Liberty Latin America Ltd. (“Liberty Latin America” or “LLA”) (NASDAQ: LILA and LILAK, OTC Link: LILAB) today announced its financial and operating results for the three months (“Q2”) and six months (“YTD” or “H1 2023”) ended June 30, 2023.
CEO Balan Nair commented, “Following a solid start to the year, we continued our momentum in the second quarter with sequential financial and operational growth and are well positioned to achieve our 2023 financial guidance.”
“Internet subscriber growth was led by C&W Caribbean and Panama, each generating more than 50% higher net additions year-over-year, as we continued to invest in Giga-Ready networks and create differentiated converged propositions. Postpaid mobile adds were driven by Costa Rica, where our business is the leading operator by overall market share, as well as continued growth in C&W Caribbean supported by the return of tourism in the region. Across fixed and mobile services, selective strategic price increases in several markets have landed well and will help underpin performance in the second half.”
“The group reported $1.1 billion in revenue, $140 million of operating income, and $445 million in Adjusted OIBDA in the second quarter. Operating income grew by $492 million, while a decline in reported Adjusted OIBDA was driven by the deconsolidation of VTR. Adjusted OIBDA was 4% higher on a rebased basis, year-over-year, as we continued to focus on efficiency and benefited from our structural operating leverage.”
“Capital allocation remains a key focus for us. Following the renewal of our buyback authorization earlier in the year, we accelerated activity in the second quarter, repurchasing $57 million of our equity and $74 million of convertible notes, close to three times our aggregate first quarter activity.”
“Looking ahead to the second half of the year, we remain confident that we will achieve our 2023 financial guidance targets supported by continued subscriber additions and organic financial momentum, synergies from integration activities, particularly in Panama, and our focus on operating cost and capex discipline.”
Q2 Business Highlights
-
C&W Caribbean: continued organic subscriber additions and financial growth
- 23,000 internet and mobile postpaid organic adds
- Reported and rebased Adj. OIBDA growth of 9% and 8%, respectively
-
C&W Panama: synergies from prior year Claro Panamá acquisition drive strong growth
- Reported and rebased revenue growth of 28% and 4%, respectively
- Reported and rebased Adj. OIBDA growth of 33% and 42%, respectively
-
Liberty Networks: solid performance
- Reported and rebased revenue growth of 2% and 5%, respectively
- Rebranded as “Liberty Networks”, focus on investing in infrastructure and enterprise solutions to meet our customers' digital and connectivity needs
-
Liberty Puerto Rico: sequential mobile service revenue stable; Adj. OIBDA growth
- RGU adds drive fixed revenue growth YoY, postpaid mobile subscribers stable
- Migration to new mobile platform progressing
-
Liberty Costa Rica: postpaid operational momentum and strong Adj. OIBDA growth
- Prepaid to postpaid migration efforts drive postpaid adds
- Adj. OIBDA up 41% and 10% on a reported and rebased basis, respectively
FY 2023 LLA Financial Guidance - Reconfirmed
- Adjusted OIBDA mid-to-high single digit rebased growth
- P&E additions as a percentage of revenue at ~16%
- Adjusted FCF of ~$300 million, before distributions to noncontrolling interests
Financial and Operating Highlights
Financial Highlights | Q2 2023 | Q2 2022 |
YoY Growth /
|
YoY Rebased
| H1 2023 | H1 2022 |
YoY Growth /
|
YoY Rebased
| ||||||||||||||||||||
(USD in millions) | ||||||||||||||||||||||||||||
Revenue | $ | 1,123 | $ | 1,216 | (8 | %) | — | % | $ | 2,227 | $ | 2,432 | (8 | %) | 1 | % | ||||||||||||
Revenue (excluding VTR)2 | $ | 1,123 | $ | 1,066 | 5 | % | — | % | $ | 2,227 | $ | 2,112 | 5 | % | 1 | % | ||||||||||||
Operating income (loss) | $ | 140 | $ | (353 | ) | N.M. | $ | 253 | $ | (168 | ) | N.M. | ||||||||||||||||
Adjusted OIBDA3 | $ | 445 | $ | 461 | (3 | %) | 4 | % | $ | 852 | $ | 897 | (5 | %) | 4 | % | ||||||||||||
Adjusted OIBDA3 (excluding VTR)2 | $ | 445 | $ | 423 | 5 | % | 4 | % | $ | 852 | $ | 813 | 5 | % | 4 | % | ||||||||||||
Property & equipment additions | $ | 192 | $ | 192 | — | % | $ | 337 | $ | 367 | (8 | %) | ||||||||||||||||
As a percentage of revenue | 17 | % | 16 | % | 15 | % | 15 | % | ||||||||||||||||||||
Adjusted FCF before distributions to noncontrolling interest owners | $ | 72 | $ | 75 | $ | 22 | $ | 19 | ||||||||||||||||||||
Distributions to noncontrolling interest owners | $ | (41 | ) | $ | (2 | ) | $ | (41 | ) | $ | (2 | ) | ||||||||||||||||
Adjusted FCF4 | $ | 31 | $ | 73 | $ | (19 | ) | $ | 17 | |||||||||||||||||||
Cash provided by operating activities | $ | 226 | $ | 225 | $ | 288 | $ | 347 | ||||||||||||||||||||
Cash used by investing activities | $ | (159 | ) | $ | (154 | ) | $ | (291 | ) | $ | (343 | ) | ||||||||||||||||
Cash provided (used) by financing activities | $ | (97 | ) | $ | 109 | $ | (133 | ) | $ | 31 | ||||||||||||||||||
N.M. – Not Meaningful.
Operating Highlights5 | Q2 2023 | Q1 2023 | ||||||||
Total customers | 1,917,000 | 1,937,100 | ||||||||
Organic customer additions (losses) | (8,900 | ) | 23,900 | |||||||
Fixed RGUs | 3,874,200 | 3,853,500 | ||||||||
Organic RGU additions | 34,900 | 56,300 | ||||||||
Organic internet additions | 18,700 | 29,400 | ||||||||
Mobile subscribers | 8,011,500 | 8,027,700 | ||||||||
Organic mobile losses | (8,000 | ) | (16,000 | ) | ||||||
Organic postpaid additions | 32,800 | 35,200 | ||||||||
Revenue Highlights
The following table presents (i) revenue of each of our segments and corporate operations for the periods indicated and (ii) the percentage change from period-to-period on both a reported and rebased basis:
Three months ended | Increase/(decrease) | Six months ended | Increase/(decrease) | ||||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||||||
2023 | 2022 | % | Rebased % | 2023 | 2022 | % | Rebased % | ||||||||||||||||||||
in millions, except % amounts | |||||||||||||||||||||||||||
C&W Caribbean | $ | 356.3 | $ | 355.6 | — | — | $ | 710.1 | $ | 710.4 | — | — | |||||||||||||||
C&W Panama | 180.8 | 141.6 | 28 | 4 | 346.1 | 268.8 | 29 | 4 | |||||||||||||||||||
Liberty Networks | 118.6 | 116.4 | 2 | 5 | 227.3 | ||||||||||||||||||||||
