Millicom Reports 5% Rise in Q2 Revenues

Millicom International has reported a five percent rise in Q2 revenues to US$814 million compared to a year ago but a drop of 13% in net profits of $114 million, down from the US$132 million a year ago. In Q2 09, Millicom added 1.7 million net new mobile subscribers, reaching 30.8 million total mobile subscribers, an increase of 25% versus Q2 08 as Millicom continues its focus on attracting the more loyal and higher revenue generating customers.

Mikael Grahne, CEO of Millicom, commented: "Our Q2 09 results continue to show the benefits of the actions taken in the last few quarters to focus on both margins and cash flow generation, whilst maintaining or improving our market position. Our EBITDA margin moved up to 45.6%, which is above our long term target margin for the Group, as we tighten cost controls and adapt our product offering to changing market conditions. Cash flow continues to improve, with operating free cash flow standing at 15% of revenues in Q2 09. We are also pleased to have grown our market share by 0.7 percentage points over the quarter.

In Central America, Honduras grew its subscriber base by 19% year on year, despite the entry of a third operator at the end of Q4 08. Guatemala grew its subscriber base by 18% year-on-year and El Salvador by 17%.

In South America, total subscribers increased by 17% year-on-year with Bolivia showing growth of 51%. In Colombia, the increase in subscribers was 5%, and in Paraguay it was 15%.

In Africa, the best performing markets in terms of net subscriber additions were Chad which grew by 93% year-on-year, adding 110 thousand net new subscribers in Q2 09, and Tanzania, which grew by 81% year- on-year, adding 413 thousand net new subscribers in Q2 09. In Senegal, total subscribers increased by 26% and 144 thousand net new subscribers were added in Q2 09, which is indicative of the continuing trust that subscribers are placing in the Tigo brand.

The topic of the planned sale of the company's Asian assets, Grahne added, "The disposal of our Asian assets is in progress and expressions of interest have been received from a number of parties for the three assets. We expect the disposal to be completed by Q1 2010."

Capex is expected to be approximately $750 million in 2009 (excluding capex relating to Asia of approximately $100m). The EBITDA margin is expected to be maintained at the current level for the full year. Millicom expects operating free cash flow to be in the mid teens as a percentage of revenues for the 2009 year.