically negative in Q1
due to seasonal factors, including the timing of capex and other working capital items that are often contracted in Q4 but paid for in
Q1.
In Q1 2021, dividends and advances
received from our joint ventures in Guatemala and Honduras were nil, compared to $24 million received in Q1 2020. This reflects the decision
to prioritize use of Guatemala's cash generation to re-pay principal on notes payable to shareholders. As of the end of March 2021, Guatemala
had already repaid $148 million in notes payable to the Group, and the remaining balance of $45 million is expected to be paid in full
during Q2 2021. Meanwhile, dividends paid to non-controlling interests in Colombia were $3 million.
As a result, Equity Free Cash Flow
(EFCF) for Q1 2021 was $(149) million, as compared to $(102) million in Q1 2020. Further adjusting for lease principal repayments, EFCF
after leases was $(178) million, down 33.8% from $(133) million in Q1 2021.
Debt
Debt information
|
Gross Debt
|
Cash
|
Net
|
Leases
|
Financial Obligations
|
($ millions)
|
USD
|
LCY
|
Total
|
|
Debt
|
|
Gross
|
Net*
|
Latin America
|
620
|
2,274
|
2,895
|
342
|
2,553
|
782
|
3,677
|
3,335
|
Africa
|
162
|
41
|
203
|
12
|
191
|
196
|
399
|
387
|
Corporate
|
2,276
|
38
|
2,314
|
249
|
2,066
|
23
|
2,337
|
2,088
|
Group (IFRS)
|
3,058
|
2,354
|
5,412
|
603
|
4,809
|
1,000
|
6,412
|
5,810
|
Guatemala and Honduras
|
197
|
551
|
748
|
220
|
528
|
285
|
1,033
|
813
|
Underlying (non-IFRS)
|
3,256
|
2,904
|
6,160
|
823
|
5,337
|
1,285
|
7,445
|
6,622
|
Proportionate (non-IFRS)
|
3,162
|
2,151
|
5,313
|
670
|
4,642
|
986
|
6,299
|
5,629
|
* Net Debt and Net financial obligations are non-IFRS
measures. See page 12 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures Cash includes
term deposits of nil as of March 31, 2021.
In order to provide a more complete
picture of the Group's financial situation, this section discusses gross debt, leases, cash, and net debt on an underlying basis, a non-IFRS
measure that includes Guatemala and Honduras as if fully consolidated.
As of March 31, 2021, underlying
gross debt was $6,160 million, a reduction of $281 million during the quarter. Our underlying gross debt includes Guatemala and Honduras,
which had $748 million of gross debt as of March 31, 2021, a decrease of $2 million during the quarter.
Approximately 59% of underlying
gross debt at March 31, 2021 was in Latam, 3% in Africa, and the remaining 38% at the corporate level. Over the past year, we have lowered
our average effective interest rate to 5.5% from 5.8%, while also improving the mix to 47% in local currency or swapped for local currency
as of Q1 2021, up from 33% as of Q1 of 2020. In addition, 81% was at fixed rates or swapped for fixed rates, and the average maturity
of 5.9 years, in line with our targets. On our dollar-denominated debt, the average rate was 5.2% with an average maturity of 6.4 years,
as of March 31, 2021.
Our underlying cash position was
$823 million as of March 31, 2021, a decrease of $299 million compared to $1,122 million as of December 31, 2020, mainly due to debt repayment
activity. Of our underlying cash balance, 68% was held in U.S. dollars. As a result, our underlying net debt was $5,337 million as of
March 31, 2021, a decrease of $18 million during the quarter.
In addition, as of March 31, 2021,
we had underlying lease liabilities of $1,285 million, which represented 17% of underlying gross financial obligations. Including these
lease liabilities, underlying net financial obligations were $6,622 million as of March 31, 2021, a reduction of $9 million during the
quarter.
Proportionate leverage2,
which captures our proportional ownership in each country as well as lease obligations, was 3.13x as of March 31, 2021. This is down from
3.20x as of December 31, 2020 due primarily to EBITDA growth. Excluding the impact of leases, proportionate leverage would have been 3.00x[3],
an improvement from 3.07x as of December 31, 2020.
2
Proportionate leverage is a non-IFRS measure calculated using LTM (last twelve-month) EBITDA, proforma for acquisitions and disposals.
3 Proportionate leverage
after leases is the ratio of proportionate net debt over LTM EBITDA after leases, proforma for acquisitions made during the last twelve
months. Refer to page 12 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures.
Earnings Release
Q1 2021
|
|
Operating segment performance
Our management determines operating
and reportable segments based on the reports that are used by the chief operating decision maker to make strategic and operational decisions
from both a business and geographic perspective. The Millicom Group’s risks and rates of return for its operations are predominantly
affected by operating in different geographical regions. The Millicom Group has businesses in two main regions, Latin America and Africa,
which constitute our two segments. We allocate corporate costs to each segment based on their contribution to underlying revenue, and
only unusual costs, such as the M&A-related fees remain unallocated.
Our Latin America segment includes
the results of Guatemala and Honduras as if they were fully consolidated, as this reflects the way our management reviews and uses internally
reported information to make decisions about operating matters and to provide increased transparency to investors on those operations.
Our Africa segment does not include our joint venture in Ghana because our management does not consider it to be a strategic part of the
group.
Please refer to Note 4 of our Unaudited
Interim Condensed Consolidated Financial Statements for more details on our segments. The information contained herein can also be accessed
electronically in the Financial & Operating Data Excel file published at www.millicom.com/investors alongside this earnings release.
Latin America segment
Business units
We discuss our Latam results under
two principal business units:
1. Mobile, including mobile data,
mobile voice, and mobile financial services (MFS) to consumer, business and government customers;
2. Cable and other fixed, including
broadband, Pay TV, content, and fixed voice services for residential (Home) customers, as well as voice, data and value-added services
and solutions to business and government customers.
On occasion, we also discuss our
performance by customer type, with B2B referring to our business and government customers, while B2C includes residential and personal
consumer groups.
Market environment
Economic activity continued to
recover gradually in our markets, as most countries continued to ease lockdowns implemented at the beginning of the pandemic, and remittances
from the U.S. to Central America sustained double-digit growth. Temporary restrictions were implemented in some countries and regions,
as governments took steps to prevent a spike in new cases stemming from gatherings around the year-end and Easter holidays. However, these
new restrictions appear to have had a less severe impact on economic activity and on our business as compared to those implemented at
the onset of the pandemic. Meanwhile, vaccinations have begun, but less than 1% of the population in our markets had been vaccinated as
of the end of March. Currencies in our markets generally strengthened, with the Colombian peso and the Paraguayan guarani gaining 3.0%,
and 4.4% respectively against the U.S. dollar during the quarter. Foreign exchange rates and movements are presented on page 15.
Earnings Release
Q1 2021
|
|
Latam segment - Key Performance Indicators
Key Performance Indicators (‘000)
|
Q1 2021
|
Q4 2020
|
Q3 2020
|
Q2 2020
|
Q1 2020
|
Q1 2021 vs Q1 2020
|
Mobile customers
|
42,805
|
41,734
|
39,483
|
37,777
|
39,449
|
8.5%
|
Of which 4G customers
|
18,830
|
18,243
|
16,330
|
14,290
|
14,876
|
26.6%
|
Of which postpaid subscribers
|
5,060
|
4,920
|
4,773
|
4,636
|
5,078
|
(0.4)%
|
Mobile ARPU ($)
|
6.5
|
6.8
|
6.8
|
6.4
|
7.0
|
(6.6)%
|
Total homes passed
|
12,248
|
12,229
|
12,106
|
11,976
|
11,929
|
2.7%
|
Of which HFC homes passed
|
11,949
|
11,888
|
11,762
|
11,630
|
11,570
|
3.3%
|
Total customer relationships
|
4,701
|
4,545
|
4,453
|
4,296
|
4,391
|
7.1%
|
Of which HFC customer relationships
|
3,899
|
3,733
|
3,630
|
3,484
|
3,531
|
10.4%
|
HFC revenue generating units
|
7,971
|
7,602
|
7,343
|
7,056
|
7,143
|
11.6%
|
Of which Broadband Internet
|
3,535
|
3,356
|
3,238
|
3,086
|
3,089
|
14.5%
|
Home ARPU ($)
|
28.8
|
28.0
|
27.7
|
27.6
|
28.7
|
0.3%
|
Mobile
We ended Q1 2021 with 42.8 million
customers, an increase of 1.1 million during the quarter, our strongest performance Q1 of the past
decade in what is usually a seasonally-weaker quarter. Approximately one quarter of the net additions came from Colombia, where we continue
to expand our network on the 700 MHz spectrum, and from Honduras, where the prepaid mobile market continued to strengthen, likely aided
by robust remittances.
In
postpaid, we added 140,000 customers to end the quarter with more than 5 million, just 75,000 below the pre-COVID peak reached at year-end
2019. We added 587,000 new 4G smartphone data users, and these now account for 44% of our mobile customer base, up from 38% in Q1 2020.
Tigo Money, our mobile financial
services platform available in five of our nine Latam markets, saw customers increase 11.4% year-on year, ending the quarter with 4.8
million.
Mobile ARPU
declined 6.6% year-on-year to $6.5, due mostly to the shift in mix from postpaid to prepaid over the past year caused by the pandemic.
Home
In Home, our residential cable
business, we continued to experience very strong demand for all our services, and we added a record 166,000 HFC customer relationships
in the quarter. At the end of Q1, our networks passed 12.2 million homes, an increase of 19,000 during the period, reflecting the expansion
of our HFC network to 61,000 additional homes, offset by the shut down of our UHF network in Paraguay and the loss of approximately 8,000
homes in Honduras in the hurricanes of Q4 2020. As a result, penetration on our HFC network increased to 32.6%, an increase of 2.1 percentage
points from 30.5% in Q1 2020.
Demand was strong across the board,
with most countries registering higher customer relationship net additions in Q1 of 2021 as compared to both Q1 and Q4 of 2020. Bolivia
added a record 50,000 customer relationships driven by a back-to-school campaign, while Colombia registered its strongest Q1 net additions
ever. Guatemala added a record of 36,000 customer relationships, resulting in a growth of 20.6% year-on-year in Q1 2021. Home ARPU improved
by $0.80 sequentially to $28.8, roughly flat year-on-year.
Earnings Release
Q1 2021
|
|
Latam segment financial results
Latam Financial Highlights*
|
Q1 2021
|
Q1 2020
|
% change
|
Organic % change
|
($m, unless otherwise stated)
|
Revenue
|
1,530
|
1,504
|
1.7%
|
2.7%
|
Service revenue
|
1,413
|
1,395
|
1.3%
|
2.2%
|
Mobile
|
833
|
843
|
(1.2)%
|
|
Cable and other fixed services
|
563
|
539
|
4.6%
|
|
Other
|
17
|
13
|
22.9%
|
|
EBITDA
|
638
|
600
|
6.3%
|
5.9%
|
EBITDA margin
|
41.7%
|
39.9%
|
1.8 pt
|
|
Capex
|
167
|
174
|
(3.9)%
|
|
OCF
|
471
|
427
|
10.4%
|
9.7%
|
* Service revenue, EBITDA, EBITDA margin, Capex,
OCF and organic growth are Non-IFRS measures. Capex is defined as capital expenditures excluding spectrum, license costs and finance lease
capitalizations. See page 12 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures.
In Q1 2021, revenue in our Latam
segment increased 1.7% year-on-year to $1.5 billion, while service revenue increased 1.3% to $1,413
million. Adjusting for currency, organic service revenue growth was 2.2% year-on-year,
the first positive service revenue growth since Q1 2020, reflecting strong business performance in both Mobile and Home.
In local currency terms, service
revenue growth was the strongest in El Salvador (8.9%), Guatemala (6.1%), and Colombia (3.1%), while growth remained slightly negative
in countries most affected by the pandemic, including Bolivia (-2.2%) and Panama (-1.0%). Encouragingly, Honduras service revenue was
about flat year-on-year, a significant improvement from -3.4% in Q4, -6.0% in Q3 and -12.4% in Q2, at the height of the lockdowns, with
the improvement coming from Mobile, which returned to positive growth for the first time since mid 2019.
For a second consecutive quarter,
El Salvador registered high single-digit service revenue growth, as recent network investments have fueled very robust growth in Mobile.
Guatemala sustained growth of more than 6% in Q1, as continued acceleration in Home and B2B largely offset a slight deceleration in B2C
mobile, which grew at a low single-digit rate. In Colombia, Home service revenue growth accelerated to more than 7.5% in the quarter,
while Mobile and B2B continued to show healthy sequential improvement but remained down slightly on a year-on-year basis. In Panama, mid-single-digit
growth in our consumer businesses largely offset performance in B2B, which remains well below pre-COVID levels due to the weak macroeconomic
backdrop.
By
business unit, Home service revenue grew 6.4% year-on-year (7.9% organically), a significant acceleration from flat performance
in Q4 (3.8% organic), fueled by customer growth and improving ARPU trends, as well as stronger foreign exchange rates. In
our consumer Mobile business, organic service revenue grew 0.6% year-on-year, with every country in Central America showing positive year-on-year
growth. Finally, B2B service revenue declined 3.2% organically, compared to a decline of 6.3% in Q4 2020, as performance improved in most
countries.
EBITDA for our Latam segment was
$638 million in Q1 2021, an increase of 6.3% year-on-year (5.9% organically) compared to $600 million in Q1 2020. Growth was positive
in most countries, with El Salvador and Guatemala leading the way with double-digit growth, while performance in Nicaragua was flattered
by a $8 million one-off in Q1 2020 related to a municipal withholding tax stemming from the acquisition. The EBITDA margin expanded by
1.8 percentage points year-on-year to 41.7% in Q1 2021.
Capex
in Latin America was $167 million in the quarter. In mobile, we added more than 150 points of presence to our 4G network, and we ended
the quarter with more than 15,100 points of presence, an increase of 19% year-on-year. At the end of Q1 2021, our 4G networks covered
approximately 77% of the population (approximately 120 million in our markets), up from approximately 73% at Q1 2020.
Operating
cash flow (OCF), measured as EBITDA minus Capex, increased 10.4% year-on-year to $471 million in Q1 2021, an increase of 9.7% on
an organic basis.
Earnings Release
Q1 2021
|
|
Africa segment - Segment financial results and Key
Performance Indicators
Please refer to Note 4 of our Unaudited
Interim Condensed Consolidated Financial Statements for more details on our segments.
Africa Financial Highlights*
|
Q1 2021
|
Q1 2020
|
% change
|
($m, unless otherwise stated)
|
Revenue
|
89
|
89
|
(0.3)%
|
Service revenue
|
89
|
89
|
(0.3)%
|
EBITDA
|
31
|
30
|
3.4%
|
EBITDA margin %
|
34.5%
|
33.2%
|
1.2 pt
|
Capex
|
5
|
5
|
(6.1)%
|
Key Performance Indicators ('000)
|
|
|
Mobile customers
|
13,545
|
11,727
|
15.5%
|
Tigo Money customers
|
6,957
|
6,230
|
11.7%
|
Mobile ARPU ($)
|
2.2
|
2.3
|
(6.6)%
|
* Service revenue, EBITDA and Capex are non-IFRS
measures. See page 12 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.
Our Africa segment comprises our
Tanzania operations. On April 19, 2021, we announced that we have signed an agreement for the sale
of our operations in Tanzania to a consortium led by Axian, a pan-African group that was part of the consortium that acquired Millicom’s
operations in Senegal in 2018. Completion is subject to regulatory approvals.
Service revenue for our Africa
segment was stable year-on-year at $89 million in Q1 2021, while EBITDA increased 3.4% year-on-year
to $31 million due to continued cost control efforts.
Corporate Responsibility highlights – Q1 2021
Responsible Leadership in Action:
adapting our programs to the COVID-19 pandemic
Connecting Communities
We find great opportunities for
the expansion of Maestr@s Conectad@s (Connected Teachers), as ongoing uncertainties around the evolution of the pandemic in our countries
present scenarios in which schools will continue to at least present hybrid modules of online and in-person classes for several months.
Teachers, therefore, remain challenged by these circumstances and will require the support, tools and training this program can offer.
Significant progress has been made with partner organization AYHU, with over 37,000 more teachers who have completed the training as of
the end of Q1. All Latam countries will have the program implemented by Q2 of 2021.
Empowering Women
After our successful 2020 pilot
in El Salvador training Tigo Money Sales Agents and entrepreneurs where 40 women participated and were able to show increased sales and
income after completing the program, we relaunched the program in March, this time with the goal to reach 6,100 women of our value chain
who use Tigo Money as part of their business, through trainings on digital entrepreneurship skills. This project is launched in partnership
with USAID, and we are looking for other companies to participate, incorporating women from their value chains in the training.
Responsible Supply Chain Management
We have confirmed the partner for
the design of the new virtual Supplier Training Program and work is currently underway in the creation of the content, based on previous
years trainings and new material. The goal for 2021 is to reach 75% of Millicom's suppliers with a spend of more than $1 million.
Health, safety and sustainability
The Millicom’s Executive
Team and the Health & Safety function continued working with country operations to ensure the safety of our people as well as service
continuity as we adapt to the evolving needs in line with the latest COVID-19 guidelines from the World Health Organization and the U.S.
Center for Disease Control at all our critical sites and operations region-wide as the situation evolves. Over half of our employees continue
to work remotely from the safety of their homes.
Earnings Release
Q1 2021
|
|
Compliance and anti-corruption
program
During Q1 2021, we launched the
2021 Compliance KPIs applicable to all Local Operations, as part of our efforts to increase our Ethics & Compliance Program maturity
level from year to year. The Legal, Ethics & Compliance Department kicked off the 2021 Communication Plan with messaging from senior
and mid-level leadership and adding a new component of monthly gatherings for HQ called “Coffee with Compliance.” The aim
is to remain relevant amongst company employees while working remotely and provide a forum for them to ask Compliance-related questions
as well as obtain answers in real time.
The Department also conducted a
communication and training campaign to make employees aware of and knowledgeable about the new Corrective Action Framework, launched at
the end of 2020.
Video conference details
A video conference to
discuss these results will take place on April 29th at 14:00 (Luxembourg/Stockholm) / 13:00 (London)
/ 08:00 (Miami). Registration for the live event is required and is available at the following link.
Upon registering, participants will receive a confirmation email with personalized credentials required to join the event. Alternatively,
participants can join in a listen-only mode, by dialing any of the following numbers and using webinar ID number 829-3020-3271. Please
dial a number base on your location:
US
|
+1 929 205 6099
|
Sweden:
|
+46 850 539 728
|
UK:
|
+44 330 088 5830
|
Luxembourg:
|
+352 342 080 9265
|
Additional international
numbers are available at the following link.
A replay of the event
will be available on the Millicom website.
Financial calendar
2021
Date
|
Event
|
May 4
|
2021 AGM
|
July 29
|
Q2 2021 results and conference call
|
October 28
|
Q3 2021 results and conference call
|
Earnings Release
Q1 2021
|
|
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, Director Investor Relations
|
|
+1 (786) 628-5303
|
|
investors@millicom.com
|
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
Q1 2021
|
|
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.
|
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
Q1 2021
|
|
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, 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
Q1 2021
|
|
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 (OFCF) is OCF less changes in working capital and other non-cash items and taxes paid.
Equity Free Cash
Flow (EFCF) is OFCF 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 2020 Annual Report for a list
and description of non-IFRS measures.
Earnings Release
Q1 2021
|
|
Non-IFRS Reconciliations
Reconciliation from Reported Growth to Organic Growth
for the Latam segment4
Latam Segment ($ millions)
|
Revenue
|
Service Revenue
|
EBITDA
|
OCF
|
Q1 2021
|
Q1 2021
|
Q1 2021
|
Q1 2021
|
A- Current period
|
1,530
|
1,413
|
638
|
471
|
B- Prior year period
|
1,504
|
1,395
|
600
|
427
|
C- Reported growth (A/B)
|
1.7%
|
1.3%
|
6.3%
|
10.4%
|
D- FX impact
|
(0.9)%
|
(0.9)%
|
(0.8)%
|
(1.2)%
|
E- Other*
|
(0.1)%
|
(0.1)%
|
1.2%
|
1.8%
|
F- Organic Growth (C-D-E)
|
2.7%
|
2.2%
|
5.9%
|
9.7%
|
*Organic growth for EBITDA and OCF are calculated excluding
the allocation of corporate costs to reflect operational growth and to align with how we manage the Latam segment. The differences that
this causes are captured in "Other".
ARPU reconciliations
Latam Segment - Mobile ARPU Reconciliation
|
Q1 2021
|
Q1 2020
|
Mobile service revenue ($m)
|
833
|
843
|
Mobile Service revenue ($m) from non Tigo customers ($m) *
|
(6)
|
(12)
|
Mobile Service revenue ($m) from Tigo customers (A)
|
827
|
831
|
Mobile customers - end of period (000)
|
42,805
|
39,449
|
Mobile customers - average (000) (B) **
|
42,270
|
39,647
|
Mobile ARPU (USD/Month) (A/B/number of months)
|
6.5
|
7.0
|
* Refers to 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.
Latam Segment - Home ARPU Reconciliation
|
Q1 2021
|
Q1 2020
|
Home service revenue ($m)
|
409
|
384
|
Home service revenue ($m) from non Tigo customers ($m) *
|
(10)
|
(8)
|
Home service revenue ($m) from Tigo customers (A)
|
399
|
376
|
Customer Relationships - end of period (000) **
|
4,701
|
4,391
|
Customer Relationships - average (000) (B) ***
|
4,623
|
4,366
|
Home ARPU (USD/Month) (A/B/number of months)
|
28.8
|
28.7
|
* 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.
4 See
Note 4 of our Unaudited Interim Condensed Consolidated Financial Statements for details on our segments.
Earnings Release
Q1 2021
|
|
One-off Summary - Items above EBITDA only
Q1 2020 ($ millions)
|
Revenue
|
EBITDA
|
Comment
|
|
|
Nicaragua
|
—
|
(8)
|
Municipal withholding tax on acquisition
|
|
Latam Total
|
—
|
(8)
|
|
|
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)
|
|
|
Q1 21
|
Q4 20
|
QoQ
|
Q1 20
|
YoY
|
|
Q1 21
|
Q4 20
|
QoQ
|
Q1 20
|
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
|
3,588
|
3,695
|
3.0%
|
3,573
|
(0.4)%
|
|
3,737
|
3,433
|
(8.1)%
|
4,065
|
8.8%
|
Costa Rica
|
CRC
|
616
|
611
|
(0.8)%
|
577
|
(6.3)%
|
|
616
|
617
|
0.2%
|
587
|
(4.6)%
|
Guatemala
|
GTQ
|
7.75
|
7.80
|
0.6%
|
7.68
|
(0.9)%
|
|
7.71
|
7.79
|
1.0%
|
7.68
|
(0.4)%
|
Honduras
|
HNL
|
24.16
|
24.36
|
0.8%
|
24.77
|
2.5%
|
|
24.10
|
24.20
|
0.4%
|
24.84
|
3.1%
|
Nicaragua
|
NIO
|
34.91
|
34.72
|
(0.6)%
|
33.96
|
(2.7)%
|
|
34.99
|
34.82
|
(0.5)%
|
34.09
|
(2.6)%
|
Paraguay
|
PYG
|
6,696
|
6,989
|
4.4%
|
6,514
|
(2.7)%
|
|
6,311
|
6,900
|
9.3%
|
6,563
|
4.0%
|
Tanzania
|
TZS
|
2,315
|
2,319
|
0.2%
|
2,300
|
(0.6)%
|
|
2,319
|
2,319
|
0.0%
|
2,301
|
(0.8)%
|
Debt reconciliation
Debt information
|
Gross Debt
|
Cash
|
Net
|
Leases
|
Financial Obligations
|
($ millions)
|
USD
|
LCY
|
Total
|
|
Debt
|
|
Gross
|
Net*
|
Bolivia
|
—
|
328
|
328
|
67
|
260
|
45
|
373
|
306
|
Colombia
|
50
|
694
|
744
|
94
|
650
|
301
|
1,044
|
950
|
Costa Rica
|
13
|
106
|
119
|
5
|
114
|
4
|
123
|
118
|
El Salvador**
|
—
|
118
|
118
|
20
|
97
|
107
|
224
|
204
|
Panama**
|
—
|
870
|
870
|
64
|
805
|
125
|
994
|
930
|
Paraguay
|
557
|
160
|
717
|
65
|
652
|
78
|
795
|
730
|
Nicaragua
|
—
|
—
|
—
|
26
|
(26)
|
122
|
122
|
96
|
Latin America
|
620
|
2,274
|
2,895
|
342
|
2,553
|
782
|
3,677
|
3,335
|
* Net Debt and Net financial obligations are non-IFRS
measures. See page 12 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures Cash includes
term deposits of $0 million as of March 31, 2021.
** El Salvador's official unit of currency is
the U.S. dollar, while Panama uses the U.S. dollar as legal tender. Our local debt in both countries is therefore denominated in
U.S. dollars but presented as local currency (LCY).
Earnings Release
Q1 2021
|
|
Reconciliation Net financial obligations to EBITDA
to Proportionate net financial obligations to EBITDA as of March 31, 2021
Debt Information - March 31, 2021
|
Financial obligations
|
EBITDA
|
Leverage
|
$ millions
|
Gross
|
Cash
|
Net
|
|
|
Millicom Group (IFRS)
|
6,412
|
603
|
5,810
|
1,508
|
—
|
Plus: Guatemala
|
639
|
161
|
478
|
798
|
—
|
Plus: Honduras
|
394
|
60
|
335
|
250
|
—
|
Less: Corporate Costs
|
—
|
—
|
—
|
30
|
—
|
Underlying Millicom Group (Non-IFRS)
|
7,445
|
823
|
6,622
|
2,525
|
2.62x
|
Less: 50% Minority Stake in Colombia
|
522
|
47
|
475
|
230
|
—
|
Less: 45% Minority Stake in Guatemala
|
288
|
73
|
215
|
359
|
—
|
Less: 33% Minority Stake in Honduras
|
131
|
20
|
112
|
83
|
—
|
Less: 20% Minority Stake in Panama
|
199
|
13
|
186
|
51
|
—
|
Less: 1.5% Minority Stake in Tanzania
|
6
|
—
|
6
|
2
|
—
|
Proportionate Millicom Group (Non-IFRS)
|
6,299
|
670
|
5,629
|
1,800
|
3.13x
|
Capex Reconciliation
Capex Reconciliation
|
Q1 2021
|
Q1 2020
|
Consolidated:
|
|
|
Additions to property, plant and equipment
|
95
|
108
|
Additions to licenses and other intangibles
|
25
|
44
|
Of which spectrum and license costs
|
—
|
21
|
Total consolidated additions
|
120
|
153
|
Of which capital expenditures related to corporate offices
|
2
|
2
|
Latin America Segment
|
Q1 2021
|
Q1 2020
|
Additions to property, plant and equipment
|
140
|
145
|
Additions to licenses and other intangibles
|
41
|
133
|
Of which spectrum and license costs
|
14
|
104
|
Latin America Segment total additions (Underlying)
|
181
|
278
|
Capex excluding spectrum and license costs
|
167
|
174
|
Africa Segment
|
Q1 2021
|
Q1 2020
|
Additions to property, plant and equipment
|
5
|
5
|
Additions to licenses and other intangibles
|
—
|
—
|
Of which spectrum and license costs
|
—
|
—
|
Africa Segment total additions
|
5
|
5
|
Capex excluding spectrum and license costs
|
5
|
5
|
Underlying Capex
|
Q1 2021
|
Q1 2020
|
Latam capex excluding spectrum and license cost
|
167
|
174
|
Africa capex excluding spectrum and license cost
|
5
|
5
|
Capital expenditures related to corporate offices
|
2
|
2
|
Underlying capex excluding spectrum and license costs
|
174
|
181
|
Earnings Release
Q1 2021
|
|
Equity Free Cash Flow Reconciliation
Cash Flow Data
|
Q1 2021
|
Q1 2020
|
Net cash provided by operating activities
|
87
|
106
|
Purchase of property, plant and equipment
|
(171)
|
(179)
|
Proceeds from sale of property, plant and equipment
|
1
|
—
|
Purchase of intangible assets
|
(83)
|
(91)
|
Proceeds from sale of intangible assets
|
—
|
—
|
Purchase of spectrum and licenses
|
20
|
39
|
Finance charges paid, net
|
128
|
141
|
Operating free cash flow
|
(18)
|
15
|
Interest (paid), net
|
(128)
|
(141)
|
Free cash flow
|
(146)
|
(126)
|
Dividends received from joint ventures (Guatemala and Honduras)
|
—
|
24
|
Dividends paid to non-controlling interests
|
(3)
|
—
|
Equity free cash flow
|
(149)
|
(102)
|
Lease Principal Repayments
|
(29)
|
(31)
|
Equity free cash flow after leases
|
(178)
|
(133)
|
OCF (EBITDA- Capex) Reconciliation
Latam OCF Underlying
|
Q1 2021
|
Q1 2020
|
Latam EBITDA
|
638
|
600
|
(-) Capex (Ex. Spectrum)
|
167
|
174
|
Latam OCF
|
471
|
427
|
Africa OCF
|
Q1 2021
|
Q1 2020
|
Africa EBITDA
|
31
|
30
|
(-) Capex (Ex. Spectrum)
|
5
|
5
|
Africa OCF
|
26
|
24
|
Corporate OCF
|
Q1 2021
|
Q1 2020
|
Corporate EBITDA
|
(1)
|
(1)
|
(-) Capex (Ex. Spectrum)
|
2
|
2
|
Corporate OCF
|
(3)
|
(2)
|
Underlying OCF
|
Q1 2021
|
Q1 2020
|
Underlying EBITDA
|
668
|
630
|
(-) Capex (Ex. Spectrum)
|
174
|
181
|
Underlying OCF
|
494
|
449
|
Earnings Release
Q1 2021
|
|
Interest Expense Detail
Interest ($ millions)
|
Q1 2021
|
Q1 2020
|
Interest expense
|
(80)
|
(94)
|
Finance Leases
|
(40)
|
(39)
|
Loan Redemption expense
|
(5)
|
—
|
Other
|
(23)
|
(14)
|
Total financial expenses
|
(148)
|
(147)
|
Interest income
|
3
|
6
|
Net financial expenses
|
(145)
|
(141)
|
Underlying Interest ($ millions)
|
Q1 2021
|
Q1 2020
|
Interest expense
|
(93)
|
(117)
|
Finance Leases
|
(46)
|
(46)
|
Loan Redemption expense
|
(5)
|
—
|
Other
|
(24)
|
(13)
|
Total financial expenses
|
(168)
|
(175)
|
Interest income
|
3
|
9
|
Net financial expenses
|
(166)
|
(167)
|
Amortization Expense Detail
Amortization Expense* ($ millions)
|
Q1 2021
|
Q1 2020
|
Licenses and Spectrum
|
(19)
|
(13)
|
Related to acquisitions
|
(63)
|
(35)
|
Other items
|
(25)
|
(25)
|
Total Amortization
|
(107)
|
(73)
|
*Amortization expense related to Guatemala and Honduras
was $34 million in Q1 2021 and $33 million in Q1 2020.
Earnings Release
Q1 2021
|
|
Guatemala and Honduras Financial Information (unaudited)
Until 2015, Millicom group results
included Guatemala and Honduras on a 100% consolidation basis. Since 2016, these businesses are treated as joint ventures and are consolidated
using the equity method. To aid investors to better track the evolution of the company’s performance over time, we provide the following
indicative unaudited financial statement data for the Millicom group as if our Guatemala and Honduras joint ventures had been fully consolidated.
Income statement data Q1 2021
|
Millicom (IFRS)
|
Guatemala and Honduras JVs
|
Eliminations
|
Underlying (non-IFRS)
|
($millions)
|
Revenue
|
1,088
|
530
|
—
|
1,618
|
Cost of sales
|
(303)
|
(114)
|
—
|
(418)
|
Gross profit
|
785
|
416
|
—
|
1,201
|
Operating expenses
|
(391)
|
(142)
|
—
|
(533)
|
EBITDA
|
394
|
273
|
—
|
668
|
EBITDA margin
|
36.2%
|
51.5%
|
—
|
41.3%
|
Depreciation & amortization
|
(324)
|
(113)
|
—
|
(437)
|
Share of net profit in joint ventures
|
61
|
—
|
(61)
|
—
|
Other operating income (expenses), net
|
(17)
|
(1)
|
—
|
(17)
|
Operating profit
|
115
|
159
|
(61)
|
213
|
Net financial expenses
|
(145)
|
(21)
|
—
|
(166)
|
Other non-operating income (expenses), net
|
58
|
4
|
—
|
62
|
Gains (losses) from associates
|
(1)
|
—
|
—
|
(1)
|
Profit (loss) before tax
|
27
|
143
|
(61)
|
108
|
Net tax credit (charge)
|
(3)
|
(30)
|
—
|
(33)
|
Profit (loss) for the period
|
24
|
112
|
(61)
|
75
|
Non-controlling interests
|
19
|
(51)
|
—
|
(32)
|
Profit (loss) from discontinued operations
|
—
|
—
|
—
|
—
|
Net profit (loss) for the period
|
42
|
61
|
(61)
|
42
|
Earnings Release
Q1 2021
|
|
Balance Sheet data ($ millions)
|
Millicom IFRS
|
Guatemala and Honduras JVs
|
Underlying (non-IFRS)
|
Assets
|
|
|
|
Intangible assets, net
|
3,280
|
2,824
|
6,104
|
Property, plant and equipment, net
|
2,610
|
865
|
3,474
|
Right of Use Assets
|
868
|
265
|
1,132
|
Investments in joint ventures and associates
|
2,734
|
(2,709)
|
24
|
Other non-current assets
|
329
|
8
|
337
|
Total non-current assets
|
9,820
|
1,253
|
11,072
|
Inventories, net
|
46
|
39
|
84
|
Trade receivables, net
|
338
|
81
|
419
|
Other current assets
|
794
|
266
|
1,061
|
Restricted cash
|
187
|
22
|
209
|
Cash and cash equivalents
|
602
|
220
|
822
|
Total current assets
|
1,967
|
628
|
2,596
|
Assets held for sale
|
1
|
—
|
1
|
Total assets
|
11,788
|
1,881
|
13,669
|
|
|
|
|
Equity and liabilities
|
|
|
|
Equity attributable to owners of the Company
|
2,057
|
(50)
|
2,007
|
Non-controlling interests
|
188
|
529
|
717
|
Total equity
|
2,246
|
479
|
2,725
|
Debt and financing
|
6,174
|
992
|
7,166
|
Other non-current liabilities
|
962
|
125
|
1,087
|
Total non-current liabilities
|
7,136
|
1,118
|
8,254
|
Debt and financing
|
238
|
41
|
279
|
Other current liabilities
|
2,168
|
243
|
2,411
|
Total current liabilities
|
2,406
|
284
|
2,690
|
Liabilities directly associated with assets held for sale
|
—
|
—
|
—
|
Total liabilities
|
9,542
|
1,402
|
10,944
|
Total equity and liabilities
|
11,788
|
1,881
|
13,669
|
Earnings Release
Q1 2021
|
|
Cash Flow Data
|
Millicom IFRS
|
Guatemala and Honduras JVs
|
Underlying (non-IFRS)
|
($millions)
|
Profit (loss) before taxes from continuing operations
|
27
|
81
|
108
|
Profit (loss) for the period from discontinued operations
|
—
|
—
|
—
|
Profit (loss) before taxes
|
27
|
81
|
108
|
Net cash provided by operating activities (incl. discontinued ops)
|
87
|
229
|
316
|
Net cash used in investing activities (incl. discontinued ops)
|
(238)
|
(96)
|
(334)
|
Net cash from (used by) financing activities (incl. discontinued ops)
|
(119)
|
(161)
|
(280)
|
Exchange impact on cash and cash equivalents, net
|
(2)
|
1
|
(1)
|
Net (decrease) increase in cash and cash equivalents
|
(273)
|
(27)
|
(299)
|
Cash and cash equivalents at the beginning of the period
|
875
|
247
|
1,122
|
Effect of cash in disposal group held for sale
|
—
|
—
|
—
|
Cash and cash equivalents at the end of the period
|
602
|
220
|
822
|
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 12:00 CET on April 29,
2021.
Item 2
Unaudited Interim
Condensed Consolidated
Financial Statements
For the three-month period ended March
31, 2021
April 29, 2021
Unaudited Interim Condensed Consolidated Financial
Statements
for the three-month period ended March
31, 2021
|
|
Unaudited interim condensed consolidated statement
of income for the three-month period ended March 31, 2021
in millions of U.S. dollars except per share data
|
Notes
|
Three-months ended March 31, 2021
|
Three-months ended March 31, 2020
|
Continuing Operations
|
|
|
|
Revenue
|
4
|
1,088
|
1,088
|
Cost of sales
|
|
(303)
|
(305)
|
Gross profit
|
|
785
|
783
|
Operating expenses
|
|
(391)
|
(401)
|
Depreciation
|
|
(217)
|
(223)
|
Amortization
|
|
(107)
|
(73)
|
Share of profit in the joint ventures in Guatemala and Honduras
|
7
|
61
|
45
|
Other operating income (expenses), net
|
15
|
(17)
|
3
|
Operating profit
|
4
|
115
|
134
|
Interest and other financial expenses
|
10
|
(148)
|
(147)
|
Interest and other financial income
|
|
3
|
6
|
Other non-operating (expenses) income, net
|
5
|
58
|
(159)
|
Profit (loss) from other joint ventures and associates, net
|
|
(1)
|
—
|
Profit (loss) before taxes from continuing operations
|
|
27
|
(167)
|
Tax (charge) credit, net
|
|
(3)
|
16
|
Profit (loss) from continuing operations
|
|
24
|
(151)
|
Net profit (loss) for the period
|
|
24
|
(151)
|
|
|
|
|
Attributable to:
|
|
|
|
Owners of the Company
|
|
42
|
(122)
|
Non-controlling interests
|
|
(19)
|
(28)
|
|
|
|
|
Earnings/ (Loss) per common share for net profit/ (loss) attributable to the owners of the Company:
|
|
|
|
Basic and Diluted ($ per share) (i)
|
6
|
0.41
|
(1.21)
|
|
(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 ended March
31, 2021
|
|
Unaudited interim condensed consolidated statement
of comprehensive income for the three-month period March 31, 2021
in millions of U.S. dollars
|
Three-months ended March 31, 2021
|
Three-months ended March 31, 2020
|
Net profit (loss) for the period
|
24
|
(151)
|
Other comprehensive income (to be reclassified to statement of income in subsequent periods), net of tax:
|
|
|
Exchange differences on translating foreign operations
|
(48)
|
(99)
|
Change in value of cash flow hedges, net of tax effects
|
4
|
(18)
|
Total comprehensive income (loss) for the period
|
(20)
|
(268)
|
|
|
|
Attributable to
|
|
|
Owners of the Company
|
5
|
(217)
|
Non-controlling interests
|
(25)
|
(50)
|
|
|
|
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 ended March
31, 2021
|
|
Unaudited interim condensed consolidated statement
of financial position as at March 31, 2021
in millions of U.S. dollars
|
Notes
|
March 31, 2021
|
December 31, 2020
|
ASSETS
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
Intangible assets, net
|
9
|
3,280
|
3,403
|
Property, plant and equipment, net
|
8
|
2,610
|
2,755
|
Right of use assets
|
|
868
|
895
|
Investments in joint ventures
|
7
|
2,709
|
2,642
|
Investments in associates
|
|
24
|
24
|
Contract costs, net
|
|
5
|
5
|
Deferred tax assets
|
|
193
|
197
|
Derivative financial instruments
|
13
|
13
|
27
|
Amounts due from non-controlling interests, associates and joint ventures
|
12
|
45
|
90
|
Other non-current assets
|
|
74
|
77
|
TOTAL NON-CURRENT ASSETS
|
|
9,820
|
10,114
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
Inventories
|
|
46
|
37
|
Trade receivables, net
|
|
338
|
351
|
Contract assets, net
|
|
33
|
31
|
Amounts due from non-controlling interests, associates and joint ventures
|
12
|
92
|
206
|
Prepayments and accrued income
|
|
209
|
149
|
Current income tax assets
|
|
74
|
96
|
Supplier advances for capital expenditure
|
|
20
|
21
|
Equity investments
|
14
|
178
|
160
|
Other current assets
|
|
189
|
181
|
Restricted cash
|
|
187
|
199
|
Cash and cash equivalents
|
|
602
|
875
|
TOTAL CURRENT ASSETS
|
|
1,967
|
2,307
|
Assets held for sale
|
|
1
|
1
|
TOTAL ASSETS
|
|
11,788
|
12,422
|
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 ended March
31, 2021
|
|
Unaudited interim condensed consolidated statement
of financial position as at March 31, 2021 (continued)
in millions of U.S. dollars
|
Notes
|
March 31, 2021
|
December 31, 2020
|
EQUITY AND LIABILITIES
|
|
|
|
EQUITY
|
|
|
|
Share capital and premium
|
|
629
|
630
|
Treasury shares
|
|
(12)
|
(30)
|
Other reserves
|
|
(626)
|
(562)
|
Retained profits
|
|
2,024
|
2,365
|
Profit (loss) for the period/year attributable to equity holders
|
|
42
|
(344)
|
Equity attributable to owners of the Company
|
|
2,057
|
2,059
|
Non-controlling interests
|
|
188
|
215
|
TOTAL EQUITY
|
|
2,246
|
2,274
|
|
|
|
|
LIABILITIES
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
Debt and financing
|
10
|
5,303
|
5,578
|
Lease liabilities
|
10
|
871
|
897
|
Derivative financial instruments
|
13
|
6
|
14
|
Amounts due to non-controlling interests, associates and joint ventures
|
12
|
28
|
29
|
Payables and accruals for capital expenditure
|
|
447
|
485
|
Provisions and other non-current liabilities
|
|
310
|
328
|
Deferred tax liabilities
|
|
172
|
209
|
TOTAL NON-CURRENT LIABILITIES
|
|
7,136
|
7,540
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
Debt and financing
|
10
|
109
|
113
|
Lease liabilities
|
10
|
129
|
123
|
Put option liability
|
13
|
262
|
262
|
Derivative financial instruments
|
|
1
|
1
|
Payables and accruals for capital expenditure
|
|
213
|
345
|
Other trade payables
|
|
242
|
334
|
Amounts due to non-controlling interests, associates and joint ventures
|
12
|
313
|
311
|
Accrued interest and other expenses
|
|
454
|
445
|
Current income tax liabilities
|
|
82
|
71
|
Contract liabilities
|
|
92
|
90
|
Provisions and other current liabilities
|
|
507
|
511
|
TOTAL CURRENT LIABILITIES
|
|
2,406
|
2,608
|
TOTAL LIABILITIES
|
|
9,542
|
10,148
|
TOTAL EQUITY AND LIABILITIES
|
|
11,788
|
12,422
|
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 ended March
31, 2021
|
|
Unaudited interim condensed consolidated statement
of cash flows for the three-month period ended March 31, 2021
in millions of U.S. dollars
|
Notes
|
March 31, 2021
|
March 31, 2020
|
Cash flows from operating activities
|
|
|
|
Profit (loss) before taxes from continuing operations
|
|
27
|
(167)
|
Profit (loss) before taxes
|
|
27
|
(167)
|
Adjustments to reconcile to net cash:
|
|
|
|
Interest expense on leases
|
|
40
|
39
|
Interest expense on debt and other financing
|
|
108
|
108
|
Interest and other financial income
|
|
(3)
|
(6)
|
Adjustments for non-cash items:
|
|
|
|
Depreciation and amortization
|
4
|
324
|
296
|
Share of net profit in Guatemala and Honduras joint ventures
|
|
(61)
|
(45)
|
(Gain) on disposal and impairment of assets, net
|
|
17
|
(3)
|
Share based compensation
|
|
(3)
|
6
|
Loss from other joint ventures and associates, net
|
|
1
|
—
|
Other non-cash non-operating (income) expenses, net
|
5
|
(58)
|
159
|
Changes in working capital:
|
|
|
|
Decrease (increase) in trade receivables, prepayments and other current assets, net
|
|
(86)
|
(98)
|
Decrease (increase) in inventories
|
|
(10)
|
(22)
|
Increase (decrease) in trade and other payables, net
|
|
(73)
|
(11)
|
Total changes in working capital
|
|
(168)
|
(130)
|
Interest paid on leases
|
|
(36)
|
(37)
|
Interest paid on debt and other financing
|
|
(92)
|
(110)
|
Interest received
|
|
—
|
7
|
Taxes paid
|
|
(9)
|
(11)
|
Net cash provided by operating activities
|
|
87
|
106
|
Cash flows from (used in) investing activities:
|
|
|
|
Acquisition of subsidiaries, joint ventures and associates, net of cash acquired
|
|
(1)
|
—
|
Proceeds from disposal of subsidiaries and associates, net of cash disposed
|
|
8
|
17
|
Purchase of intangible assets and licenses
|
9
|
(83)
|
(91)
|
Purchase of property, plant and equipment
|
8
|
(171)
|
(179)
|
Proceeds from sale of property, plant and equipment
|
8
|
1
|
—
|
Dividends and dividend advances received from joint ventures
|
7
|
—
|
24
|
Cash (used in) provided by other investing activities, net
|
|
8
|
6
|
Net cash used in investing activities
|
|
(238)
|
(222)
|
|
|
|
|
Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
|
|
Unaudited interim condensed consolidated statement of cash flows for the three-month period ended March 31, 2021 (continued)
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
Proceeds from debt and other financing
|
10
|
160
|
706
|
Repayment of debt and other financing
|
10
|
(394)
|
(137)
|
Loan repayment from (advance to) joint venture
|
12
|
148
|
—
|
Lease capital repayment
|
|
(29)
|
(31)
|
Advances and dividends paid to non-controlling interests
|
|
(3)
|
—
|
Share repurchase program
|
|
—
|
(10)
|
Net cash provided by (used in) financing activities
|
|
(119)
|
528
|
Exchange impact on cash and cash equivalents, net
|
|
(2)
|
(30)
|
Net (decrease) increase in cash and cash equivalents
|
|
(273)
|
381
|
Cash and cash equivalents at the beginning of the year
|
|
875
|
1,164
|
Cash and cash equivalents at the end of the period
|
|
602
|
1,545
|
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 ended March
31, 2021
|
|
Unaudited interim condensed consolidated statements
of changes in equity for the three-month periods ended March 31, 2021 and March 31, 2020
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, 2019
|
101,739
|
(581)
|
153
|
480
|
(51)
|
2,372
|
(544)
|
2,409
|
271
|
2,680
|
Total comprehensive income for the period
|
—
|
—
|
—
|
—
|
—
|
(122)
|
(95)
|
(217)
|
(50)
|
(268)
|
Dividends to non controlling interests
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(4)
|
(4)
|
Purchase of treasury shares (ii)
|
—
|
(405)
|
—
|
—
|
(16)
|
2
|
—
|
(13)
|
—
|
(13)
|
Share based compensation
|
—
|
—
|
—
|
—
|
—
|
—
|
6
|
6
|
—
|
7
|
Issuance of shares under share-based payment schemes
|
—
|
324
|
—
|
(2)
|
29
|
(8)
|
(19)
|
—
|
—
|
—
|
Balance on March 31, 2020
|
101,739
|
(662)
|
153
|
479
|
(38)
|
2,244
|
(652)
|
2,185
|
216
|
2,401
|
|
|
|
|
|
|
|
|
|
|
|
Balance on December 31, 2020
|
101,739
|
(526)
|
153
|
478
|
(30)
|
2,020
|
(562)
|
2,059
|
215
|
2,274
|
Total comprehensive income for the period
|
—
|
—
|
—
|
—
|
—
|
42
|
(37)
|
5
|
(25)
|
(20)
|
Dividends to non controlling interests
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(2)
|
(2)
|
Purchase of treasury shares (ii)
|
—
|
(98)
|
—
|
—
|
(6)
|
2
|
—
|
(4)
|
—
|
(4)
|
Share based compensation
|
—
|
—
|
—
|
—
|
—
|
—
|
(3)
|
(3)
|
—
|
(3)
|
Issuance of shares under share-based payment schemes
|
—
|
418
|
—
|
(2)
|
24
|
2
|
(24)
|
—
|
—
|
—
|
Balance on March 31, 2021
|
101,739
|
(206)
|
153
|
476
|
(12)
|
2,066
|
(626)
|
2,057
|
188
|
2,246
|
|
(i)
|
Retained profits – includes profit for the year attributable to equity holders, of which at March 31, 2021, $298 million
(2020: $310 million) are not distributable to equity holders.
|
|
(ii)
|
During the three-month period ended March 31, 2020, Millicom repurchased 342,251 shares for a total amount of $10 million and withheld
approximately 62,000 shares for settlement of tax obligations, on behalf of employees under share-based compensation plans. For the three-month
period ended March 31, 2021 the amount presented corresponds only to withheld shares.
|
The accompanying notes are an integral part of these
unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
|
|
Notes to the unaudited interim condensed consolidated
statements
1. GENERAL
Millicom International Cellular S.A. (the “Company”
or “MIC SA”), a Luxembourg Société Anonyme, and its subsidiaries, joint ventures and associates (the “Group”
or “Millicom”) is a provider of cable and mobile services dedicated to emerging markets in Latin America and Africa. Millicom
provides high speed broadband and innovation around The Digital Lifestyle® services through its principal brand, TIGO.
On April 28, 2021, the Board of Directors authorized
these unaudited interim condensed consolidated financial statements for issuance.
2. SUMMARY OF ACCOUNTING POLICIES
These interim condensed consolidated financial statements
of the Group are unaudited. They are presented in US dollars ($) 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, 2020, 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, 2020 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.
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II.
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COVID-19 - Qualitative and quantitative assessment on business activities, financial situation and economic performance
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Impact on Millicom's markets
and business
Economic activity continued to
recover gradually in our markets, as most countries continued to ease lockdowns implemented at the beginning of the pandemic, and remittances
from the U.S. to Central America sustained double-digit growth. Temporary restrictions were implemented in some countries and regions,
as governments took steps to prevent a spike in new cases stemming from gatherings around the year-end and Easter holidays. However, these
new restrictions appear to have had a less severe impact on economic activity and on our business as compared to those implemented at
the onset of the pandemic. Meanwhile, vaccinations have begun, but less than 1% of the population in our markets had been vaccinated as
of the end of March 2021.
Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
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2. SUMMARY OF ACCOUNTING POLICIES
(Continued)
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II.
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COVID-19 - Qualitative and quantitative assessment on business activities, financial situation and
economic performance (continued)
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Impact of the crisis on accounting
matters
As a consequence of this crisis, Millicom identified
potential significant accounting implications in the following areas on previous quarters:
• Impairment
of non-financial assets/goodwill/investments in joint ventures
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•
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Impairment of trade receivables
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As of March 31, 2021, the above accounting areas have
not been significantly affected.
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III.
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New and amended IFRS standards
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The following changes to standards 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:
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•
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Amendment to IFRS 16, 'Leases' - COVID 19 Rent Concessions - effective for annual periods starting on June 1, 2020. While the Group
has implemented this amendment already in 2020, the IASB (in March 2021) extended its initial application beyond June 30, 2021, by one
additional year.
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•
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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.
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Main reliefs provided by the Phase
2 amendments relate to:
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•
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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 this will not result in an immediate gain or loss in the income statement but in 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;
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•
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Hedge accounting: That is, allowing hedge relationships that are directly affected by the reform to continue, though additional ineffectiveness
might need to be recorded.
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The following changes to standards not yet effective
are not expected to materially affect the Group:
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•
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Amendments effective for annual periods starting on January 1, 2022 (not yet endorsed by the EU):
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◦
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IFRS 3 'Business Combinations' - Reference to Conceptual Framework.
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◦
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IAS 16 'Property, Plant and Equipment' - Proceeds before intended use.
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◦
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IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' - Cost of fulfilling a contract.
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◦
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Annual improvements to IFRS Standards 2018-2020, affecting IFRS 1, IFRS 9, IFRS 16 and IAS 41.
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•
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Amendments effective for annual periods starting on January 1, 2023 (not yet endorsed by the EU):
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Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
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◦
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Amendments to IAS 1, 'Presentation of Financial Statements' : These amendments clarify that liabilities are classified as either current
or non-current, depending on the rights that exist at the end of the reporting period. The amendments also clarify what IAS 1 means when
it refers to the ‘settlement’ of a liability. The IASB also issued 'Disclosure of Accounting Policies' with amendments that
are intended to help preparers in deciding which accounting policies to disclose in their financial statements.
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◦
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IFRS 17, ‘Insurance contracts’, including amendments.
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◦
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IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors' - Definition of accounting estimates.
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Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
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3. ACQUISITION AND DISPOSAL OF SUBSIDIARIES, JOINT
VENTURES, ASSOCIATES AND OTHER NON-CONTROLLING INTERESTS
Acquisitions for the three-month periods ended
March 31, 2021 and 2020
There were no material acquisitions or disposals during
the three-month periods ended March 31, 2021 and 2020.
Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
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4. 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. Millicom is allocating corporate
costs to each segment based on their contribution to underlying revenue, and only non-recurring costs - such as M&A related costs-,
remain as unallocated. 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. The joint venture in Ghana is not reported
as if fully consolidated.
Revenue, operating profit (loss), EBITDA and other segment
information for the three-month periods ended March 31, 2021 and 2020, are as follows:
Three-months ended March 31, 2021
(in millions of U.S. dollars)
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Latin America
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Africa
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Unallocated
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Guatemala and Honduras(vii)
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Eliminations and
Transfers
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Total
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Mobile revenue
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833
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87
|
—
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(379)
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—
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541
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Cable and other fixed services revenue
|
563
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2
|
—
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(85)
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—
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479
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Other revenue
|
17
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—
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—
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(2)
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—
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15
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Service revenue (i)
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1,413
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89
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—
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(466)
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(1)
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1,035
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Telephone and equipment and other revenue (i)
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118
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—
|
—
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(64)
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—
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54
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Revenue
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1,530
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89
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—
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(530)
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(1)
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1,088
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Operating profit (loss)
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230
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9
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(26)
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(159)
|
61
|
115
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Add back:
|
|
|
|
|
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Depreciation and amortization
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413
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21
|
3
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(113)
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—
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324
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Share of profit in joint ventures in Guatemala and Honduras
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—
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—
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—
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—
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(61)
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(61)
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Other operating income (expenses), net
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(5)
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—
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22
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—
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—
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17
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EBITDA (ii)
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638
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31
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(1)
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(273)
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—
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394
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EBITDA from discontinued operations
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—
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—
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—
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—
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—
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—
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EBITDA incl discontinued operations
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638
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31
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(1)
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(273)
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—
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394
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Capital expenditure (iii)
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(282)
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(10)
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(2)
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62
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—
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(233)
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Changes in working capital and others (iv)
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(155)
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(5)
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—
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(10)
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—
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(171)
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Taxes paid
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(31)
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(5)
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(3)
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29
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—
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(9)
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Operating free cash flow (v)
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170
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10
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(6)
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(192)
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—
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(18)
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Total Assets (vi)
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12,876
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879
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3,758
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(5,063)
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(662)
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11,788
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Total Liabilities
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8,282
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902
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3,091
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(1,873)
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(860)
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9,542
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Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
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4. SEGMENT INFORMATION (Continued)
Three-months ended March 31, 2020
(in millions of U.S. dollars)
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Latin America
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Africa
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Unallocated
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Guatemala and Honduras (vii)
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Eliminations and transfers
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Total
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Mobile revenue
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843
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87
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—
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(373)
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—
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556
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Cable and other fixed services revenue
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539
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2
|
—
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(73)
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—
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468
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Other revenue
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13
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—
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—
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(2)
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—
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12
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Service revenue (i)
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1,395
|
89
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—
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(448)
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—
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1,036
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Telephone and equipment revenue (i)
|
110
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—
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—
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(58)
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—
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52
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Revenue
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1,504
|
89
|
—
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(506)
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—
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1,088
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Operating profit (loss)
|
219
|
7
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(3)
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(134)
|
45
|
134
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Add back:
|
|
|
|
|
|
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Depreciation and amortization
|
383
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23
|
3
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(114)
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—
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296
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Share of profit in joint ventures in Guatemala and Honduras
|
—
|
—
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—
|
—
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(45)
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(45)
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Other operating income (expenses), net
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(2)
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—
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—
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—
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—
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(3)
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EBITDA (ii)
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600
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30
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(1)
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(248)
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—
|
382
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EBITDA from discontinued operations
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—
|
—
|
—
|
—
|
—
|
—
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EBITDA incl discontinued operations
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600
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30
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(1)
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(248)
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—
|
382
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Capital expenditure (iii)
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(284)
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(10)
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(4)
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67
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—
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(232)
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Changes in working capital and others (iv)
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(64)
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—
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(59)
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—
|
—
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(124)
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Taxes paid
|
(33)
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(3)
|
—
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26
|
—
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(11)
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Operating free cash flow (v)
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219
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16
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(63)
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(156)
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—
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15
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Total Assets (vi)
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13,513
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925
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4,408
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(5,527)
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(584)
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12,736
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Total Liabilities
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8,201
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911
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4,338
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(2,104)
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(1,010)
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10,335
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(i)
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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.
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(ii)
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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.
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(iii) Excluding
spectrum and licenses of $20 million (2020: $39 million) .
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(iv)
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‘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.
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(v)
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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 taxes paid.
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(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 ended March
31, 2021
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4. SEGMENT INFORMATION (Continued)
Revenue from contracts with customers from continuing
operations
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Three-months ended March 31, 2021
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Three-months ended March 31, 2020
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in millions of U.S. dollars
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Timing of revenue recognition
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Latin America
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Africa
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Total Group
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Latin America
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Africa
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Total Group
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Mobile
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Over time
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445
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56
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501
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463
|
60
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522
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Mobile Financial Services
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Point in time
|
8
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31
|
40
|
7
|
27
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34
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Cable and other fixed services
|
Over time
|
477
|
2
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479
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466
|
2
|
468
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Other
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Over time
|
15
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—
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15
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12
|
—
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12
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Service Revenue
|
|
946
|
89
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1,035
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948
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89
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1,036
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Telephone and equipment
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Point in time
|
54
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—
|
54
|
52
|
—
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52
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Revenue from contracts with customers
|
|
999
|
89
|
1,088
|
999
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89
|
1,088
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5. OTHER NON-OPERATING (EXPENSES) INCOME, NET
The Group’s other non-operating (expenses) income,
net comprised the following:
in millions of U.S. dollars
|
Three-months ended March 31, 2021
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Three-months ended March 31, 2020
|
Change in fair value of derivatives (Note 13)
|
—
|
—
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Change in fair value in investment in Jumia (Note 14)
|
—
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(18)
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Change in fair value in investment in Helios Towers (Note 14)
|
18
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(61)
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Change in value of call option and put option liability (Note 13)
|
1
|
10
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Exchange gains (losses), net
|
37
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(90)
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Other non-operating income (expenses), net
|
1
|
1
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Total
|
58
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(159)
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Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
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6. 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
|
Three-months ended March 31, 2021
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Three-months ended March 31, 2020
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Basic and Diluted
|
|
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Net profit (loss) attributable to equity holders from continuing operations
|
42
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(122)
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Net profit (loss) attributable to equity holders from discontinued operations
|
—
|
—
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Net profit/(loss) attributable to all equity holders to determine the basic earnings (loss) per share
|
42
|
(122)
|
|
|
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in thousands
|
|
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Weighted average number of ordinary shares for basic and diluted earnings per share
|
101,334
|
101,123
|
|
|
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in U.S. dollars
|
|
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Basic and diluted
|
|
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EPS from continuing operations attributable to owners of the Company
|
0.41
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(1.21)
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EPS from discontinued operations attributable to owners of the Company
|
—
|
—
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EPS for the period attributable to owners of the Company
|
0.41
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(1.21)
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7. 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.
Refer to note 16 "Subsequent Events" for an
update on the signed agreement for the sale of AirtelTigo Ghana to the Government of Ghana. At March 31, 2021, the carrying value of the
Group's investment in AirtelTigo Ghana joint venture is zero.
At March 31, 2021, the equity accounted net assets of
Millicom's joint ventures in Guatemala and Honduras totaled $3,191 million (December 31, 2020: $3,072 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 a total reserve of $278 million (December
31, 2020: $278 million), $153 million (December 31, 2020: $153 million) represent statutory reserves that are unavailable to be distributed
to the Group. During the three-month period ended March 31, 2021, Millicom’s joint ventures did not pay any dividends or dividend
advances to the Company (December 31, 2020: $71 million).
in millions of U.S. dollars
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2021
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Guatemala(i)
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Honduras (i)
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Opening Balance at January 1, 2021
|
2,031
|
|
610
|
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Results for the period
|
54
|
|
7
|
|
Currency exchange differences
|
4
|
|
3
|
|
Closing Balance at March 31, 2021
|
2,089
|
|
620
|
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(i) Share of profit is recognized under ‘Share
of profit in the joint ventures in Guatemala and Honduras’ in the statement of income.
8. PROPERTY, PLANT AND EQUIPMENT
During the three-month period ended March 31, 2021,
Millicom added property, plant and equipment of $95 million (March 31, 2020: $108 million) and received $1 million from disposal of property,
plant and equipment (March 31, 2020: nil).
Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
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9. INTANGIBLE ASSETS
During the three-month period ended March 31, 2021,
Millicom added intangible assets of $25 million of which $0.3 million related to acquisition of spectrum and licenses, and $25 million
to additions of other intangible assets (March 31, 2020: $44 million out of which $21 million related to spectrum and licenses and $23
million to additions of intangible assets) and did not receive any proceeds from disposal of intangible assets (March 31, 2020: nil).
10. FINANCIAL OBLIGATIONS
Debt and financing
The most significant movements in debt and financing
for the three-month period ended March 31, 2021 were as follows:
Luxembourg
On February 22, 2021, Millicom redeemed 10% of the principal
outstanding of its Notes due 2026, 2028 and 2029 at a price of 103%. This redemption follows Millicom’s announcement dated February
11, 2021. Total consideration of approximately $180 million was funded from cash, consistent with the Company's decision to prioritize
debt reduction. The redemption premium of $5 million and the accelerated amortization of the upfront costs of $3 million, have been recorded
in the line "Interest and other financial expenses" in the statement of income during the three-month period ended March 31,
2021.
Colombia
On February 16, 2021, UNE EPM Telecomunicaciones S.A.
issued under the approved local bond program, a COP 485,680 million bond (approximately $138 million using the transaction date exchange
rate) with 3 maturities; Series 7 years at 5.56% fixed rate, Series 10 years at CPI plus 2.61% and 15 years at CPI plus 3.18% margin.
With the aim to improve UNE’s natural hedge against local currency, the bond proceeds were used on March, 26, 2021 to partially
repay 50% of the $300 million syndicated loan of Colombia Movil S.A. (originally due in December 2024).
Panama
In November 2020, Cable Onda executed an agreement with
Bank of Nova Scotia for $110 million, which were disbursed in two tranches. The first tranche of $85 million was disbursed in December
2020, and on March 1, 2021 the second and final tranche ($25 million) was disbursed to Cable Onda.
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 March 31, 2021
|
As at December 31, 2020
|
Due within:
|
|
|
One year
|
109
|
|
113
|
|
One-two years
|
256
|
|
107
|
|
Two-three years
|
379
|
|
439
|
|
Three-four years
|
595
|
|
811
|
|
Four-five years
|
480
|
|
467
|
|
After five years
|
3,592
|
|
3,755
|
|
Total debt and financing
|
5,412
|
|
5,691
|
|
As at March 31, 2021, 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 $285 million (December
31, 2020: $287 million).
The table below describes the outstanding and maximum
exposure under guarantees and the remaining terms of the guarantees as at March 31, 2021 and December 31, 2020.
Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
|
|
|
Bank and financing guarantees (i)
|
in millions of U.S. dollars
|
As at March 31, 2021
|
As at December 31, 2020
|
Terms
|
Outstanding and Maximum exposure
|
0-1 year
|
58
|
|
59
|
|
1-3 years
|
227
|
|
227
|
|
3-5 years
|
—
|
|
—
|
|
Total
|
285
|
|
287
|
|
(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
|
Three-months ended March 31, 2021
|
Three-months ended March 31, 2020
|
Interest expense on bonds and bank financing
|
(86)
|
|
(97)
|
|
Interest expense on leases
|
(40)
|
|
(39)
|
|
Early redemption charges
|
(5)
|
|
—
|
|
Other
|
(17)
|
|
(11)
|
|
Total interest and other financial expenses
|
(148)
|
|
(147)
|
|
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 March
31, 2021, the total amount of claims brought against Millicom and its subsidiaries is $257 million (December 31, 2020: $288 million).
The Group's share of the comparable exposure for joint ventures is $15 million (December 31, 2020: $14 million).
As at March 31, 2021, $43 million has been provisioned
by its subsidiaries for these risks in the consolidated statement of financial position (December 31, 2020: $45 million). The Group's
share of provisions made by the joint ventures was $3 million (December 31, 2020: $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.
Taxation
At March 31, 2021, the tax risks exposure of the Group's
subsidiaries is estimated at $317 million, for which provisions of $72 million have been recorded in tax liabilities; representing the
probable amount of eventual claims and required payments related to those risks (December 31, 2020: $339 million of which provisions of
$77 million were recorded). The Group's share of comparable tax exposure and provisions in its joint ventures amounts to $72 million (December
31, 2020: $69 million) and $5 million (December 31, 2020: $7 million), respectively.
Capital commitments
At March 31, 2021, the Company and its subsidiaries
had fixed commitments to purchase network equipment, other fixed assets and intangible assets of $453 million of which $300 million are
due within one year (December 31, 2020: $564 million of which $400 million are due within one year). The Group’s share of commitments
in the joint ventures is $66 million and $37 million. (December 31, 2020: $69 million and $52 million).
Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
|
|
12. RELATED PARTY TRANSACTIONS
The following transactions were conducted with related
parties:
in millions of U.S. dollars
|
Three-months ended March 31, 2021
|
Three-months ended March 31, 2020
|
Expenses
|
|
|
Purchases of goods and services from Miffin
|
(49)
|
|
(54)
|
|
Purchases of goods and services from EPM
|
(10)
|
|
(9)
|
|
Other expenses
|
(5)
|
|
(4)
|
|
Total
|
(64)
|
|
(67)
|
|
in millions of U.S. dollars
|
Three-months ended March 31, 2021
|
Three-months ended March 31, 2020
|
Income / gains
|
|
|
Sale of goods and services to Miffin
|
89
|
|
78
|
|
Sale of goods and services to EPM
|
4
|
|
3
|
|
Other income / gains
|
1
|
|
1
|
|
Total
|
93
|
|
82
|
|
The Group had the following balances with related parties:
in millions of U.S. dollars
|
As at March 31, 2021
|
As at December 31, 2020
|
Liabilities
|
|
|
Payables to Guatemala joint venture(i)
|
231
|
|
231
|
|
Payables to Honduras joint venture(ii)
|
104
|
|
103
|
|
Payables to EPM
|
18
|
|
20
|
|
Payables to Panama non-controlling interests
|
1
|
|
1
|
|
Other accounts payable
|
1
|
|
1
|
|
Total
|
354
|
|
356
|
|
|
(i)
|
Interest bearing shareholder loans of which $28 million are
due after more than one year.
|
|
(ii)
|
Mainly advances for dividends expected to be declared in
2021
|
Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
|
|
12. RELATED PARTY TRANSACTIONS (Continued)
in millions of U.S. dollars
|
As at March 31, 2021
|
As at December 31, 2020
|
Assets
|
|
|
Receivables from Guatemala joint venture(i)
|
55
|
|
206
|
|
Receivables from Honduras joint venture
|
77
|
|
84
|
|
Receivables from EPM
|
3
|
|
3
|
|
Receivables from Panama non-controlling interests
|
1
|
|
1
|
|
Other accounts receivable
|
5
|
|
5
|
|
Total
|
141
|
|
299
|
|
|
(i)
|
In March 2021, the Guatemala joint venture prepaid $147.5
million of principal (out of the $193 million Millicom 's shareholder loan, granted in October 2020 and repayable by January 13, 2022,
at the latest).
|
13. FINANCIAL INSTRUMENTS
Other than the items disclosed below, the fair values
of financial assets and financial liabilities approximate their carrying values as at March 31, 2021 and December 31, 2020:
in millions of U.S. dollars
|
Carrying value
|
Fair value
|
|
As at March 31, 2021
|
As at December 31, 2020
|
As at March 31, 2021
|
As at December 31, 2020
|
Financial liabilities
|
|
|
|
|
Debt and financing
|
5,412
|
|
5,691
|
|
5,639
|
|
5,572
|
|
|
|
|
|
|
|
|
|
|
|
(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 March 31, 2021, the fair values of the swaps amount to an asset
of $9 million (December 31, 2020: an asset of $23 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 March 31,
2021, the fair value of El Salvador amount to a liability of $3 million (December 31, 2020: a liability of $3 million), Costa Rica swaps
amount to a liability of $5 million and an asset of $2 million (December 31, 2020: liability of $5 million and asset of $1 million) and
the fair value of Colombia swap amounts to an asset of $5 million (December 31, 2020: a liability of $7 million).
Interest rate and currency swaps are measured with reference
to Level 2 of the fair value hierarchy.
Call and put options – Panama
As of March 31, 2021, management used the same values
as those used for Q4 2020 closing since there were no significant developments during Q1 2021 indicating a significant change in Cable
Onda's valuation.
As a consequence, the put option liability amounts to
$262 million.
The call option, having a strike price at initial Transaction
price +10% interest p.a (exercisable from June 14, 2021 to July 14, 2022), has been valued at $3 million.
There are no other derivative financial instruments
with a significant fair value at March 31, 2021.
Unaudited Interim Condensed Consolidated Financial Statements
for the three-month period ended March
31, 2021
|
|
14. EQUITY INVESTMENTS
As at March 31, 2021 and December 31, 2020, 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
|
March 31, 2021
|
December 31, 2020
|
Investment in HT
|
178
|
|
160
|
|
Equity investment - total
|
178
|
|
160
|
|
During June and November 2020, Millicom disposed of
a total of 85 million shares that it owned in Helios Towers plc ("HT"). As a result of these transactions, Millicom owns a remaining
shareholding of 7.6% in HT, valued at $178 million and $160 million (level 1) at March 31, 2021 and December 31, 2020, respectively (using
a share price of GBP 1.69 and GBP 1.53 , respectively) . The changes in fair value are shown under 'Other non-operating (expenses) income,
net' (see note 5).
15. 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 seeking to reach an agreement with the Tanzanian government regarding the conditions of the IPO,
taking into account the proposed sale of our Tanzanian operation.
16. SUBSEQUENT EVENTS
Africa divestiture
On April 19, 2021,
we announced that we have signed agreements for the sale of our operations in Tanzania and for the disposal of our stake in the AirtelTigo
joint venture in Ghana. In Tanzania, Millicom agreed to sell its entire operations to a consortium led by Axian, a pan-African group that
was part of the consortium that acquired Millicom’s operations in Senegal in 2018. In Ghana, Millicom along with its joint venture
partner, Bharti Airtel Limited, have signed a definitive agreement for the transfer of AirtelTigo to the Government of Ghana. Millicom
recorded a $25 million charge in Q1 as part of this agreement. Completion of each transaction is subject to regulatory approvals. The
provision charge is recorded under the line "Other operating income (expenses), net" in the statement of income.
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: April 29, 2021
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