Millicom CEO Mauricio Ramos, has admitted the company would be forced to take a prudent approach in 2021 as a second wave of Covid-19 takes hold, with the effects of the health crisis evident in its latest quarterly results.
In a Q4 earnings statement, Ramos said 2020 was “one of the most challenging years” in the company’s history. While it was encouraged by recent trends, a second wave of Covid-19 in Latin America meant unemployment remained very high, government finances were stretched and it remained “unclear when the worst economic impact of this health crisis will pass”.
To that end, the company said it would take a similar approach in 2021 to 2020, prioritising capex to accelerate organic growth and net debt reduction, while deciding not to pay a cash dividend, although it may resume share repurchases in the second half.
It is also targeting a minimum operating cash flow of $1.4 billion, to give it the flexibility to adjust its plans throughout the year.
Millicom reported a 5.3 per cent revenue decline year-on-year to $1 billion, due to the impact of the pandemic and weaker currencies in Colombia, Paraguay and Costa Rica.
It also slipped to a net loss of $56 million from a profit of $223 million, due to increases in net financial and tax expenses, higher spectrum costs and foreign exchange losses.
In mobile, Millicom said the reopening of some economies had a significant impact on its prepaid mobile business, however the pace of recovery in post-paid had been much slower.
It recorded 2.3 million mobile net additions to reach 41.7 million customers, following solid growth across most markets, particularly Colombia.
Underlying gross debt fell $768 million during the quarter to $6.4 billion at end-2020.