"In 2021, we accelerated
our investments to meet the heightened demand for connectivity we see in our markets. The immediate impact of this investment is impressive:
robust customer growth, including record 1.1 million postpaid mobile and 415,000 cable subscriber net additions, all reflecting the quality
of our networks and the strength of our brand. As a result, our service revenue and EBITDA grew 6.7%, our fastest organic growth rate
in years.
We continued to invest to support
the growth of our cable business, which now represents 40% of our Latam service revenue and grew 9.3% in 2021, and we also deployed capital
to gain scale in the Colombian mobile market, leading to a significant acceleration in customer and revenue growth during the second
half of the year and positioning us for continued rapid growth and improved profitability in that market in 2022. Finally, we acquired
the remaining 45% equity interest in our Guatemala operations in a highly accretive transaction.
During the past year, we made
great strides toward significantly advancing our ESG agenda. On climate, we have submitted Near-Term Science-Based Targets, and we have
action plans that will allow us to meet these goals. Meanwhile, we have continued to strengthen employee engagement and maintained our
position as the top ranked telco in the region in the 2021 Great Place to Work survey.
With a clear sense of purpose,
the passion of our Sangre Tigo, world-class governance, as well as robust networks and a thriving brand, we have built a solid foundation
upon which to deliver sustainable growth and shareholder value creation in 2022 and for years to come."
In 2022, we plan to accelerate
expansion of our fixed network to reach one million additional homes, of which over half are expected to be deployed using fiber-to-the-home
(FTTH) technology. We expect the cost of this accelerated network deployment will be more than offset by a moderation of our investments
in our mobile networks, as we are now in the final stages of significant modernization and expansion projects undertaken over the past
24 months.
We expect these investments will
help sustain solid organic service revenue, EBITDA and operating cash flow growth. Specifically, we are targeting organic OCF growth
of around 10% per year over the next three years2 on average, reflecting expected mid-single-digit organic service revenue
growth and annual capex of around $1.0 billion.
On January 27, 2022, our principal
subsidiary in Guatemala, Comcel, completed the issuance of a new 10-year $900 million Bond with a coupon of 5.125%. Proceeds from this
bond as well as cash were used to repay a significant portion of the bridge financing that was used to fund the acquisition of the remaining
45% equity interest in our Tigo Guatemala operations. As of February 8, 2022, a balance of $450 million remained unpaid under the initial
$2.15 billion bridge loan agreement.
On January 13, 2022, we completed
the issuance of a new 5-year sustainability bond raising SEK 2.25 billion (approximately $252 million) at a fully swapped rate of SOFR
plus 3.496%. Proceeds will be used to fund investments in accordance with the Company's sustainability framework. This bond has been
fully hedged against foreign exchange fluctuations.
In Q4 2021, group revenue increased
23.7% year-on-year to $1,347 million due to strong customer growth in all business lines and countries and the consolidation of our Guatemala
operations beginning on November 12, 2021, compared to a softer top line in some parts of the business due to the negative impact of
the COVID-19 in Q4 2020 and due to the impact of currency translation. Cost of sales increased 31.5% in Q4 2021 compared to Q4 2020,
due to the effect of lower bad debt provisions in Q4 2020 and the consolidation of Guatemala.
Operating expenses increased 19.4%
($79 million) year-on-year to $483 million, reflecting increased sales and marketing costs to support customer growth in Q4 2021 as well
as the consolidation of Guatemala, as compared to Q4 2020 which was impacted by lower commercial activity in our markets and weaker foreign
exchange rates.
Depreciation increased 3.3% ($8
million) year-on-year to $238 million, as network modernization activities which accelerated the depreciation of older infrastructure
in 2020 were offset by the consolidation of Guatemala. Amortization increased by 7.5% ($6 million) to $79 million. Our share of profits
in joint ventures decreased to $25 million in Q4 2021 from $71 million in Q4 2020 due to the consolidation of our Guatemala operations
which are now fully consolidated. Other operating income of $14 million compares to an expense of $43 million in Q4 2020 related to the
impairment of a loan with our former Ghana joint venture.
As a result of the above factors, operating profit was
$212 million in Q4 2021, up 71.7% year-on-year.
Net financial expenses decreased
$22 million year-on-year to $140 million, reflecting debt repayment and refinancing activity over the past year, and due to expenses
in Q4 2020 related to the early redemption of the 2025 MICSA bond.
As a result of the acquisition
of the remaining 45% shareholding in Guatemala, the Group revalued its previously held 55% investment at the fair value implied by the
deal, as required under IFRS. This resulted in the recognition of a gain of $670 million with a corresponding increase in intangibles
and goodwill. Other non-operating expense of $12 million reflects foreign exchange losses and compares to income of $41 million in Q4
2020.
Charges for taxes increased to
$105 million in Q4 2021 from $54 million in Q4 2020. The increase was mainly due to the consolidation of our operations in Guatemala,
higher profitability in the operations of the Group and a one-off tax provision in Tanzania, as well as the net effect of changes in
deferred tax assets in Colombia. Non-controlling interests were a $20 million gain in Q4 2021, reflecting our partners' share of net
losses in Colombia, up from $0.5 million in Q4 2020.
As a result of these factors,
net profit attributable to owners of the company was $643 million, or $6.41 per share, as compared to a net loss
of $56 million ($0.55 loss per share) in Q4 2020. The weighted average number of shares during the quarter was 100.30 million, a decline
of 0.9% year-on-year, as share repurchases more than offset issuance under the employee share-based compensation plans. As of December
31, 2021, we had 101,739,217 shares outstanding, including 1,538,256 held in treasury.
During FY 2021, Operating Free
Cash Flow (OFCF) was $619 million, a decrease of $38 million compared to $657 million in FY 2020. The decline was largely due to increased
working capital due to better trade payables in 2020, as well as higher capex, which more than offset the increase in EBITDA during the
period.
In FY 2021, dividends and advances
received from our joint ventures were $13 million, compared to $71 million received in FY 2020. This reflects the decision to prioritize
use of Guatemala's robust cash flow generation to reduce gross debt in Guatemala during 2021. In early 2022, we issued a new $900 million
bond in Guatemala after our acquisition of the minority stake of this businesses.
Finally, dividends paid to non-controlling
interests in Colombia were $6 million in FY 2021. As a result of these factors, Equity Free Cash Flow (EFCF) for FY 2021 was $135 million,
as compared to $172 million in FY 2020. Further adjusting for lease principal repayments, EFCF after leases was negative $2 million in
FY 2021, a decline of $58 million from $56 million in FY 2020. The slightly negative EFCF after leases reflects our decision to prioritize
Guatemala's acquisition debt reduction; including Guatemala and Honduras as if fully consolidated for the full year, EFCF after leases
was $490 million in FY 2021, up $101 million from $389 million in FY 2020.
Debt
Debt
information
|
Gross
Debt
|
Cash
|
Net
|
Leases
|
Financial
Obligations
|
($
millions)
|
USD
|
LCY
|
Total
|
|
Debt
|
|
Gross
|
Net*
|
Latin
America
|
692
|
2,843
|
3,535
|
644
|
2,891
|
968
|
4,504
|
3,859
|
Africa
|
150
|
38
|
188
|
26
|
163
|
180
|
368
|
343
|
Corporate
|
3,985
|
36
|
4,020
|
260
|
3,761
|
18
|
4,039
|
3,779
|
Millicom
Group (IFRS)
|
4,827
|
2,917
|
7,744
|
930
|
6,814
|
1,167
|
8,911
|
7,981
|
Honduras
JV
|
177
|
101
|
279
|
39
|
240
|
61
|
340
|
301
|
Underlying
(non-IFRS)
|
5,004
|
3,018
|
8,023
|
969
|
7,054
|
1,228
|
9,251
|
8,282
|
Total
Proportionate (non-IFRS)
|
4,892
|
2,193
|
7,357
|
831
|
6,526
|
1,036
|
8,392
|
7,562
|
* Net Debt and Net financial obligations are
non-IFRS measures. See page 13 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures.
Cash includes term deposits of $35 million as of December 31, 2021 and Honduras as if fully consolidated..
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 Honduras as if fully consolidated. On November 12, 2021, Millicom acquired the remaining 45% equity interest in
its joint venture business in Guatemala and as a result Millicom fully consolidates Tigo Guatemala as of this date.
As of December 31, 2021, underlying
gross debt was $8,023 million, an increase of $2,020 million during the quarter due to financing of the Guatemala transaction. As of
December 31, 2021, $1.65 billion remained outstanding out of the initial $2.15 billion bridge financing. Our underlying gross debt includes
Honduras, which had $279 million of gross debt as of December 31, 2021, a decrease of $41 million during the quarter.
Excluding the remaining bridge
loan balance, approximately 60% of underlying gross debt at December 31, 2021 was in Latam, 3% in Africa, and the remaining 37% at the
corporate level. Over the past year, we have lowered our average effective interest rate to 5.5% from 5.6% while also improving the mix
to 47% in local currency or swapped for local currency as of Q4 2021, up from 44% as of Q4 2020. In addition 78% was at fixed rates or
swapped for fixed rates and the average maturity of 5.8 years, in line with our targets. On our dollar-denominated debt1,
the average rate was 4.8% with an average maturity of 6.4 years, as of December 31, 2021, as compared to an average rate of 5.0% and
an average maturity of 6.6 years as of September 30, 2021.
Our underlying cash position was
$969 million as of December 31, 2021, a decrease of $15 million compared to $984 million as of September 31, 2021. Of our underlying
cash balance, 60% was held in U.S. dollars. As a result, our underlying net debt was $7,054 million as of December 31, 2021, an increase
of $2,035 million during the quarter, reflecting the Guatemala transaction.
_____________________
1
Including also SEK denominated bonds
Earnings Release
Q4 2021
|
|
In addition, as of December 31,
2021, we had underlying lease liabilities of $1,228 million, which represented 13% of underlying gross financial obligations. Including
these lease liabilities, underlying net financial obligations were $8,282 million as of December 31, 2021, an increase of $2,046 million
during the quarter.
Proportionate leverage2,
which captures our proportional ownership in each country as well as lease obligations, was 3.36x as of December 31, 2021. This is up
from 2.81x as of September 31, 2021 due to the increase in debt used to fund the Guatemala acquisition. Excluding the impact of leases,
proportionate leverage would have been 3.30x3, compared to 2.67x as of September 31, 2021. Proforma for the planned $750 million
rights issue4, proportionate leverage would be 3.03x.
_____________________
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 13 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures.
4
As announced in our press release on November 12, 2021.
Earnings Release
Q4 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
our Honduras joint venture as if it were fully consolidated, as this reflects the way our management reviews and uses internally reported
information to make decisions about operating matters. Although we acquired the remaining 45% equity interest in our Guatemala joint
venture business on November 12, 2021, the acquisition has no impact on the way we present our Latin America segment because it already
included our operations in Guatemala as if they were fully consolidated. Our Africa segment does not include our former 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 in our markets, while remittances from the U.S. to Central America sustained double-digit growth year-on-year. Meanwhile, vaccination
rates improved to above 50% in Colombia, Costa Rica, El Salvador and Panama, but remained below 30% in Guatemala. During the quarter,
the number of new COVID cases was stable, and there were few restrictions on mobility. Currencies in our markets were generally stable,
except for the Colombian peso and the Costa Rican colon which both depreciated approximately 2% during the quarter. Foreign exchange
rates and movements are presented on page 16.
Earnings Release
Q4 2021
|
|
Latam segment - Key Performance
Indicators
Key
Performance Indicators (‘000)
|
Q4
2021
|
Q3
2021
|
Q2
2021
|
Q1
2021
|
Q4
2020
|
Q4
2021 vs Q4 2020
|
Mobile
customers
|
44,881
|
43,901
|
43,137
|
42,805
|
41,734
|
7.5%
|
Of
which 4G customers
|
21,447
|
20,327
|
19,321
|
18,830
|
18,243
|
17.6%
|
Of
which postpaid subscribers
|
6,019
|
5,682
|
5,352
|
5,060
|
4,920
|
22.3%
|
Mobile
ARPU ($)
|
6.4
|
6.4
|
6.4
|
6.5
|
6.8
|
(5.8)%
|
Total
homes passed
|
12,686
|
12,539
|
12,403
|
12,248
|
12,229
|
3.7%
|
Of
which HFC homes passed
|
12,413
|
12,263
|
12,113
|
11,949
|
11,888
|
4.4%
|
Total
customer relationships
|
4,893
|
4,857
|
4,792
|
4,701
|
4,545
|
7.7%
|
Of
which HFC customer relationships
|
4,148
|
4,086
|
3,998
|
3,899
|
3,733
|
11.1%
|
HFC
revenue generating units
|
8,665
|
8,480
|
8,273
|
7,971
|
7,602
|
14.0%
|
Of
which Broadband Internet
|
3,790
|
3,728
|
3,642
|
3,535
|
3,356
|
12.9%
|
Home
ARPU ($)
|
27.9
|
28.1
|
28.6
|
28.8
|
28.0
|
(0.3)%
|
Mobile services
We ended Q4 2021 with 44.9 million
customers, an increase of 980,000 during the quarter, including 337,000 net additions in postpaid, with over 263,000 of these coming
from Colombia, where our investments in spectrum, network and distribution channels have extended our reach, improved customer experience,
and are driving robust customer gains. In prepaid, we added 643,000 customers during the quarter, ending the period with 38.9 million,
up 6% year-on-year, with Colombia and Guatemala accounting for the majority of the net gains. We added 1.1 million new 4G smartphone
data users, and these now account for 48% of our mobile customer base, up from 44% in Q4 2020.
Mobile ARPU was flat sequentially
at $6.4, declining 5.8% compared to Q4 2020. ARPU increased in Nicaragua and Panama, where we have invested to upgrade our networks over
the past two years.
Cable and other fixed services
In Home, our residential cable
business, we continued to experience healthy demand for our services, and we added 62,000 HFC customer relationships in the quarter,
capping a record year with more than 415,000 new customers added in 2021. At the end of Q4, our networks passed 12.7 million homes, an
increase of 147,000 during the quarter, as we continued to expand our network mainly in Colombia, Paraguay, Bolivia and El Salvador.
As a result, penetration on our HFC network increased to 33.4%, an increase of 2.0 percentage points from 31.4% in Q4 2020. Home ARPU
averaged $27.9 for the quarter and was broadly stable both year-on-year and compared to Q3 2021.
Earnings Release
Q4 2021
|
|
Latam segment financial results
Latam
Financial Highlights*
|
Q4
2021
|
Q4
2020
|
%
change
|
Organic
% change
|
FY
2021
|
FY
2020
|
%
change
|
Organic
% change
|
($m,
unless otherwise stated)
|
Revenue
|
1,597
|
1,534
|
4.1%
|
5.1%
|
6,220
|
5,843
|
6.4%
|
6.9%
|
Service
revenue
|
1,458
|
1,394
|
4.6%
|
5.7%
|
5,716
|
5,377
|
6.3%
|
6.7%
|
Mobile
|
863
|
837
|
3.0%
|
|
3,372
|
3,220
|
4.7%
|
|
Cable
and other fixed services
|
578
|
539
|
7.3%
|
|
2,275
|
2,097
|
8.5%
|
|
Other
|
17
|
17
|
1.3%
|
|
70
|
60
|
16.4%
|
|
EBITDA
|
617
|
634
|
(2.7)%
|
0.4%
|
2,498
|
2,360
|
5.9%
|
6.7%
|
EBITDA
margin
|
38.7%
|
41.3%
|
(2.7)
pt
|
|
40.2%
|
40.4%
|
(0.2)
pt
|
|
Capex
|
417
|
358
|
16.4%
|
|
1,111
|
941
|
18.0%
|
|
OCF
|
200
|
276
|
(27.4)%
|
(18.6)%
|
1,387
|
1,418
|
(2.2)%
|
(0.5)%
|
* 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 13 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures.
In Q4 2021, revenue in our Latam
segment increased 4.1% year-on-year to $1,597 million, while service revenue increased 4.6% to $1,458 million. Adjusting for currency,
organic service revenue growth was 5.7% year-on-year, benefiting from a second consecutive quarter of positive growth in all countries
and business units.
El Salvador sustained its strong
performance, with service revenue growing 11.1%, with all three business lines growing sequentially and benefiting from recent spectrum
and network investments in that country. In Panama, growth across all business units, including double digit mobile and B2B growth, drove
10.2% service growth. In Colombia, organic service revenue growth in consumer mobile accelerated to 12.9% and led to 6.4% growth in that
country. Finally, organic service revenue grew 13.1% in Nicaragua and 10.0% in Costa Rica.
By business unit, Home service
revenue grew 10.0% organically, fueled by customer growth and stable ARPU. In our consumer Mobile business, organic service revenue grew
4.2% year-on-year, with both prepaid and postpaid growing. Finally, B2B service revenue increased 3.3% organically, as the majority of
countries saw improved B2B performance during the quarter as the macroeconomic context improved in most countries.
EBITDA for our Latam segment was
$617 million in Q4 2021 and decreased 2.7% year-on-year due to effect of weaker currencies and increased investments related to the expansion
of our Fintech hub, which added $8 million to corporate costs in the quarter. EBITDA of $634 million in Q4 2020 was positively impacted
by a $20 million reversal in bad debt provisions made earlier in the year. EBITDA growth was very strong in Panama (19.3%), and Nicaragua
(12.6%), and Colombia saw a notable increase in EBITDA compared to Q3. EBITDA declined in some countries due to largely to the reversal
of bad debt provisions in Q4 2020.
Earnings Release
Q4 2021
|
|
Capex in Latin America was $417
million in the quarter. In mobile, we added more than 900 points of presence to our 4G network, and we ended the quarter with more than
17,500, an increase of 17% year-on-year. At the end of Q4 2021, our 4G networks covered approximately 78% of the population (approximately
120 million in our markets), up from approximately 74% at Q4 2020.
Operating Cash Flow (OCF) decreased
27.4% year-on-year to $200 million in Q4 2021, an decrease of 18.6% on an organic basis on higher capex. Including our Africa segment,
underlying OCF was $210 million for the quarter and $1.45 billion for the year, surpassing our target of at least $1.40 billion
for the year.
Africa segment - Segment financial
results and Key Performance Indicators
Please refer to Note 4 of our
Unaudited Interim Condensed Consolidated Financial Statements for more details on our segments.
Africa
Financial Highlights*
|
Q4
2021
|
Q4
2020
|
%
change
|
FY
2021
|
FY
2020
|
%
change
|
($m,
unless otherwise stated)
|
Revenue
|
92
|
97
|
(5.0)%
|
357
|
366
|
(2.7)%
|
Service
revenue
|
92
|
97
|
(4.9)%
|
357
|
366
|
(2.7)%
|
EBITDA
|
25
|
34
|
(27.7)%
|
111
|
125
|
(11.0)%
|
EBITDA
margin %
|
26.8%
|
35.3%
|
(8.4)
pt
|
31.2%
|
34.2%
|
(2.9)
pt
|
Capex
|
16
|
13
|
27.9%
|
41
|
41
|
0.7%
|
Key
Performance Indicators ('000)
|
|
|
|
|
|
Mobile
customers
|
13,547
|
13,111
|
3.3%
|
13,547
|
13,111
|
3.3%
|
Tigo
Money customers
|
7,311
|
7,141
|
2.4%
|
7,311
|
7,141
|
2.4%
|
Mobile
ARPU ($)
|
2.2
|
2.4
|
(10.9)%
|
2.1
|
2.3
|
(8.7)%
|
* Service revenue, EBITDA and Capex are non-IFRS
measures. See page 13 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures.
Our Africa segment comprises our
Tanzania operations. On April 19, 2021, we announced the signing of 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
remains subject to regulatory approvals. On 24 December 2021, we received approval from the Tanzania Communications Regulatory Agency
(TCRA). Although additional approvals remain pending, we expect the transaction will receive all the necessary approvals to be completed.
Service revenue for our Africa
segment decreased 4.9% year-on-year to $92 million in Q4 2021, while EBITDA declined 27.7% year-on-year to $25 million. The decline in
performance was mostly due to a reduction in customer usage of mobile financial services, which make up a third of our revenues, due
to a new government levy imposed on many mobile money transactions, as well as a government claim. Capex of $16 million was 27.9% higher
year-on-year, resulting in OCF of $8 million, a drop of 60.8% year-on-year.
Earnings Release
Q4 2021
|
|
ESG highlights – Q4 2021
Revamping our ESG approach
2021 was a watershed year for
our work in ESG, most of which we formerly addressed under the Corporate Responsibility umbrella. While the concept is far from new to
us, the Executive Team led a comprehensive review of our existing work areas to update and upgrade our approach. Much of the work has
been underway for many years, which is reflected in mature programs and robust performance. This nomenclature allows us to reorganize
key focus areas, further enhancing internal collaboration, management and alignment on material issues, while improving our public disclosures
in response to the increasing stakeholder demand for ESG performance data.
Environment
As per our public commitments,
a cross-functional team worked throughout 2021 to set new emissions reduction targets, since our previous ones, set in 2015, had been
met ahead of time. We based our analysis on the Science-Based Target methodology, and we submitted our first near-term Science-Based
Targets in Q4, consistent with a climate scenario limiting global warming to 1.5°C for Scopes 1 and 2, and to 2°C for Scope 3
emissions. Furthermore, we have joined the Business Ambition for 1.5°C campaign and committed to set net-zero targets under the Science-Based
Targets Initiative standard.
Society
Digital Education
We have officially initiated the
soft launch of our Conectadas App in five countries through our local implementing partners. This initial pilot will allow us to optimize
the App ahead of our launch planned for March. The content for the App has been developed by the Grameen Foundation and covers both the
use of online tools for entrepreneurs as well as personal finances and the use of mobile financial services.
With our partner AHYU, we organized
the first regional Maestr@s Conectad@s virtual congress with more than 30,000 participants from Latin America. The congress featured
11 experts in the field of education who shared key insights on the future of education and their role as educators.
Finally, we ended 2021 with the
Fundación Real Madrid partnership officially launched in six of our Latam operations Our programs have already reached over 1,600
beneficiaries and are projected to reach over 11,000 over a timeframe of 5 years.
Supply Chain Management
We surpassed our intended 2021
goal of training 75% of strategic suppliers in our ESG training, putting us well on track to reaching our 2022 goal of training 100%
of our suppliers in that same category.
Earnings Release
Q4 2021
|
|
Governance
Compliance
In Q4 2021, we finished our annual
mandatory Compliance training with a completion rate of 99%. In November and December, we celebrated our Compliance Week and Anti-Corruption
Day, respectively, hosting various activities that included global senior management and issuing communications that reinforced awareness
amongst all personnel.
As part of our continuous improvement
efforts, we concluded the revision of our Code of Conduct, as well as our Anti-Corruption, Speak Up, and AML (Anti Money Laundering)
policies, which have been approved at board level and expected to be formally launched in Q1 2022. All other Corporate Compliance Policies
are also being updated.
Earnings Release
Q4 2021
|
|
Video conference details
A video conference
to discuss these results will take place on February 11 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. After
registering, participants will receive a confirmation email containing details about joining the video conference. Alternatively, participants
can join in a listen-only mode, by dialing any of the following numbers and using webinar ID number 871-5924-8681. 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
2022
Date
|
Event
|
February 14
|
Virtual Investor Day (Link
to register)
|
February 28
|
EGM
|
April 28
|
Q1 2022 results
|
May 4
|
2022 AGM1
|
July 28
|
Q2 2022 results
|
October 27
|
Q3 2022 results
|
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
|
|
|
Yocasta Valdez, Group Manager Digital
Media & Communications
|
Sarah Inmon, Director Investor Relations
|
+1 (305) 929-541
|
+1 (786) 628-5303
|
press@millicom.com
|
investors@millicom.com
|
About Millicom
Millicom (NASDAQ U.S.: TIGO, Nasdaq Stockholm:
TIGO_SDB) is a leading provider of fixed and mobile telecommunications services dedicated to emerging markets in Latin America and Africa.
Through our TIGO® and Tigo Business® brands, we provide a wide range of digital services and products, including TIGO Money for
mobile financial services, TIGO Sports for local entertainment, TIGO ONEtv for pay TV, high-speed data, voice, and business-to-business
solutions such as cloud and security. As of December 31, 2021, Millicom employed approximately 21,000 people and provided mobile services
through its digital highways to around 58 million customers, with a fiber-cable footprint of more than 12 million homes passed. Founded
in 1990, Millicom International Cellular S.A. is headquartered in Luxembourg. For more information, visit: millicom.com.
Connect with Millicom on Twitter, Instagram,
Facebook and LinkedIn.
____________
1 The deadline
for submitting additional items to the 2022 AGM is April 12, 2022.
Earnings Release
Q4 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 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, laws and regulations which require the provision of services to customers without
charging or the ability to disconnect such services during the COVID-19 pandemic, 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
Q4 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, installation fees 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. In respect of the segments Latam or Africa it is shown after the allocation of Corporate Costs and inter-company eliminations.
EBITDA after Leases
(EBITDAaL) represents EBITDA excluding lease interest and principal 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.
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 pledge and time 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.
Earnings Release
Q4 2021
|
|
Leverage
is the ratio of net financial obligations over LTM (Last twelve month) EBITDA, proforma for acquisitions
made during the last twelve months.
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
Q4 2021
|
|
Non-IFRS Reconciliations
Reconciliation from Reported Growth to Organic Growth
for the Latam segment1
Latam
Segment ($ millions)
|
Revenue
|
Service
Revenue
|
EBITDA
|
OCF
|
Q4 2021
|
Q4 2021
|
Q4 2021
|
Q4
2021
|
A-
Current period
|
1,597
|
1,458
|
617
|
200
|
B-
Prior year period
|
1,534
|
1,394
|
634
|
276
|
C-
Reported growth (A/B)
|
4.1%
|
4.6%
|
(2.7)%
|
(27.4)%
|
D-
FX impact
|
(1.0)%
|
(1.0)%
|
(0.7)%
|
(1.6)%
|
E-
Other*
|
(0.1)%
|
(0.1)%
|
(2.4)%
|
(7.1)%
|
F-
Organic Growth (C-D-E)
|
5.1%
|
5.7%
|
0.4%
|
(18.6)%
|
Latam
Segment ($ millions)
|
Revenue
|
Service
Revenue
|
EBITDA
|
OCF
|
FY 2021
|
FY 2021
|
FY 2021
|
FY
2021
|
A-
Current period
|
6,220
|
5,716
|
2,498
|
1,387
|
B-
Prior year period
|
5,843
|
5,377
|
2,360
|
1,418
|
C-
Reported growth (A/B)
|
6.4%
|
6.3%
|
5.9%
|
(2.2)%
|
D-
FX impact
|
(0.3)%
|
(0.3)%
|
(0.2)%
|
(0.4)%
|
E-
Other*
|
(0.1)%
|
(0.1)%
|
(0.6)%
|
(1.4)%
|
F-
Organic Growth (C-D-E)
|
6.9%
|
6.7%
|
6.7%
|
(0.5)%
|
*Organic growth is calculated by re-basing all periods
to the budget FX rates of the current year. This creates small differences that are captured in "Other". 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,
and this creates additional differences that are also included in "other".
ARPU reconciliations
Latam
Segment - Mobile ARPU Reconciliation
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Mobile
service revenue ($m)
|
863
|
837
|
3,372
|
3,220
|
Mobile
Service revenue ($m) from non Tigo customers ($m) *
|
(10)
|
(10)
|
(31)
|
(36)
|
Mobile
Service revenue ($m) from Tigo customers (A)
|
852
|
827
|
3,341
|
3,185
|
Mobile
customers - end of period (000)
|
44,881
|
41,734
|
44,881
|
41,734
|
Mobile
customers - average (000) (B) **
|
44,391
|
40,609
|
43,292
|
39,658
|
Mobile
ARPU (USD/Month) (A/B/number of months)
|
6.4
|
6.8
|
6.4
|
6.7
|
* 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.
_________________
1 See Note
4 of our Unaudited Interim Condensed Consolidated Financial Statements for details on our segments.
Earnings Release
Q4 2021
|
|
Latam
Segment - Home ARPU Reconciliation
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Home
service revenue ($m)
|
418
|
387
|
1,655
|
1,509
|
Home
service revenue ($m) from non Tigo customers ($m) *
|
(10)
|
(10)
|
(35)
|
(33)
|
Home
service revenue ($m) from Tigo customers (A)
|
408
|
378
|
1,620
|
1,477
|
Customer
Relationships - end of period (000) **
|
4,893
|
4,545
|
4,893
|
4,545
|
Customer
Relationships - average (000) (B) ***
|
4,875
|
4,499
|
4,757
|
4,405
|
Home
ARPU (USD/Month) (A/B/number of months)
|
27.9
|
28.0
|
28.4
|
27.9
|
* TV advertising, production services, equipment rental
revenue, call center revenue, equipment sales and other non customer driven revenue.
** Represented by homes connected all technologies
(HFC + Other Technologies + DTH & Wimax RGUs).
*** Average QoQ for the quarterly view is the average
of the last quarter.
One-off Summary - Items above EBITDA only
2021
|
Q4
2021
|
FY
2021
|
|
($
millions)
|
Revenue
|
EBITDA
|
Revenue
|
EBITDA
|
Comment
(Q4 2021)
|
Paraguay
|
—
|
—
|
(4)
|
(4)
|
|
Latam
Total
|
—
|
—
|
(4)
|
(4)
|
|
2020
|
Q4
2020
|
FY
2020
|
|
($
millions)
|
Revenue
|
EBITDA
|
Revenue
|
EBITDA
|
Comment
(Q4 2020)
|
Nicaragua
|
—
|
—
|
—
|
(8)
|
|
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)
|
|
|
Q4
21
|
Q3
21
|
QoQ
|
Q4
20
|
YoY
|
Q4
21
|
Q3
21
|
QoQ
|
Q4
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
|
3,903
|
3,817
|
(2.2)%
|
3,695
|
(5.3)%
|
3,981
|
3,835
|
(3.7)%
|
3,433
|
(13.8)%
|
Costa
Rica
|
CRC
|
637
|
625
|
(1.9)%
|
611
|
(4.1)%
|
645
|
630
|
(2.4)%
|
617
|
(4.3)%
|
Guatemala
|
GTQ
|
7.73
|
7.74
|
0.1%
|
7.80
|
0.9%
|
7.72
|
7.73
|
0.2%
|
7.79
|
1.0%
|
Honduras
|
HNL
|
24.25
|
23.98
|
(1.1)%
|
24.36
|
0.5%
|
24.43
|
24.17
|
(1.1)%
|
24.20
|
(1.0)%
|
Nicaragua
|
NIO
|
35.43
|
35.26
|
(0.5)%
|
34.72
|
(2.0)%
|
35.52
|
35.34
|
(0.5)%
|
34.82
|
(2.0)%
|
Paraguay
|
PYG
|
6,886
|
6,877
|
(0.1)%
|
6,989
|
1.5%
|
6,886
|
6,914
|
0.4%
|
6,900
|
0.2%
|
Tanzania
|
TZS
|
2,305
|
2,315
|
0.4%
|
2,319
|
0.6%
|
2,305
|
2,307
|
0.1%
|
2,319
|
0.6%
|
Earnings Release
Q4 2021
|
|
Reconciliation of Net financial obligations to EBITDA
to Proportionate net financial obligations to EBITDA as of December 31, 2021
Debt
Information - December 31, 2021
|
Financial
obligations
|
EBITDA
|
Proforma
|
$
millions
|
Gross
|
Cash
|
Net
|
|
Adjustments*
|
EBITDA
|
Leverage
|
Millicom
Group (IFRS)
|
8,911
|
930
|
7,981
|
1,639
|
747
|
2,385
|
3.34x
|
Plus:
Guatemala
|
|
|
|
747
|
|
—
|
|
Plus:
Honduras
|
340
|
39
|
301
|
259
|
|
—
|
|
Less:
Corporate Costs
|
—
|
—
|
—
|
29
|
|
—
|
|
Underlying
Millicom Group (Non-IFRS)
|
9,251
|
969
|
8,282
|
2,615
|
|
2,615
|
3.17x
|
Less:
50% Minority Stake in Colombia
|
545
|
105
|
440
|
220
|
|
|
|
Less:
33% Minority Stake in Honduras
|
113
|
13
|
100
|
86
|
|
|
|
Less:
20% Minority Stake in Panama
|
195
|
20
|
174
|
56
|
|
|
|
Less:
1.5% Minority Stake in Tanzania
|
6
|
—
|
5
|
2
|
|
|
|
Proportionate
Millicom Group (Non-IFRS)
|
8,392
|
831
|
7,562
|
2,251
|
|
2,251
|
3.36x
|
*Related to Guatemala acquisition completed on November 12, 2021.
Capex Reconciliation
Capex
Reconciliation
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Consolidated:
|
|
|
|
|
Additions
to property, plant and equipment
|
338
|
261
|
787
|
649
|
Additions
to licenses and other intangibles
|
66
|
23
|
164
|
520
|
Of
which spectrum and license costs
|
19
|
(6)
|
29
|
421
|
Total
consolidated additions
|
403
|
284
|
951
|
1,169
|
Of
which capital expenditures related to corporate offices
|
3
|
1
|
10
|
7
|
Latin
America Segment
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Additions
to property, plant and equipment
|
359
|
317
|
949
|
816
|
Additions
to licenses and other intangibles
|
76
|
36
|
212
|
629
|
Of
which spectrum and license costs
|
19
|
(6)
|
50
|
504
|
Latin
America Segment total additions (Underlying)
|
436
|
352
|
1,161
|
1,445
|
Capex
excluding spectrum and license costs
|
417
|
358
|
1,111
|
941
|
Earnings Release
Q4 2021
|
|
Africa
Segment
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Additions
to property, plant and equipment
|
16
|
13
|
41
|
41
|
Additions
to licenses and other intangibles
|
—
|
—
|
—
|
—
|
Of
which spectrum and license costs
|
—
|
—
|
—
|
—
|
Africa
Segment total additions
|
16
|
13
|
41
|
41
|
Capex
excluding spectrum and license costs
|
16
|
13
|
41
|
41
|
Underlying
Capex
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Latam
capex excluding spectrum and license cost
|
417
|
358
|
1,111
|
941
|
Africa
capex excluding spectrum and license cost
|
16
|
13
|
41
|
41
|
Capital
expenditures related to corporate offices
|
3
|
1
|
10
|
7
|
Underlying
capex excluding spectrum and license costs
|
436
|
372
|
1,162
|
989
|
Equity Free Cash Flow Reconciliation
Cash
Flow Data
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Net
cash provided by operating activities
|
439
|
296
|
956
|
821
|
Purchase
of property, plant and equipment
|
(262)
|
(182)
|
(740)
|
(622)
|
Proceeds
from sale of property, plant and equipment
|
5
|
3
|
11
|
9
|
Purchase
of intangible assets
|
(3)
|
(1)
|
(135)
|
(202)
|
Proceeds
from sale of intangible assets
|
—
|
—
|
—
|
—
|
Purchase
of spectrum and licenses
|
12
|
6
|
37
|
101
|
Finance
charges paid, net
|
115
|
135
|
491
|
551
|
Operating
free cash flow
|
306
|
257
|
619
|
657
|
Interest
(paid), net
|
(115)
|
(135)
|
(491)
|
(551)
|
Free
cash flow
|
191
|
122
|
128
|
106
|
Dividends
received from joint ventures
|
—
|
4
|
13
|
71
|
Dividends
paid to non-controlling interests
|
—
|
—
|
(6)
|
(5)
|
Equity
free cash flow
|
191
|
126
|
135
|
172
|
Lease
Principal Repayments
|
(47)
|
(33)
|
(137)
|
(116)
|
Equity
free cash flow after leases
|
144
|
93
|
(2)
|
56
|
OCF (EBITDA- Capex) Reconciliation
Latam
OCF Underlying
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Latam
EBITDA
|
617
|
634
|
2,498
|
2,360
|
(-)
Capex (Ex. Spectrum)
|
417
|
358
|
1,111
|
941
|
Latam
OCF
|
200
|
276
|
1,387
|
1,418
|
Earnings Release
Q4 2021
|
|
Africa
OCF
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Africa
EBITDA
|
25
|
34
|
111
|
125
|
(-)
Capex (Ex. Spectrum)
|
16
|
13
|
41
|
41
|
Africa
OCF
|
8
|
21
|
70
|
84
|
Corporate
OCF
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Corporate
EBITDA
|
5
|
4
|
6
|
2
|
(-)
Capex (Ex. Spectrum)
|
3
|
1
|
10
|
7
|
Corporate
OCF
|
2
|
3
|
(4)
|
(5)
|
Underlying
OCF
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Underlying
EBITDA
|
647
|
672
|
2,615
|
2,487
|
(-)
Capex (Ex. Spectrum)
|
436
|
372
|
1,162
|
989
|
Underlying
OCF
|
210
|
300
|
1,453
|
1,497
|
Interest Expense Reconciliation
Interest
($ millions)
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Interest
expense
|
(86)
|
(88)
|
(321)
|
(366)
|
Interest
expense on leases
|
(37)
|
(40)
|
(131)
|
(156)
|
Loan
Redemption expense
|
—
|
(15)
|
(5)
|
(15)
|
Other
|
(19)
|
(25)
|
(74)
|
(87)
|
Total
financial expenses
|
(142)
|
(168)
|
(531)
|
(624)
|
Interest
income
|
2
|
5
|
23
|
13
|
Net
financial expenses
|
(140)
|
(163)
|
(507)
|
(611)
|
Earnings Release
Q4 2021
|
|
Underlying
Interest ($ millions)
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Interest expense
on bonds and bank financing
|
(93)
|
(100)
|
(365)
|
(453)
|
Interest expense
on leases
|
(40)
|
(46)
|
(153)
|
(183)
|
Loan Redemption
expense
|
—
|
(15)
|
(5)
|
(33)
|
Other
|
(22)
|
(16)
|
(85)
|
(83)
|
Total financial
expenses
|
(156)
|
(177)
|
(607)
|
(752)
|
Interest income
|
3
|
6
|
25
|
22
|
Net
financial expenses
|
(153)
|
(172)
|
(583)
|
(730)
|
Amortization Expense Detail
Amortization
Expense* ($ millions)
|
Q4
2021
|
Q4
2020
|
FY
2021
|
FY
2020
|
Licenses
and Spectrum
|
(19)
|
(18)
|
(74)
|
(66)
|
Related
to acquisitions
|
(26)
|
(31)
|
(130)
|
(144)
|
Other
items
|
(34)
|
(25)
|
(115)
|
(108)
|
Total
Amortization
|
(79)
|
(74)
|
(318)
|
(318)
|
*Amortization expense related to joint ventures
was $14 million in Q4 2021 and $115 million in FY 2021, and $34 million in Q4 2020 and $134 million in FY 2020. We began consolidating
our Guatemala operations as of November 12, 2021.
Rebased Select Financial Indicators
In order to aid investors track the company's performance
in future periods, the table that follows rebases a selection of 2021 full year financial indicators to reflect the full consolidation
of Guatemala after our purchase of the minority interest on November 12, 2021, as well as the expected sale of our Tanzania business.
($
millions)
|
Service
Revenue
|
EBITDA
|
Capex
|
OCF
|
2021
Underlying
|
6,069
|
2,615
|
1,162
|
1,453
|
Honduras
and Tanzania eliminations
|
898
|
351
|
122
|
229
|
2021
rebased
|
5,171
|
2,264
|
1,040
|
1,225
|
Earnings Release
Q4 2021
|
|
Joint Venture 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. Since acquiring the remaining 45% equity interest on November 12, 2021 we fully consolidate our Guatemala business
in our consolidated financial statements.
Income
statement data Q4 2021
|
Millicom
(IFRS)
|
Guatemala
and Honduras JVs
|
Eliminations
|
Underlying
(non-IFRS)
|
($millions)
|
Revenue
|
1,347
|
341
|
—
|
1,687
|
Cost
of sales
|
(374)
|
(77)
|
—
|
(451)
|
Gross
profit
|
973
|
263
|
—
|
1,236
|
Operating
expenses
|
(483)
|
(106)
|
—
|
(590)
|
EBITDA
|
490
|
157
|
—
|
647
|
EBITDA
margin
|
36.4%
|
46.1%
|
—
|
38.3%
|
Depreciation
& amortization
|
(317)
|
(64)
|
—
|
(381)
|
Share
of net profit in joint ventures
|
25
|
—
|
(25)
|
—
|
Other
operating income (expenses), net
|
14
|
—
|
0
|
14
|
Operating
profit
|
212
|
92
|
(25)
|
280
|
Net
financial expenses
|
(140)
|
(13)
|
—
|
(153)
|
Revaluation
of previously held interests
|
670
|
—
|
—
|
670
|
Other
non-operating income (expenses), net
|
(12)
|
(4)
|
—
|
(17)
|
Gains
(losses) from associates
|
(1)
|
—
|
—
|
(1)
|
Profit
(loss) before tax
|
728
|
75
|
(25)
|
778
|
Net
tax credit (charge)
|
(105)
|
(33)
|
—
|
(138)
|
Profit
(loss) for the period
|
623
|
42
|
(25)
|
641
|
Non-controlling
interests
|
20
|
(18)
|
—
|
3
|
Profit
(loss) from discontinued operations
|
—
|
—
|
—
|
—
|
Net
profit (loss) for the period
|
643
|
25
|
(25)
|
643
|
Earnings Release
Q4 2021
|
|
Income
statement data FY 2021
|
Millicom
(IFRS)
|
Guatemala
and Honduras JVs*
|
Eliminations
|
Underlying
(non-IFRS)
|
($millions)
|
Revenue
|
4,617
|
1,955
|
—
|
6,572
|
Cost
of sales
|
(1,302)
|
(433)
|
—
|
(1,735)
|
Gross
profit
|
3,316
|
1,522
|
—
|
4,837
|
Operating
expenses
|
(1,677)
|
(545)
|
—
|
(2,222)
|
EBITDA
|
1,639
|
977
|
—
|
2,615
|
EBITDA
margin
|
35.5%
|
50.0%
|
—
|
39.8%
|
Depreciation
& amortization
|
(1,196)
|
(403)
|
—
|
(1,599)
|
Share
of net profit in joint ventures
|
210
|
—
|
(210)
|
—
|
Other
operating income (expenses), net
|
6
|
—
|
—
|
6
|
Operating
profit
|
659
|
574
|
(210)
|
1,023
|
Net
financial expenses
|
(507)
|
(76)
|
—
|
(583)
|
Revaluation
of previously held interests
|
670
|
—
|
—
|
670
|
Other
non-operating income (expenses), net
|
(50)
|
(1)
|
—
|
(51)
|
Gains
(losses) from associates
|
(39)
|
—
|
—
|
(39)
|
Profit
(loss) before tax
|
732
|
498
|
(210)
|
1,020
|
Net
tax credit (charge)
|
(189)
|
(119)
|
—
|
(308)
|
Profit
(loss) for the period
|
543
|
379
|
(210)
|
712
|
Non-controlling
interests
|
48
|
(169)
|
—
|
(121)
|
Profit
(loss) from discontinued operations
|
—
|
—
|
—
|
—
|
Net
profit (loss) for the period
|
590
|
210
|
(210)
|
590
|
* Millicom began consolidating our
Guatemala operations as of November 12, 2021.
Earnings Release
Q4 2021
|
|
Balance
Sheet data ($ millions)
|
Millicom
IFRS
|
Honduras
JV
|
Underlying
(non-IFRS)
|
Assets
|
|
|
|
Intangible
assets, net
|
7,721
|
478
|
8,199
|
Property,
plant and equipment, net
|
3,198
|
312
|
3,510
|
Right
of Use Assets
|
1,008
|
53
|
1,061
|
Investments
in joint ventures and associates
|
618
|
(596)
|
22
|
Other
non-current assets
|
307
|
(5)
|
302
|
Total
non-current assets
|
12,852
|
241
|
13,094
|
Inventories,
net
|
63
|
4
|
68
|
Trade
receivables, net
|
405
|
35
|
440
|
Other
current assets
|
719
|
11
|
730
|
Restricted
cash
|
203
|
13
|
216
|
Cash
and cash equivalents
|
895
|
39
|
934
|
Total
current assets
|
2,286
|
102
|
2,388
|
Assets
held for sale
|
—
|
—
|
—
|
Total
assets
|
15,139
|
343
|
15,482
|
|
|
|
|
Equity
and liabilities
|
|
|
|
Equity
attributable to owners of the Company
|
2,583
|
(43)
|
2,541
|
Non-controlling
interests
|
157
|
(148)
|
9
|
Total
equity
|
2,740
|
(190)
|
2,550
|
Debt
and financing
|
6,900
|
267
|
7,166
|
Other
non-current liabilities
|
1,014
|
71
|
1,085
|
Total
non-current liabilities
|
7,914
|
338
|
8,252
|
Debt
and financing
|
2,011
|
73
|
2,084
|
Other
current liabilities
|
2,474
|
123
|
2,596
|
Total
current liabilities
|
4,485
|
196
|
4,681
|
Liabilities
directly associated with assets held for sale
|
—
|
—
|
—
|
Total
liabilities
|
12,399
|
534
|
12,932
|
Total
equity and liabilities
|
15,139
|
343
|
15,482
|
Earnings Release
Q4 2021
|
|
Cash
Flow Data FY 2021
|
Millicom
IFRS
|
Guatemala
and Honduras JVs*
|
Underlying
(non-IFRS)
|
($millions)
|
Profit
(loss) before taxes from continuing operations
|
732
|
288
|
1,020
|
Profit
(loss) for the period from discontinued operations
|
—
|
—
|
—
|
Profit
(loss) before taxes
|
731
|
288
|
1,019
|
Net
cash provided by operating activities (incl. discontinued ops)
|
956
|
794
|
1,749
|
Net
cash used in investing activities (incl. discontinued ops)
|
(2,703)
|
(543)
|
(3,246)
|
Net
cash from (used by) financing activities (incl. discontinued ops)
|
1,777
|
(459)
|
1,318
|
Exchange
impact on cash and cash equivalents, net
|
(10)
|
—
|
(9)
|
Net
(decrease) increase in cash and cash equivalents
|
20
|
(208)
|
(188)
|
Cash
and cash equivalents at the beginning of the period
|
875
|
247
|
1,122
|
Effect
of cash in disposal group held for sale
|
—
|
—
|
—
|
Cash
and cash equivalents at the end of the period
|
895
|
39
|
934
|
Earnings Release
Q4 2021
|
|
Proforma Financial Information
Since 2016, Millicom group results
the Guatemala and Honduras businesses were treated as joint ventures and were consolidated using the equity method. On November 12, 2021,
Millicom purchased the minority equity interest in Guatemala, and as of this date this operation is fully consolidated. To aid investors
to better track the evolution of the company’s performance over time, we provide the following indicative unaudited financial statement
data for the Millicom group as if our Guatemala had been fully consolidated.
Income
statement data
|
Proforma
Q4 2021
|
Proforma
Q4 2020
|
|
Proforma
2021
|
Proforma
2020
|
($millions)
|
|
Revenue
|
1,540
|
1,481
|
|
5,990
|
5,661
|
Cost
of sales
|
(417)
|
(372)
|
|
(1,601)
|
(1,521)
|
Gross
profit
|
1,123
|
1,110
|
|
4,389
|
4,140
|
Operating
expenses
|
(530)
|
(502)
|
|
(2,003)
|
(1,870)
|
EBITDA
|
593
|
607
|
|
2,386
|
2,270
|
EBITDA
margin
|
38.5%
|
41.0%
|
|
39.8%
|
40.1%
|
Depreciation
& amortization
|
(353)
|
(385)
|
|
(1,476)
|
(1,531)
|
Share
of net profit in joint ventures
|
8
|
17
|
|
28
|
27
|
Other
operating income (expenses), net
|
14
|
(43)
|
|
5
|
(15)
|
Operating
profit
|
262
|
196
|
|
944
|
751
|
Net
financial expenses
|
(145)
|
(171)
|
|
(549)
|
(706)
|
Revaluation
of previously held interest
|
670
|
—
|
|
670
|
—
|
Other
non-operating income (expenses), net
|
(16)
|
40
|
|
(51)
|
(114)
|
Gains
(losses) from associates
|
(1)
|
—
|
|
(39)
|
(1)
|
Profit
(loss) before tax
|
770
|
66
|
|
975
|
(70)
|
Net
tax credit (charge)
|
(136)
|
(75)
|
|
(287)
|
(185)
|
Profit
(loss) for the period
|
634
|
(9)
|
|
688
|
(254)
|
Non-controlling
interests
|
20
|
1
|
|
48
|
42
|
Profit
(loss) from discontinued operations
|
—
|
(3)
|
|
—
|
(12)
|
Net
profit (loss) for the period
|
654
|
(12)
|
|
736
|
(225)
|
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 February 11, 2022.
Item 2
Unaudited Interim Condensed Consolidated
Financial Statements
For the three-month period and year ended
December 31, 2021
February 11, 2022
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
Unaudited interim condensed consolidated statement
of income for the three-month period and year ended December 31, 2021
in millions of U.S. dollars except per share data
|
Notes
|
Twelve months ended December 31, 2021 (i)
|
Twelve months ended December 31, 2020
|
Three months ended December 31, 2021(i)
|
Three months ended December 31, 2020
|
Continuing Operations
|
|
|
|
|
|
Revenue
|
4
|
4,617
|
4,171
|
1,347
|
1,088
|
Cost of sales
|
|
(1,302)
|
(1,171)
|
(374)
|
(284)
|
Gross profit
|
|
3,316
|
3,000
|
973
|
804
|
Operating expenses
|
|
(1,677)
|
(1,505)
|
(483)
|
(405)
|
Depreciation
|
|
(878)
|
(890)
|
(238)
|
(230)
|
Amortization
|
|
(318)
|
(318)
|
(79)
|
(74)
|
Share of profit in joint ventures (i)
|
7
|
210
|
171
|
25
|
71
|
Other operating income (expenses), net
|
14, 16
|
6
|
(12)
|
14
|
(43)
|
Operating profit
|
4
|
659
|
446
|
212
|
123
|
Interest and other financial expenses
|
10
|
(531)
|
(624)
|
(142)
|
(168)
|
Interest and other financial income
|
10
|
23
|
13
|
2
|
5
|
Revaluation of previously held interests in Guatemala
|
3
|
670
|
—
|
670
|
—
|
Other non-operating (expenses) income, net
|
5
|
(50)
|
(106)
|
(12)
|
41
|
Profit (loss) from other joint ventures and associates, net
|
3
|
(39)
|
(1)
|
(1)
|
—
|
Profit (loss) before taxes from continuing operations
|
|
732
|
(271)
|
728
|
1
|
Tax (charge) credit, net
|
|
(189)
|
(102)
|
(105)
|
(54)
|
Profit (loss) from continuing operations
|
|
543
|
(373)
|
623
|
(53)
|
Profit (loss) from discontinued operations, net of tax
|
|
—
|
(12)
|
—
|
(3)
|
Net profit (loss) for the period
|
|
542
|
(385)
|
623
|
(56)
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
Owners of the Company
|
|
590
|
(344)
|
643
|
(56)
|
Non-controlling interests
|
|
(48)
|
(41)
|
(20)
|
—
|
|
|
|
|
|
|
Earnings/(loss) per common share for net profit/ (loss) attributable to the owners of the Company:
|
|
|
|
|
|
Basic and Diluted ($ per share) (ii)
|
6
|
5.84
|
(3.40)
|
6.41
|
(0.55)
|
|
(i)
|
Tigo Guatemala is fully consolidated
since the acquisition of the remaining 45% shareholding on November 12, 2021. See note 3
for further details. As a result, numbers might not be directly comparable with 2020 figures.
|
|
(ii)
|
There are no
dilutive potential ordinary shares
|
The accompanying notes are an integral part of these
unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
Unaudited interim condensed consolidated statement
of comprehensive income for the three-month period and year ended December 31, 2021
in millions of U.S. dollars
|
Twelve months ended December 31, 2021 (i)
|
Twelve months ended December 31, 2020
|
Three months ended December 31, 2021 (i)
|
Three months ended December 31, 2020
|
Net profit (loss) for the period
|
542
|
(385)
|
623
|
(56)
|
Other comprehensive income (to be reclassified to statement of income in subsequent periods), net of tax:
|
|
|
|
|
Exchange differences on translating foreign operations
|
(52)
|
(19)
|
(15)
|
63
|
Change in value of cash flow hedges, net of tax effects
|
17
|
(1)
|
5
|
3
|
Other comprehensive income (not to be reclassified to statement of income in subsequent periods), net of tax:
|
|
|
|
|
Remeasurements of post-employment benefit obligations, net of tax effects
|
2
|
(2)
|
2
|
(2)
|
Total comprehensive income (loss) for the period
|
509
|
(407)
|
614
|
8
|
|
|
|
|
|
Attributable to
|
|
|
|
|
Owners of the Company
|
565
|
(360)
|
637
|
(4)
|
Non-controlling interests
|
(57)
|
(48)
|
(23)
|
12
|
|
|
|
|
|
Total comprehensive income for the period arises from:
|
|
|
|
|
Continuing operations
|
509
|
(395)
|
614
|
11
|
Discontinued operations
|
—
|
(12)
|
—
|
(3)
|
|
(i)
|
Tigo
Guatemala is fully consolidated since the acquisition of the remaining 45% shareholding on
November 12, 2021. See note 3 for further details. As a result, numbers might not be directly
comparable with 2020 figures.
|
The accompanying notes are an integral part of these
unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
Unaudited interim condensed consolidated statement
of financial position as at December 31, 2021
in millions of U.S. dollars
|
Notes
|
December 31, 2021(i)
|
December 31, 2020
|
ASSETS
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
Intangible assets, net
|
3, 9
|
7,721
|
3,403
|
Property, plant and equipment, net
|
8
|
3,198
|
2,755
|
Right of use assets
|
|
1,008
|
895
|
Investments in joint ventures
|
3, 7
|
596
|
2,642
|
Investments in associates
|
|
22
|
24
|
Contract costs, net
|
|
8
|
5
|
Deferred tax assets
|
|
180
|
197
|
Derivative financial instruments
|
13
|
21
|
27
|
Amounts due from non-controlling interests, associates and joint ventures
|
12
|
24
|
90
|
Other non-current assets
|
|
74
|
77
|
TOTAL NON-CURRENT ASSETS
|
|
12,852
|
10,114
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
Inventories
|
|
63
|
37
|
Trade receivables, net
|
|
405
|
351
|
Contract assets, net
|
|
69
|
31
|
Amounts due from non-controlling interests, associates and joint ventures
|
12
|
42
|
206
|
Prepayments and accrued income
|
|
168
|
149
|
Current income tax assets
|
|
104
|
96
|
Supplier advances for capital expenditure
|
|
35
|
21
|
Equity investments
|
14
|
—
|
160
|
Other current assets
|
|
302
|
181
|
Restricted cash
|
|
203
|
199
|
Cash and cash equivalents
|
|
895
|
875
|
TOTAL CURRENT ASSETS
|
|
2,286
|
2,307
|
Assets held for sale
|
|
—
|
1
|
TOTAL ASSETS
|
|
15,139
|
12,422
|
|
(i)
|
The
assets and liabilities of Tigo Guatemala are fully consolidated since the acquisition of
the remaining 45% shareholding on November 12, 2021. See note 3 for further details. As a
result, numbers might not be directly comparable with 2020 figures.
|
The accompanying notes are an integral part of these
unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
Unaudited interim condensed consolidated statement
of financial position as at December 31, 2021 (continued)
in millions of U.S. dollars
|
Notes
|
December 31, 2021(i)
|
December 31, 2020
|
EQUITY AND LIABILITIES
|
|
|
|
EQUITY
|
|
|
|
Share capital and premium
|
|
628
|
630
|
Treasury shares
|
|
(60)
|
(30)
|
Other reserves
|
|
(594)
|
(562)
|
Retained profits
|
|
2,019
|
2,365
|
Net profit (loss) for the year attributable to equity holders
|
|
590
|
(344)
|
Equity attributable to owners of the Company
|
|
2,583
|
2,059
|
Non-controlling interests
|
|
157
|
215
|
TOTAL EQUITY
|
|
2,740
|
2,274
|
|
|
|
|
LIABILITIES
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
Debt and financing
|
10
|
5,904
|
5,578
|
Lease liabilities
|
10
|
996
|
897
|
Derivative financial instruments
|
13
|
1
|
14
|
Amounts due to non-controlling interests, associates and joint ventures
|
|
—
|
29
|
Payables and accruals for capital expenditure
|
|
435
|
485
|
Provisions and other non-current liabilities
|
|
364
|
328
|
Deferred tax liabilities
|
|
214
|
209
|
TOTAL NON-CURRENT LIABILITIES
|
|
7,914
|
7,540
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
Debt and financing
|
10
|
1,840
|
113
|
Lease liabilities
|
10
|
171
|
123
|
Put option liability
|
13
|
290
|
262
|
Derivative financial instruments
|
|
—
|
1
|
Payables and accruals for capital expenditure
|
|
452
|
345
|
Other trade payables
|
|
347
|
334
|
Amounts due to non-controlling interests, associates and joint ventures
|
12
|
74
|
311
|
Accrued interest and other expenses
|
|
539
|
445
|
Current income tax liabilities
|
|
128
|
71
|
Contract liabilities
|
|
97
|
90
|
Provisions and other current liabilities
|
|
546
|
511
|
TOTAL CURRENT LIABILITIES
|
|
4,485
|
2,608
|
TOTAL LIABILITIES
|
|
12,399
|
10,148
|
TOTAL EQUITY AND LIABILITIES
|
|
15,139
|
12,422
|
|
(i)
|
The
assets and liabilities of Tigo Guatemala are fully consolidated since the acquisition of
the remaining 45% shareholding on November 12, 2021. See note 3 for further details. As a
result, numbers might not be directly comparable with 2020 figures.
|
The accompanying notes are an integral part of these
unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
Unaudited interim condensed consolidated statement
of cash flows for the year ended December 31, 2021
in millions of U.S. dollars
|
Notes
|
December 31, 2021(i)
|
December 31, 2020
|
Cash flows from operating activities (including discontinued operations)
|
|
|
|
Profit (loss) before taxes from continuing operations
|
|
732
|
(271)
|
Profit (loss) before taxes from discontinued operations
|
4
|
—
|
(12)
|
Profit (loss) before taxes
|
|
731
|
(283)
|
Adjustments to reconcile to net cash:
|
|
|
|
Interest expense on leases
|
|
131
|
156
|
Interest expense on debt and other financing
|
|
400
|
468
|
Interest and other financial income
|
|
(23)
|
(13)
|
Adjustments for non-cash items:
|
|
|
|
Depreciation and amortization
|
4
|
1,196
|
1,208
|
Share of net profit in joint ventures
|
|
(210)
|
(171)
|
(Gain) on disposal and impairment of assets, net
|
|
(6)
|
20
|
Share-based compensation
|
|
17
|
24
|
Loss from other joint ventures and associates, net
|
12
|
39
|
1
|
Revaluation of previously held interest in Guatemala
|
3
|
(670)
|
—
|
Other non-cash non-operating (income) expenses, net
|
5
|
50
|
106
|
Changes in working capital:
|
|
|
|
Decrease (increase) in trade receivables, prepayments and other current assets, net
|
|
(93)
|
(43)
|
Decrease (increase) in inventories
|
|
9
|
(6)
|
Increase (decrease) in trade and other payables, net
|
|
6
|
40
|
Increase (decrease) in contract assets, liabilities and costs, net
|
|
(5)
|
8
|
Total changes in working capital
|
|
(81)
|
(2)
|
Interest paid on leases
|
|
(140)
|
(151)
|
Interest paid on debt and other financing
|
|
(355)
|
(411)
|
Interest received
|
|
4
|
11
|
Taxes paid
|
|
(127)
|
(142)
|
Net cash provided by operating activities
|
|
956
|
821
|
Cash flows from (used in) investing activities (including discontinued operations):
|
|
|
|
Acquisition of subsidiaries, joint ventures and associates, net of cash acquired
|
3
|
(2,000)
|
10
|
Financing exit from the Ghana joint venture
|
3
|
(37)
|
—
|
Proceeds from disposal of subsidiaries and associates, net of cash disposed
|
|
30
|
10
|
Purchase of intangible assets and licenses
|
9
|
(135)
|
(202)
|
Purchase of property, plant and equipment
|
8
|
(740)
|
(622)
|
Proceeds from sale of property, plant and equipment
|
8
|
11
|
9
|
Proceeds from disposal of equity investments, net of costs
|
14
|
163
|
197
|
Dividends and dividend advances received from joint ventures
|
7
|
13
|
71
|
Transfer to pledge deposits
|
|
(33)
|
—
|
Cash (used in) provided by other investing activities, net
|
|
26
|
32
|
Net cash used in investing activities
|
|
(2,703)
|
(495)
|
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
Unaudited interim condensed consolidated statement of cash flows for the year ended December 31, 2021 (continued)
|
|
|
|
|
Cash flows from financing activities (including discontinued operations):
|
|
|
|
Proceeds from debt and other financing
|
10
|
3,113
|
1,470
|
Repayment of debt and other financing
|
10
|
(1,142)
|
(1,744)
|
Loan repayment from (advanced to) joint venture
|
12
|
—
|
(193)
|
Lease capital repayment
|
|
(137)
|
(116)
|
Advances and dividends paid to non-controlling interests
|
|
(6)
|
(5)
|
Share repurchase program
|
|
(50)
|
(10)
|
Net cash provided by (used in) financing activities
|
|
1,777
|
(598)
|
Exchange impact on cash and cash equivalents, net
|
|
(10)
|
(17)
|
Net (decrease) increase in cash and cash equivalents
|
|
20
|
(289)
|
Cash and cash equivalents at the beginning of the year
|
|
875
|
1,164
|
Cash and cash equivalents at the end of the year
|
|
895
|
875
|
|
(i)
|
The
cash flows of Tigo Guatemala are fully consolidated since the acquisition of the remaining
45% shareholding on November 12, 2021. See note 3 for further details. As a result, numbers
might not be directly comparable with 2020 figures.
|
The accompanying notes are an integral part of these
unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
Unaudited interim condensed consolidated statements
of changes in equity for the years ended December 31, 2021 and December 31, 2020
in millions of U.S. dollars
|
Number of shares (000’s)
|
Number of shares held by the Group (000’s)
|
Share capital(iv)
|
Share premium
|
Treasury shares
|
Retained profits (i)
|
Other reserves
|
Total
|
Non- controlling interests
|
Total equity
|
Balance on January 1, 2020
|
101,739
|
(581)
|
153
|
480
|
(51)
|
2,372
|
(544)
|
2,409
|
271
|
2,680
|
Total comprehensive income for the year
|
—
|
—
|
—
|
—
|
—
|
(344)
|
(15)
|
(360)
|
(48)
|
(407)
|
Dividends to non controlling interest
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(8)
|
(8)
|
Purchase of treasury shares(ii)
|
—
|
(467)
|
—
|
—
|
(19)
|
3
|
—
|
(16)
|
—
|
(16)
|
Share based compensation
|
—
|
—
|
—
|
—
|
—
|
—
|
24
|
24
|
—
|
24
|
Issuance of shares under share-based payment schemes
|
—
|
521
|
—
|
(2)
|
40
|
(11)
|
(26)
|
1
|
—
|
1
|
Balance on December 31, 2020
|
101,739
|
(526)
|
153
|
478
|
(30)
|
2,020
|
(562)
|
2,059
|
215
|
2,274
|
Total comprehensive income for the year
|
—
|
—
|
—
|
—
|
—
|
590
|
(25)
|
565
|
(57)
|
509
|
Dividends to non controlling interests
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(3)
|
(3)
|
Purchase of treasury shares(ii)
|
—
|
(1,471)
|
—
|
—
|
(56)
|
2
|
—
|
(54)
|
—
|
(54)
|
Share based compensation
|
—
|
|
—
|
—
|
—
|
—
|
18
|
18
|
1
|
19
|
Issuance of shares under share-based payment schemes
|
—
|
459
|
—
|
(2)
|
26
|
2
|
(25)
|
1
|
—
|
1
|
Change in scope of consolidation(iii)
|
—
|
—
|
—
|
—
|
—
|
(5)
|
—
|
(5)
|
—
|
(5)
|
Balance on December 31, 2021
|
101,739
|
(1,538)
|
153
|
476
|
(60)
|
2,609
|
(594)
|
2,583
|
157
|
2,740
|
|
(i)
|
Retained profits – includes
profit for the year attributable to equity holders, of which at December 31, 2021, $486 million
(2020: $310 million) are not distributable to equity holders.
|
|
(ii)
|
During the year ended December
31, 2021, Millicom repurchased 1,369,284 shares (2020: 350,000 shares) for a total amount
of $50 million (2020: $10 million) and withheld approximately 102,000 shares (2020: 117,000
shares) for settlement of tax obligations on behalf of employees under share-based compensation
plans.
|
|
(iii)
|
Cloud 2 Nube S.A. was a subsidiary
owned by the Group at 55% and already fully consolidated as Millicom had control over it.
As a result, in accordance with IFRS 10, the acquisition of the remaining 45% in Cloud 2
Nube S.A has been treated as an equity transaction and non-controlling interests amounting
to less than $1 million were transferred to the Group's equity against a purchase consideration
of $5 million.
|
|
(iv)
|
On December 13, 2021, Millicom's
Board of Directors proposed to increase the authorized share capital of the Company to $300
million divided into 200,000,000 shares with a par value of $1.50 each, through an extraordinary
general meeting ("EGM"). The EGM is finally scheduled to take place on 28 February
2022.
|
The accompanying notes are an integral part of these
unaudited interim condensed consolidated financial statements
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
Notes to the unaudited interim
condensed consolidated statements
1. GENERAL
Millicom International Cellular S.A. (the “Company”
or “MIC SA”), a Luxembourg Société Anonyme, and its subsidiaries, joint ventures and associates (the “Group”
or “Millicom”) is a provider of cable and mobile services dedicated to emerging markets in Latin America and Africa. Millicom
provides high speed broadband and innovation around The Digital Lifestyle® services through its principal brand, TIGO.
On November 12, 2021, Millicom announced that it has
closed the acquisition of the remaining 45% equity interest in its business in Guatemala (collectively, "Tigo Guatemala"). As
a result, Millicom owns 100% equity interest in Tigo Guatemala and fully consolidates it since that date (see note 3). As a result, the
statements of income, cash flows and financial position in these unaudited interim condensed consolidated financial statements might not
be directly comparable with 2020 figures.
On February 10, 2022, the Board of Directors authorized
these unaudited interim condensed consolidated financial statements for issuance.
2. SUMMARY OF ACCOUNTING POLICIES
These interim condensed consolidated financial statements
of the Group are unaudited. They are presented in US dollars ($) 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 year 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.
|
II.
|
COVID-19 - Qualitative and quantitative assessment
on business activities, financial situation and economic performance
|
Impact on Millicom's markets
and business
During the year ended December 31, 2021,
economic activity continued to recover 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 year-on-year. Meanwhile,
vaccination rates improved to above 50% in Colombia, Costa Rica, El Salvador and Panama, but remained below 30% in Guatemala. During the
quarter, the number of new COVID cases was stable, and there were few restrictions on mobility.
As of December 31, 2021, and for the year ended December
31, 2021, management did not identify any significant adverse accounting effects as a result of the pandemic.
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
2. SUMMARY OF ACCOUNTING POLICIES
(Continued)
|
III.
|
New and amended IFRS standards
|
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:
|
•
|
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.
|
|
•
|
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reform - Phase 2 - effective for annual periods
starting on January 1, 2021. The amendments provide temporary reliefs which address the financial reporting effects when an interbank
offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate.
|
Main reliefs provided by the Phase
2 amendments relate to:
|
•
|
Changes to contractual cash flows: That is, when changing the basis for determining contractual cash flows for financial assets and
liabilities required by the reform 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;
|
|
•
|
Hedge accounting: That is, allowing hedge relationships that are directly affected by the reform to continue, though additional ineffectiveness
might need to be recorded.
|
The following changes to standards not yet effective
are not expected to materially affect the Group:
|
•
|
Amendments effective for annual periods starting on January 1, 2022:
|
|
◦
|
IFRS 3 'Business Combinations' - Reference to Conceptual Framework.
|
|
◦
|
IAS 16 'Property, Plant and Equipment' - Proceeds before intended use.
|
|
◦
|
IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' - Cost of fulfilling a contract.
|
|
◦
|
Annual improvements to IFRS Standards 2018-2020, affecting IFRS 1, IFRS 9, IFRS 16 and IAS 41.
|
|
•
|
Amendments effective for annual periods starting on January 1, 2023:
|
|
◦
|
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 (not yet endorsed by the
EU).
|
|
◦
|
IFRS 17, ‘Insurance contracts’.
|
|
◦
|
Amendments to IFRS 17, ‘Insurance contracts’ (not yet endorsed by the EU).
|
|
◦
|
IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors' - Definition of accounting estimates (not yet endorsed by
the EU).
|
The following changes to standards are effective for
annual periods starting on January 1, 2023 (not yet endorsed by the EU) and their potential impact on the Group consolidated financial
statements is currently being assessed by Management:
|
◦
|
Amendments to IAS 12, 'Income Taxes: Deferred tax related to Assets and liabilities arising from a Single Transaction' - These amendments
clarify that the initial recognition exception does not apply to the initial recognition of leases and decommissioning obligations. These
amendments apply prospectively to transactions that occur on or after the beginning of the earliest comparative period presented. In addition,
an entity should apply the amendments for the first time by recognising deferred tax for all temporary differences related to leases and
decommissioning obligations at the beginning of the earliest comparative period presented.
|
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
3. ACQUISITION AND DISPOSAL OF SUBSIDIARIES, JOINT
VENTURES, ASSOCIATES AND OTHER NON-CONTROLLING INTERESTS
Acquisitions 2021
On November 12, 2021, Millicom announced that it has
closed the previously-announced agreement to acquire the remaining 45% equity interest in its joint venture business in Guatemala (collectively,
"Tigo Guatemala") from its local partner for $2.2 billion in cash. The acquisition has been financed through a bridge facility
(see note 10).
Millicom has provisionally determined the fair values
of Tigo Guatemala's identifiable assets and liabilities, and in particular its tangible assets, intangible and right of use assets as
well as its lease liabilities. Finalization of the fair value is expected to occur before Q3 2022.
At acquisition date - November 12, 2021
|
Provisional fair values (100%) ($ millions)
|
Intangible assets (excluding goodwill)
|
1,294
|
Property, plant and equipment
|
547
|
Right of use assets
|
189
|
Other non-current assets
|
5
|
Current assets (excluding cash)
|
245
|
Trade receivables
|
42
|
Cash and cash equivalents
|
199
|
Total assets acquired
|
2,521
|
Lease liabilities
|
205
|
Other debt and financing
|
417
|
Other liabilities
|
280
|
Total liabilities assumed
|
901
|
Fair value of assets acquired and liabilities assumed, net - A
|
1,620
|
Purchase consideration (45%) - B
|
2,195
|
Implied fair value (100% of business) - C
|
4,877
|
Carrying value of our investment in joint venture at acquisition date - D
|
2,013
|
Goodwill arising on change of control - B+D-A=E
|
2,588
|
Revaluation of previously held interests - C-B-D=F (i)
|
670
|
Total provisional goodwill - E+F=G
|
3,258
|
|
(i)
|
The acquisition has been determined
as a business combination achieved in stages, requiring Millicom to remeasure its 55% previously
held equity investment in Tigo Guatemala at its acquisition date fair value; the resulting
gain has been recognized in the statement of income under the line "Revaluation of previously
held interests" and is included in the goodwill calculation (see above).
|
The goodwill is attributable to the workforce and the
high profitability of Tigo Guatemala. It is currently not expected to be tax deductible. From November 12, 2021 to December 31, 2021,
Tigo Guatemala contributed $223 million of revenue and a net profit of $28 million to the Group. If Tigo Guatemala had been acquired on
January 1, 2021 incremental revenue for the year 2021 would have been $1.38 billion and incremental net profit for the same period of
$147 million. Acquisition related costs included in the statement of income under operating expenses were immaterial.
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
3. ACQUISITION AND DISPOSAL
OF SUBSIDIARIES, JOINT VENTURES, ASSOCIATES AND OTHER NON-CONTROLLING INTERESTS (Continued)
Disposals 2021 - Ghana
On October 13, 2021, Millicom, along with its joint
venture partner Bharti Airtel Limited, closed the disposal of AirtelTigo Ghana to the Government of Ghana. As part of the closing conditions,
each partner committed and paid $37.5 million for the reimbursement of certain local bank facilities which has been provided for during
Q3 in the statement of income under the line "Profit (loss) from other joint ventures and associates, net".
Acquisitions - Disposals 2020
There were no material acquisitions or disposals during
the year ended December 31, 2020.
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
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 Guatemala and Honduras as if they were fully consolidated by the Group, over both
years presented, as this reflects the way management reviews and uses internally reported information to make decisions about operating
matters and to provide increased transparency to investors on those operations. See also note 3 for information regarding the acquisition
of the remaining 45% equity interest in our Guatemala business on November 12, 2021. This acquisition has no impact on the way we present
our Latin America segment because it included our Guatemala business as if it was already fully consolidated. Finally, even prior to its
formal disposal in October 2021, our Africa segment did not include our joint venture in Ghana because our management did not consider
it a strategic part of our Group (See also note 3).
Revenue, operating profit (loss), EBITDA and other segment
information for the years and the three-month periods ended December 31, 2021 and 2020, are as follows:
Twelve months ended December 31, 2021
(in millions of U.S. dollars)
|
Latin America
|
Africa
|
Unallocated
|
Guatemala and Honduras(vii)(viii)
|
Eliminations and
Transfers
|
Total
|
Mobile revenue
|
3,372
|
347
|
—
|
(1,372)
|
—
|
2,347
|
Cable and other fixed services revenue
|
2,275
|
9
|
—
|
(334)
|
(2)
|
1,947
|
Other revenue
|
70
|
—
|
—
|
(8)
|
(2)
|
60
|
Service revenue (i)
|
5,716
|
357
|
—
|
(1,715)
|
(4)
|
4,354
|
Telephone and equipment and other revenue (i)
|
503
|
—
|
—
|
(240)
|
—
|
263
|
Revenue
|
6,220
|
357
|
—
|
(1,955)
|
(4)
|
4,617
|
Operating profit (loss)
|
1,001
|
29
|
(7)
|
(574)
|
210
|
659
|
Add back:
|
|
|
|
|
|
|
Depreciation and amortization
|
1,504
|
83
|
12
|
(403)
|
—
|
1,196
|
Share of profit in joint ventures(viii)
|
—
|
—
|
—
|
—
|
(210)
|
(210)
|
Other operating income (expenses), net
|
(8)
|
(1)
|
2
|
—
|
—
|
(6)
|
EBITDA (ii)
|
2,498
|
111
|
6
|
(977)
|
—
|
1,639
|
EBITDA from discontinued operations
|
—
|
—
|
—
|
—
|
—
|
—
|
EBITDA incl discontinued operations
|
2,498
|
111
|
6
|
(977)
|
—
|
1,639
|
Capital expenditure (iii)
|
(1,015)
|
(42)
|
(7)
|
238
|
—
|
(827)
|
Changes in working capital and others (iv)
|
(200)
|
33
|
116
|
(13)
|
—
|
(65)
|
Taxes paid
|
(241)
|
(20)
|
(9)
|
143
|
—
|
(128)
|
Operating free cash flow (v)
|
1,041
|
81
|
106
|
(609)
|
—
|
619
|
Total Assets (vi)
|
14,400
|
870
|
6,401
|
(6,430)
|
(103)
|
15,139
|
Total Liabilities
|
8,333
|
937
|
5,081
|
(1,761)
|
(191)
|
12,399
|
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
4. SEGMENT INFORMATION (Continued)
Twelve months ended December 31, 2020
(in millions of U.S. dollars)
|
Latin America
|
Africa
|
Unallocated
|
Guatemala and Honduras (vii)
|
Eliminations and transfers
|
Total
|
Mobile revenue
|
3,220
|
357
|
—
|
(1,461)
|
—
|
2,116
|
Cable and other fixed services revenue
|
2,097
|
8
|
—
|
(302)
|
(1)
|
1,803
|
Other revenue
|
60
|
1
|
—
|
(6)
|
(2)
|
52
|
Service revenue (i)
|
5,377
|
366
|
—
|
(1,769)
|
(4)
|
3,971
|
Telephone and equipment revenue (i)
|
466
|
—
|
—
|
(266)
|
—
|
201
|
Revenue
|
5,843
|
366
|
—
|
(2,035)
|
(4)
|
4,171
|
Operating profit (loss)
|
803
|
36
|
(32)
|
(536)
|
175
|
446
|
Add back:
|
|
|
|
|
|
|
Depreciation and amortization
|
1,561
|
89
|
11
|
(453)
|
—
|
1,208
|
Share of profit in joint ventures
|
—
|
—
|
—
|
—
|
(171)
|
(171)
|
Other operating income (expenses), net
|
(5)
|
—
|
23
|
(3)
|
(4)
|
12
|
EBITDA (ii)
|
2,360
|
125
|
2
|
(992)
|
—
|
1,495
|
EBITDA from discontinued operations
|
—
|
(4)
|
—
|
—
|
—
|
(4)
|
EBITDA incl discontinued operations
|
2,360
|
121
|
2
|
(992)
|
—
|
1,491
|
Capital expenditure (iii)
|
(926)
|
(42)
|
(4)
|
258
|
—
|
(714)
|
Changes in working capital and others (iv)
|
61
|
11
|
(7)
|
(43)
|
—
|
22
|
Taxes paid
|
(260)
|
(10)
|
(2)
|
131
|
—
|
(142)
|
Operating free cash flow (v)
|
1,234
|
80
|
(11)
|
(645)
|
—
|
657
|
Total Assets (vi)
|
13,418
|
926
|
4,052
|
(5,116)
|
(859)
|
12,422
|
Total Liabilities
|
8,878
|
959
|
3,342
|
(2,044)
|
(987)
|
10,148
|
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
4. SEGMENT INFORMATION (Continued)
Three months ended December 31, 2021 (in millions of U.S. dollars)
|
Latin America
|
Africa
|
Unallocated
|
Guatemala and Honduras (vii)(viii)
|
Eliminations and transfers
|
Total
|
Mobile revenue
|
863
|
90
|
—
|
(236)
|
—
|
716
|
Cable and other fixed services revenue
|
578
|
2
|
—
|
(64)
|
(1)
|
515
|
Other revenue
|
17
|
—
|
—
|
(2)
|
—
|
16
|
Service revenue (i)
|
1,458
|
92
|
—
|
(302)
|
(2)
|
1,247
|
Telephone and equipment revenue (i)
|
139
|
—
|
—
|
(39)
|
—
|
100
|
Revenue
|
1,597
|
92
|
—
|
(341)
|
(2)
|
1,347
|
Operating profit (loss)
|
262
|
5
|
12
|
(92)
|
25
|
212
|
Add back:
|
|
|
|
|
|
|
Depreciation and amortization
|
359
|
20
|
3
|
(64)
|
—
|
317
|
Share of profit in joint ventures(viii)
|
—
|
—
|
—
|
—
|
(25)
|
(25)
|
Other operating income (expenses), net
|
(3)
|
—
|
(10)
|
—
|
—
|
(14)
|
EBITDA (ii)
|
617
|
25
|
5
|
(157)
|
—
|
490
|
EBITDA from discontinued operations
|
—
|
—
|
—
|
—
|
—
|
—
|
EBITDA incl discontinued operations
|
617
|
25
|
5
|
(157)
|
—
|
490
|
Capital expenditure (iii)
|
(279)
|
(13)
|
2
|
42
|
—
|
(248)
|
Changes in working capital and others (iv)
|
(36)
|
20
|
120
|
8
|
—
|
112
|
Taxes paid
|
(64)
|
(5)
|
(4)
|
24
|
—
|
(48)
|
Operating free cash flow (v)
|
239
|
27
|
122
|
(82)
|
—
|
306
|
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
4. SEGMENT INFORMATION (Continued)
Three months ended December 31, 2020
(in millions of U.S. dollars)
|
Latin America
|
Africa
|
Unallocated
|
Guatemala and Honduras (vii)
|
Eliminations and transfers
|
Total
|
Mobile revenue
|
837
|
95
|
—
|
(384)
|
—
|
548
|
Cable and other fixed services revenue
|
539
|
2
|
—
|
(80)
|
—
|
461
|
Other revenue
|
17
|
—
|
—
|
(1)
|
(1)
|
15
|
Service revenue (i)
|
1,394
|
97
|
—
|
(465)
|
(1)
|
1,024
|
Telephone and equipment revenue (i)
|
140
|
—
|
—
|
(76)
|
—
|
64
|
Revenue
|
1,534
|
97
|
—
|
(541)
|
(1)
|
1,088
|
Operating profit (loss)
|
238
|
13
|
(44)
|
(159)
|
75
|
123
|
Add back:
|
|
|
|
|
|
|
Depreciation and amortization
|
392
|
22
|
3
|
(113)
|
—
|
304
|
Share of profit in joint ventures
|
—
|
—
|
—
|
—
|
(71)
|
(71)
|
Other operating income (expenses), net
|
5
|
(1)
|
44
|
(1)
|
(5)
|
43
|
EBITDA (ii)
|
634
|
34
|
4
|
(273)
|
—
|
399
|
EBITDA from discontinued operations
|
—
|
(3)
|
—
|
—
|
—
|
(3)
|
EBITDA incl discontinued operations
|
634
|
31
|
4
|
(273)
|
—
|
396
|
Capital expenditure (iii)
|
(234)
|
(10)
|
3
|
68
|
—
|
(174)
|
Changes in working capital and others (iv)
|
47
|
9
|
17
|
(4)
|
—
|
68
|
Taxes paid
|
(65)
|
(2)
|
(1)
|
34
|
—
|
(34)
|
Operating free cash flow (v)
|
382
|
28
|
23
|
(176)
|
—
|
257
|
|
(i)
|
Service revenue is Group revenue
related to the provision of ongoing services such as monthly subscription fees, airtime and
data usage fees, interconnection fees, roaming fees, mobile finance service commissions,
installation fees and fees from other telecommunications services such as data services,
SMS and other value-added services excluding telephone and equipment sales. Revenues from
other sources comprises rental, sub-lease rental income and other non-recurring revenues.
The Group derives revenue from the transfer of goods and services over time and at a point
in time. Refer to the table below.
|
|
(ii)
|
EBITDA is operating profit excluding
impairment losses, depreciation and amortization and gains/losses on the disposal of fixed
assets. EBITDA is used by the management to monitor the segmental performance and for capital
management.
|
(iii) Excluding
spectrum and licenses of $37 million (2020: $101 million).
|
(iv)
|
‘Changes in working capital
and others’ include changes in working capital as stated in the cash flow statement
as well as share based payments expense.
|
|
(v)
|
Operating Free Cash Flow is EBITDA
less cash capex (excluding spectrum and license costs) less change in working capital, other
non-cash items (share-based payment expense) and taxes paid.
|
(vi) Segment
assets include goodwill and other intangible assets.
|
(vii)
|
Including eliminations for Guatemala
(prior to acquisition) and Honduras as reported in the Latin America segment.
|
|
(viii)
|
Tigo Guatemala is fully consolidated
since the acquisition of the remaining 45% shareholding on November 12, 2021. See note 3
for further details. As a result, from the acquisition date on November 12, 2021, Guatemala's
statement of income and cash flow figures are no longer removed to reconcile to the total
consolidated balances.
|
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
4. SEGMENT INFORMATION (Continued)
Revenue from contracts with customers from continuing
operations
|
|
Twelve months ended December 31, 2021
|
Twelve months ended December 31, 2020
|
Three months ended December 31, 2021
|
Three months ended December 31, 2020
|
in millions of U.S. dollars
|
Timing of revenue recognition
|
Latin America
|
Africa
|
Total Group
|
Latin America
|
Africa
|
Total Group
|
Latin America
|
Africa
|
Total Group
|
Latin America
|
Africa
|
Total Group
|
Mobile
|
Over time
|
1,963
|
233
|
2,196
|
1,728
|
239
|
1,967
|
617
|
64
|
681
|
445
|
62
|
507
|
Mobile Financial Services
|
Point in time
|
37
|
114
|
150
|
31
|
118
|
149
|
10
|
26
|
36
|
9
|
33
|
41
|
Cable and other fixed services
|
Over time
|
1,938
|
9
|
1,947
|
1,794
|
8
|
1,803
|
513
|
2
|
516
|
458
|
2
|
460
|
Other
|
Over time
|
60
|
—
|
60
|
51
|
1
|
52
|
16
|
—
|
16
|
15
|
—
|
16
|
Service Revenue
|
|
3,998
|
357
|
4,354
|
3,604
|
366
|
3,971
|
1,155
|
92
|
1,248
|
927
|
97
|
1,024
|
Telephone and equipment
|
Point in time
|
264
|
—
|
264
|
201
|
—
|
201
|
100
|
—
|
100
|
64
|
—
|
64
|
Revenue from contracts with customers
|
|
4,261
|
357
|
4,618
|
3,805
|
366
|
4,171
|
1,255
|
92
|
1,347
|
991
|
97
|
1,088
|
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
|
Twelve months ended December 31, 2021
|
Twelve months ended December 31, 2020
|
Three months ended December 31, 2021
|
Three months ended December 31, 2020
|
Change in fair value of derivatives (Note 13)
|
3
|
(11)
|
1
|
(6)
|
Change in fair value in investment in Jumia (Note 14)
|
—
|
(18)
|
—
|
—
|
Change in fair value in investment in Helios Towers (Note 14)
|
18
|
(16)
|
—
|
5
|
Change in value of call option and put option liability (Note 13)
|
(31)
|
5
|
(5)
|
(3)
|
Exchange gains (losses), net
|
(43)
|
(69)
|
(9)
|
44
|
Other non-operating income (expenses), net
|
3
|
3
|
1
|
1
|
Total
|
(50)
|
(106)
|
(12)
|
41
|
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
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
|
Twelve months ended December 31, 2021
|
Twelve months ended December 31, 2020
|
Three months ended December 31, 2021
|
Three months ended December 31, 2020
|
Basic and Diluted
|
|
|
|
|
Net profit (loss) attributable to equity holders from continuing operations
|
591
|
(332)
|
643
|
(52)
|
Net profit (loss) attributable to equity holders from discontinued operations
|
—
|
(12)
|
—
|
(3)
|
Net profit/(loss) attributable to all equity holders to determine the basic profit (loss) per share
|
590
|
(344)
|
643
|
(56)
|
|
|
|
|
|
in thousands
|
|
|
|
|
Weighted average number of ordinary shares for basic and diluted earnings per share
|
101,129
|
101,172
|
100,302
|
101,201
|
|
|
|
|
|
in U.S. dollars
|
|
|
|
|
Basic and diluted
|
|
|
|
|
EPS from continuing operations attributable to owners of the Company
|
5.84
|
(3.28)
|
6.41
|
(0.52)
|
EPS from discontinued operations attributable to owners of the Company
|
—
|
(0.12)
|
—
|
(0.03)
|
EPS for the period attributable to owners of the Company
|
5.84
|
(3.40)
|
6.41
|
(0.55)
|
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
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.
At December 31, 2021, the carrying value of the Group's
investment in AirtelTigo Ghana joint venture is zero and is therefore not shown in the table below (see note 3 for further details on
the disposal of our stake in the AirtelTigo joint venture in Ghana).
At December 31, 2021, the equity accounted net assets
of our joint venture in Honduras totaled $406 million (December 31, 2020: Honduras: $422 million; Guatemala: $2,649 million). These net
assets do not necessarily represent statutory reserves available for distribution as these include consolidation adjustments (such as
goodwill and identified assets and assumed liabilities recognized as part of the purchase accounting). Out of these reserves, $3 million
(December 31, 2020: $153 million) represent statutory reserves that are unavailable to be distributed to the Group. During the year ended
December 31, 2021, Millicom's joint venture in Honduras did not pay any dividend or dividend advances to the Company while Guatemala paid
$13 million during the period from January 1, 2021 until November 12, 2021 (December 31, 2020: Honduras: $25 million; Guatemala: $46 million).
in millions of U.S. dollars
|
2021
|
Guatemala(i)
|
Honduras (i)
|
Opening Balance at January 1, 2021
|
2,031
|
610
|
Capital increase
|
—
|
—
|
Results for the period
|
183
|
27
|
Dividends declared during the period
|
(201)
|
(34)
|
Currency exchange differences
|
—
|
(7)
|
Change in consolidation scope
|
(2,013)
|
|
Closing Balance at December 31, 2021
|
—
|
596
|
(i) Share of profit is recognized under ‘Share
of profit in the joint ventures’ in the statement of income for the year ended December 31, 2021 for Honduras and for the period
from January 1, 2021 until November 12, 2021 for Guatemala (see note 3).
8. PROPERTY, PLANT AND EQUIPMENT
During the year ended December 31, 2021, Millicom added
property, plant and equipment for $787 million (December 31, 2020: $649 million) and received $11 million from disposal of property, plant
and equipment (December 31, 2020: $9 million).
9. INTANGIBLE ASSETS
During the year ended December 31, 2021, Millicom added
intangible assets for $164 million of which $29 million related to spectrum and licenses, and $135 million to additions of other intangible
assets (December 31, 2020: $520 million out of which $421 million related to spectrum and licenses and $99 million to additions of intangible
assets) and did not receive any proceeds from disposal of intangible assets (December 31, 2020: nil).
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
10. FINANCIAL OBLIGATIONS
A. Debt and financing
The most significant movements in debt and financing
for the year ended December 31, 2021 were as follows:
Luxembourg
On November 10, 2021, Millicom executed a Bridge Loan
Agreement of $2.15 billion with a consortium of banks. The proceeds were used for the acquisition of Tigo Guatemala's remaining 45% shareholding
(see note 3). The Bridge Loan bears a variable interest rate with a step up every three months, and has 6 month maturity, extendable for
an additional 6 months. The costs of issuance are being amortized based on the six-month expected timing of refinancing of this Bridge
Loan. On December 29, 2021, Millicom partially repaid $500 million of this Bridge loan, partially with Millicom's own cash and partially
with proceeds from the $100 million bilateral loan with DNB bank, executed on December 20, 2021, with a variable interest rate and a 5-year
maturity.
On September 22, 2021, Millicom announced the early
participation exchange results from its offer dated September 8, 2021; $302.1 million of the 6.625% Notes due 2026 were exchanged for
newly issued $307.5 million of the 4.5% Notes due 2031 (at 101.812% exchange ratio). The gain of $15 million, derived from applying the
"modification accounting" under IFRS 9 to this exchange, has been recorded under "Interest and other financial income"
in the statement of income during the year ended December 31, 2021. Transaction costs attributable to this exchange amount to approximately
$4 million and are being amortized over the life of the Notes.
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 followed 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 year ended December 31, 2021.
Colombia
On December 14, 2021, UNE EPM Telecomunicaciones S.A.
entered into an ESG Linked credit agreement with Bancolombia for a COP 450,000 million (approximately $111 million at the December 31,
2021 exchange rate) loan with a variable rate at IBR+ margin and a maturity of 7 years.
On February 16, 2021, UNE EPM Telecomunicaciones S.A.
issued under the approved local bond program, a COP 485,680 million bond (approximately $123 million at the December 31, 2021 exchange
rate) with 3 maturities; Series 7 years at 5.56% fixed rate, Series 10 years at CPI plus 2.61% and Series 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
On August 31, 2021, Cable Onda executed an agreement
with Bank of Nova Scotia for $75 million with a 5 year maturity . The facility was used to repay Cable Onda's remaining $75 million under
the 5.75% local bond, which was initially due on September 3, 2025.
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
10. FINANCIAL OBLIGATIONS
(Continued)
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. The agreement was amended and restated
in February 2021 and has a maturity of 5 years. The proceeds were used to partially repay the local 5.75% bond originally due on 2025.
El Salvador
On December 26, 2021, Telemovil El Salvador S.A. executed
a new credit agreement for $100 million with a 5 year maturity, which bears a variable interest to refinance the $100 million loan agreement
dated March 23, 2018 with DNB and Nordea, which was entirely repaid on December 29, 2021. The credit agreement is guaranteed by Millicom.
On July 1, 2021, Telemovil El Salvador S.A. repaid the
remaining outstanding balance of $18 million of principal under a credit facility dated June 3, 2016 entered into with Citibank, as lender,
and the Company as guarantor.
Paraguay
On October 1, 2021, Telecel issued a PYG 400,000 million
bond (approximately $58 million at the December 31, 2021 exchange rate) in three series with fixed interest rates between 6% to 7.5% and
a repayment period from 5 to 10 years.
Costa Rica
On October 25, 2021, Millicom Cable Costa Rica S.A.
repaid a $120 million syndicated loan which was initially due on 2023 with the proceeds of a new syndicated loan entered into by the Company
and Millicom Cable Costa Rica as co-borrower for an amount of $125 million due on 2026. The latter has 2 tranches, a USD $33 million tranche
with a variable interest rate and a local currency tranche also with variable interest rate for an amount of CRC 58,224 million equivalent
to $91 million with the exchange rate as at 22 October 2021 . Cross currency swaps used to hedge the interest and principal on the previous
loan were terminated on the same date (see note 13).
Bolivia
In October 2021, Tigo Bolivia signed
additional credit facilities for a total amount of approximately $26 million with a repayment period between 2.5 and 5 years and fixed
interest rate of 5.5% per annum.
Guatemala
On December 8, 2021, Tigo Guatemala entered into the
following loan agreements:
|
•
|
a GTQ 950 million loan with Banco Industrial (approximately $120 million as at December 31, 2021) which bears a fixed interest of
6.2% per annum and matures in October 2025.
|
|
•
|
two loans for a total of GTQ 500 million with Banco G&T Continental S.A. (approximately $65 million as at December 31, 2021) which
bear a fixed interest rate of 6% per annum and mature in December 2026.
|
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
10. FINANCIAL OBLIGATIONS
(Continued)
Analysis of debt and financing by maturity
The total amount of debt and financing is repayable
as follows:
in millions of U.S. dollars
|
As at December 31, 2021
|
As at December 31, 2020
|
Due within:
|
|
|
One year
|
1,840
|
113
|
One-two years
|
206
|
107
|
Two-three years
|
486
|
439
|
Three-four years
|
843
|
811
|
Four-five years
|
758
|
467
|
After five years
|
3,610
|
3,755
|
Total debt and financing
|
7,744
|
5,691
|
The table below describes the outstanding and maximum
exposure under guarantees and the remaining terms of the guarantees as at December 31, 2021 and December 31, 2020.
|
Bank and financing guarantees (i)
|
Supplier guarantees
|
in millions of U.S. dollars
|
As at December 31, 2021
|
As at December 31, 2020
|
As at December 31, 2021
|
As at December 31, 2020
|
Terms
|
Outstanding and Maximum exposure
|
Outstanding and Maximum exposure
|
0-1 year
|
71
|
59
|
82
|
—
|
1-3 years
|
6
|
227
|
—
|
—
|
3-5 years
|
223
|
—
|
—
|
—
|
More than 5 years
|
—
|
—
|
—
|
—
|
Total
|
300
|
287
|
82
|
—
|
(i) If non-payment by the obligor, the guarantee
ensures payment of outstanding amounts by the Group's guarantor.
The Group’s interest and other financial expenses
comprised the following:
in millions of U.S. dollars
|
Twelve months ended December 31, 2021
|
Twelve months ended December 31, 2020
|
Three months ended December 31, 2021
|
Three months ended December 31, 2020
|
Interest expense on bonds and bank financing
|
(345)
|
(386)
|
(97)
|
(98)
|
Interest expense on leases
|
(131)
|
(156)
|
(37)
|
(40)
|
Early redemption charges
|
(5)
|
(15)
|
—
|
(15)
|
Others
|
(50)
|
(67)
|
(7)
|
(15)
|
Total interest and other financial expenses
|
(531)
|
(624)
|
(142)
|
(168)
|
11. COMMITMENTS AND CONTINGENCIES
Litigation & claims
The Company and its operations are contingently liable
with respect to lawsuits, legal, regulatory, commercial and other legal risks that arise in the normal course of business. As of December
31, 2021, the total amount of claims brought against Millicom and its subsidiaries is $246 million (December 31, 2020: $288 million).
The Group's share of the comparable exposure for joint ventures is $13 million (December 31, 2020: $14 million).
As at December 31, 2021, $36 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 $1 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 December 31, 2021, the tax risks exposure of the
Group's subsidiaries is estimated at $343 million, for which provisions of $69 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 $68 million
(December 31, 2020: $69 million) and $3 million (December 31, 2020: $7 million), respectively. During 2021, due to tax audit closure in
Tanzania, the Group has released tax risk contingencies amounting to $26 million which were considered as 'possible' and has also recorded
under the line tax charge in the statement of income, the reversal of a $30 million provision for claims no longer deemed as 'probable'.
Capital commitments
At December 31, 2021, the Company and its subsidiaries
had fixed commitments to purchase network equipment, other fixed assets and intangible assets of $753 million of which $420 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 $41 million and $41 million. (December 31, 2020: $69 million and $52 million).
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
12. RELATED PARTY
The following transactions were conducted with related
parties:
in millions of U.S. dollars
|
Twelve months ended December 31, 2021
|
Twelve months ended December 31, 2020
|
Three months ended December 31, 2021
|
Three months ended December 31, 2020
|
Expenses
|
|
|
|
|
Purchases of goods and services from Miffin (i)
|
(165)
|
(216)
|
(14)
|
(60)
|
Purchases of goods and services from EPM
|
(39)
|
(37)
|
(10)
|
(9)
|
Other expenses
|
(18)
|
(57)
|
(2)
|
(48)
|
Total
|
(221)
|
(310)
|
(27)
|
(117)
|
|
(i)
|
Miffin entities
are not considered as related parties since November 12, 2021 (see note 3).
|
in millions of U.S. dollars
|
Twelve months ended December 31, 2021
|
Twelve months ended December 31, 2020
|
Three months ended December 31, 2021
|
Three months ended December 31, 2020
|
Income / gains
|
|
|
|
|
Sale of goods and services to Miffin (i)
|
299
|
327
|
31
|
90
|
Sale of goods and services to EPM
|
14
|
15
|
3
|
4
|
Other income / gains
|
2
|
2
|
1
|
—
|
Total
|
314
|
343
|
34
|
94
|
|
(i)
|
Miffin entities
are not considered as related parties since November 12, 2021 (see note 3).
|
The Group had the following balances with related parties:
in millions of U.S. dollars
|
As at December 31, 2021
|
As at December 31, 2020
|
Liabilities
|
|
|
Payables to Guatemala joint venture(i)
|
—
|
231
|
Payables to Honduras joint venture (ii)
|
69
|
103
|
Payables to EPM
|
15
|
20
|
Payables to Panama non-controlling interests
|
1
|
1
|
Other accounts payable
|
2
|
1
|
Total
|
87
|
356
|
|
(i)
|
Since November
12, 2021, Tigo Guatemala is accounted for as a subsidiary and intercompany transactions are
eliminated on consolidation (see note 3).
|
|
(ii)
|
Mainly advances
for dividends expected to be declared in 2022.
|
in millions of U.S. dollars
|
As at December 31, 2021
|
As at December 31, 2020
|
Assets
|
|
|
Receivables from Guatemala joint venture (i)
|
—
|
206
|
Receivables from Honduras joint venture (ii)
|
62
|
84
|
Receivables from EPM
|
2
|
3
|
Receivables from Panama non-controlling interests
|
1
|
1
|
Other accounts receivable
|
5
|
5
|
Total
|
70
|
299
|
|
(i)
|
In 2021 and
prior to the acquisition of the remaining 45% shareholding, Guatemala repaid the entire $193
million loan advanced to joint venture granted in October 2020 and originally repayable by
January 13, 2022, at the latest.
|
|
(ii)
|
In November
2020, our operations in Honduras completed a shareholding restructuring whereby Telefónica
Celular S.A. acquired the shares of Navega S.A. de C.V. from its existing shareholders. The
sale consideration will be payable in several installments with a final settlement in November
2023. As of December 31, 2021, $24 million out
of a total receivable of $53 million is due after more than one year and therefore disclosed
in non-current assets. During 2021, our operations in Honduras repaid $30
million to Millicom.
|
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
13. FINANCIAL INSTRUMENTS
Other than the items disclosed below, the fair values
of financial assets and financial liabilities approximate their carrying values as at December 31, 2021 and December 31, 2020:
in millions of U.S. dollars
|
Carrying value
|
Fair value
|
|
As at December 31, 2021
|
As at December 31, 2020
|
As at December 31, 2021
|
As at December 31, 2020
|
Financial liabilities
|
|
|
|
|
Debt and financing
|
7,744
|
5,691
|
7,815
|
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 $221 million with the exchange rate as at
December 31, 2021) senior unsecured sustainability bond issued in May 2019. These swaps are accounted for as cash flow hedges as the timing
and amounts of the cash flows under the swap agreements match the cash flows under the SEK bond. Their maturity date is May 2024. The
hedging relationship is highly effective and related fluctuations are recorded through other comprehensive income. At December 31, 2021,
the fair values of the swaps amount to an asset of $6 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 December
31, 2021, the fair value of El Salvador amount to a liability of $1 million (December 31, 2020: a liability of $3 million) and the fair
value of Colombia swaps amount to an asset of $15 million (December 31, 2020: a liability of $7 million). Costa Rica swaps have been settled
as a result of the redemption of the USD facility (see note 10) resulting in a loss of $1.6 million recorded under "Other non-operating
(expenses) income, net" (December 31, 2020: liability of $5 million and an asset of $1 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 December 31, 2021, the put option liability is
valued at $290 million (December 31, 2020: $262 million) (being the higher of the value of the 'Transaction Price' put option and fair
market value - for further details refer to the Group's 2020 consolidated financial statements). Changes in the value of the put option
liability are recorded in the Group's statement of income under 'other non-operating (expenses) income, net' (see note 5).
The call option, having a strike price at initial Transaction
price +10% interest p.a (exercisable from June 14, 2022 to July 14, 2022), has been valued at $0.3 million (December 31, 2020: $3 million).
There are no other derivative financial instruments
with a significant fair value at December 31, 2021.
Unaudited Interim Condensed Consolidated Financial Statements for the three- month period and year ended December 31, 2021
|
|
14. EQUITY INVESTMENTS
As at December 31, 2020, Millicom held an investment
in equity instruments of Helios Towers ("HT") amounting to $160 million. The investment was measured at fair value through profit
and loss under IFRS 9 and changes were shown under 'Other non-operating (expenses) income, net' (see note 5).
In June 2021, Millicom disposed of its remaining 76
million shares it owned in HT for a total net consideration of GBP 115 million ($163 million using the exchange rate of the transaction
date, June 2, 2021), triggering a net loss on disposal of $15 million, recorded under ‘other operating income (expenses), net’.
In total, starting June 2020, Millicom sold 162 million shares it held in HT, yielding total proceeds of GBP 244 million ($383 million
using the exchange rate of each transaction date). Following these disposals, Millicom has no remaining ownership in HT.
In the course of June 2020, Millicom disposed of its
entire stake in Jumia (approximately 6%) for a total net consideration of $29 million, triggering a net gain on disposal of $15 million
recorded in the statement of income for the year ended December 31, 2020 under ‘other operating income (expenses), net’.
15. MILLICOM’S OPERATIONS IN TANZANIA
Tanzania divestiture
On April 19, 2021,
Millicom agreed to sell its entire 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. The Group is still awaiting the necessary regulatory approvals in order
to complete the disposal.
IPO –
Tanzania
The Tanzanian
government implemented in 2016 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 reached an agreement with the Tanzanian government that such public
offering must take place before 31 December 2025 at the latest.
16. SUBSEQUENT EVENTS
Financing
On January 27, 2022, our principal
subsidiary in Guatemala, Comcel, completed the issuance of a new 10-year $900 million Bond
with a coupon of 5.125%. Proceeds from this bond as well as cash were used to repay a significant portion of the bridge financing that
was used to fund the acquisition of the remaining 45% equity interest in our Tigo Guatemala operations. As of February
8, 2022, a balance of $450 million remained unpaid under the initial $2.15 billion bridge loan agreement.
On January 13, 2022, we completed
the issuance of a new 5-year sustainability bond raising SEK 2.25 billion (approximately
$252 million) at a fully swapped rate of SOFR plus 3.496%. Proceeds will be used to fund investments in accordance with the Company's
sustainability framework. This bond has been fully hedged against foreign exchange fluctuations.
In January 2022, Colombia Movil S.A. repaid a $100 million
syndicated loan, which was initially due in 2024. Cross currency swaps used to hedge the previous interest and principal on the previous
loan for USD50 million were terminated. An outstanding amount of $50 million is fully swapped.
Zantel's earn out
In January 2022, Millicom received $11 million from
Etisalat as earn-out income related to the purchase of Zantel in 2015. This settlement was considered as an adjusting event and recorded
in 'other operating income' 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.
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MILLICOM INTERNATIONAL
CELLULAR S.A.
(Registrant)
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By:
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/s/ Salvador Escalon
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Name:
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Salvador Escalon
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Title:
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Executive Vice President, General Counsel
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Date: February 11,
2022
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