Q4 2020 Millicom International Cellular SA Earnings Call
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Good day and welcome to the Milliken fourth quarter 2020 earnings conference call all participants will be in a listen-only mode after today's presentation. There would be an opportunity to ask questions. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero, please note this event is being recorded. I woke up. I'd like to turn the conference over to Michelle Morris VP of investor relations, please go ahead.
Thanks for the good morning everyone and Welcome to our fourth quarter 2020 results conference call as usual. We will be referring to some slides which are available on our website. So please turn off like two for our Safe Harbor disclosure. We will be making forward-looking statements on today's calls and these involve risks and uncertainties, which could have a material impact on our results. We will also be referring to many non-ifrs metrics throughout the presentation and we Define these ones like three and you can find reconciliacion tables at the back of our earnings release wage as well as on our website. So what those legal disclaimers are other way, let me turn the call over to our CEO now we sold on this issue.
Thank you. So good morning and good afternoon everyone. I hope that you and your loved ones are all staying safe and in good health on are you sure you want to reboot 2021 Dodge Challenger year and what we also so very many of our own people very best in the worst of times and that inspired us to work harder and be much better here to age twenty twenty four March thirtieth anniversary as a company you celebrated with continued investment and hard work position the company for Recovery in twenty-twenty and twenty years into the future now, please thank you so much for a summary of the main messages today first. We have very very strong adoption key for a month and a customer base extension on both mobile home.
Continue to invest for the long-term in the second half of the year and we already seen some of the payback for that to the fact that much better than we were expecting and made additional material progress in reducing. Our that if we continue to believe is the best news. Listen to each of these Five Points beginning on July 6th, beginning of the prices. One of the main goals one said was to protect life like a little with flying colors every country and also in the context of the heart and stroke in our country's off mobile a record users. And if for one point nine million users for the for the passenger off
You said your smartphone users? We have some performance in all markets and Columbia have a very strong quarter the record made out of more than 870,000 college. Now, you know that users in America and Thursdays from customer grouping cable. We added 277,000 cable and estimates for the year including hundred thousand customers in a very strong fourth-quarter month. So you can see what we're back to an annual rate of Just Around 400,000 which is not installed or very resilient in the middle of the month. It seemed very strong demand for residential customers. So the end of the year before point five million Club
Including a big lesson four million rhoc networks now, please turn to slide 7 to look at our financials.
Do you want to give you a ton of detail in a few minutes?
A second point I'm making is simply that the financial because in the forequarter need to be essentially flat on a mirror image recovery and improvement from the last payment of the year a little bit better than the previous one since I meant and has continue to strongly into January which is very promising for a year. It's as far as a result of the lesson level of the restrictions and most of the Market's bouncing received my decision to save the market place you on the condemning using our Workforce or needing the street a lot of money being active to keep selling and providing high-quality service rep also told about investment in the networks that you can see in slightly as you know to protect them.
Then some strategic investors and when they're out looking for the future and to 4 we need more and more tax in total and ended up screaming about a billion dollars on topics for the school year for a very proud to 60% ourselves as usual the biggest slash one black Cable business including both c p and expansion pack of the four hundred thousand new homes and his loss and rightly so completely more and more of our system. As I said earlier. We are at 277000 megabytes in the midst of the women have to 31% after 30% a year and the model home invest very smart move that we had a 2500 and I'm ready to be 400 sites include about half of these Outlet in Columbia where we live picture them.
Seven hundred Nevada send you off. Our network is now widely and externally recognized most of our markets as a result of this decision to confirm take a look at $1,000 with you on our q1. I'll just probably response plan started to show that the minimum wage is protecting. Our customer base has a reputation with the teams on the jobs to excel in providing service within the limits and restrictions easy enough on the outlets including dead.
the brakes on the opposite reaction
The topics you would be the details on the effect and operating cash flow or smart and plus the topics management approach. But the key message here is that we reach 1.5 bath and put in management approach throughout the years.
I hear this is also communicated our decision to focus at the most. So we have to adjust early on the year when you take stock now that the past year will keep all of the keyboards that we set out on the back to you be protected our market share and some countries increased it actually group and various functions. So our customer base table in the context of a continue to invest and modernize our networks too close to 700 megahertz comb terms and limits used me to reduce my bill. And as I said to the TV box and then you could give me prices the two lasting measure of a performance.
Success will be not just our financial and Commercial Success and Ladder and much more importantly to our customers and communities would be there for them during troubled times. So we focus rather than ever before from all of our stakeholders in between the 24. Our investors is an evening with strong and almost recordnet.com investment reviews from customers in our communities operations run 24/7 month here for them to interact with us on the social distancing increased significantly in the second half and I can't promise not to disconnect customers in financial hardship and services.
Please note that we have over 750000 on the last one service. The number of the families have some point or another team member information or services and the launch the new program called. My teachers are how to use technology in the classroom each one hundred and thirty-seven thousand teachers May repeat that 137,000 features of the starting number that would be on teaching a difference in our comments about 21,000 employees and to protect the income that are commissioned.
You did this without any government money. You paid additional.
Yes in a customer's car here in terms of customer in there and simply respect on that program we launched and what when you come off the previous recognize the work of a phone unlockers. I have come again here today for an amazing job like that and our customers are welcome. Actually, very significantly during the condemning to create a great place to work or recognize you ranked number fourteen among the Top Dog International to get for you and make up this past year about a year which we do an exhibition was about significant progress in building a stronger more sustainable business for the future and these translated into some solid course this year off.
She can see once like above average average wage workers and other companies are more developed countries economies. I'm sorry. I just make sure that the teachers relations with the government of Iraq to this verse topic related subsidies to over half a million families last year and even work with the government and lead us this year in a very similar program, which is a great example our services Drive financial information in the evening. We also we Financial foundation for all of these remains are strong governance payment.
You know that you still have no to do to improve our performance or recording and we're totally committed to continue to do because we do all of these things that your sense of purpose as you can see. I'm just like everyone of our 25,000 employees now more than ever during this challenging times, and I'm proud to say that everyone in this home and please let me turn it over to
Thank you. So I'm going to take a quick look at how to vote for us. And then how we performed in Q4 and the resulting full-year performance. I'll also take a quick look at the balance sheet position turning to slide fifteen. And this is just our usual Bridge from the reported address numbers to the underlying numbers for the latter and service Revenue anybody a this better reflects the way we manage the group. So these are the metrics we're talking about so that'd be go to slide sixteen and the next two slides and here's the story of twenty-twenty on our lot on business and you should see that very significant impact of COVID-19 in Q2. This was largely driven by a big reduction in pre-paid revenues caused by severe Mobility restrictions and compounded by collection issue in the subscription business.
Cuz we on our customers adapted to this reality. We saw an improvement in Q3 and that has continued.
You into Q4 and in fact you for service revenues are about back to where they were in q1, which is a great achievement. Now remember to 4 is typically our best quarter of the year. So we're not quite back to pre covers levels off yet. But you know kind of the macro environment has not worsened. There are Pockets like Panama which continues to see a weak economy. And these are things will keep a very close eye on having said that the actions taken and mean that we saw a very meaningful pickup in PGA to the point where we were up on last year organically now, I should point out the worst one bad debt Provisions. They did Barry a lot from them to quote of this year and accentuated the decline in Q2 and helped us in the second half as our collections improved but still the solid Improvement in collections have flowed through to EBT 8 and flow through Thursday cash flow and consequently our investment decisions, which are on slide 17.
Totally sure even a slight is hard decision making evolved on Catholics and how that flowed through to cash flow on the left hand side is are Catholics and we reacted quickly to Thursday instead of COVID-19. And then q1 we told you we were planning to reduce our capex by two to three hundred million dollars. However, we do not take static decisions and we're constantly looking at the market and the opportunities. I just think of the environment as we see it and as we saw the resilience of our business, we at least the further hundred million dollars of additional capex in Q3 and then an extra one hundred million in a month or so. In fact, we ended 2020 with a Catholic spend of just under a billion dollars for the full year, which is only around $100 lower than our original plan and you can see why on the wrong side of this Slide the build-up of cash flow through the air to remind you we'd focus on maintaining that operating cash flow one point four billion dollars unless we saw the operating resilience translate dead.
We were able to allocate more to Investments while still maintaining delivery of that operating cash flow. In fact, we ended up one point five billion dollars and that allowed us to reduce our debt litigious, which I think is a very significant achievement given the difficult operating environments in 2020.
So let me look at ask you for the full-year operating performance for that. I'm starting on slide eighteen and here you can see a service Revenue drivers for both Q4 and the four-year dead. Now for the quarter. We're almost flat year-on-year against what was a good fourth quarter in 2019. And not only is this a very solid result but it allows it allows it to close the year. Only 2.5% which is significantly better than we had imagined back in April. Clearly. The story has been recovery of the mobile business. You can see that in fact, we were basically flat year-on-year compared to being down 4.3% for the year as a whole and in particular the prepaid business has come back very strongly and growth has been positive in each of the last three months of the year.
Who business?
That's continue to deliver positive Revenue growth as it has every quarter of 2020. We close the year up 3.8% slightly better than 3.3% from the 40s and mementos.
Record that we took a number of steps this year to support our customers that did impact our Revenue growth in home. But we expect these actions to drive further growth in the future and we're starting to see a real acceleration. I think final points on this slide is B2B continues to be more challenged but even here performance has been better than the numbers might suggest your recall 2019. We had a very strong 24 because of a large selection contract in Columbia, which did not repeat in 2020.
I have a drill down further on flight 19 to service Revenue by country. The first thing to say is that every country performed better in Q4 than they did in Q3 and the standout performance name is Salvador, which deliver the 9% year-on-year growth was a little flattered by one off but take nothing away from a very very good performance Guatemala. Once again delivered superb performance up 6.6% again driven by the mobile business particularly prepaid just goes from strength to strength. But also this was one of the best-performing home businesses we had in 2028, you know, that's wild looking at power light and Honduras continue to recover improving sequentially again on mobile and in Columbia. For the one-off. I've just mentioned performance would have been possible. I finally Panama is probably the one market where the macro has been worse than expected. But you know that's having a negative impact on B2B and that said the consumer business held up. Yep.
Very well as much as said and we remain very pleased with the progress. We're making an integrating the businesses there. Okay, let me turn to leave it down to like twenty.
Lily the improved performance in Mobile has filtered through to either J. As I mentioned earlier we did however book considerably lower bad depth charges in the quarter reflecting in the continued improvement in our connections. And if we translate that into a full year impact in the lower part of the slide, we were down 3.7% organically and also bad debt in Q4 was lower for the year as a whole week this as an extra twenty two million dollars of that that challenge so, you know despite that our margins have remained remarkably strong ending the edges basis points down at 40.4%
I'm looking at places like the improved performance filtered down to even in most countries Guatemala was almost 50% of organic life support performance. El Salvador produced almost Global AG growth.
Again, you know a little bit of a one-off but really a strong underlying performance and then generally we saw a solid improved performance across the board Bolivia rebounded am flattered a little bit by lower bad debt charges Columbia whilst down considerably in dollar terms. Most of this was FX related organically were down to 2.8% And if it hadn't check that one off we would have been in positive territory removing slide twenty-two as you've heard you achieve just under 1.5 billion dollars of OCS head of our Target gift like gives you a sense of how we got there and despite the reduction in service revenue of over 1.5 150 million dollars. We were able to compensate that through a cost-saving reduction which exceeded $100 and to a lesser extent the lower capex.
Spanish flu
Bluetooth that reduction which you can see on slide twenty-three strong underlying Equity free cash flow added to equity investment disposals this drove $541 reduction in net and that's despite high levels of spectrum purchases than we've seen in recent Years also want to bring to your attention that are Partners shell the funding in Guatemala is treated as a table for accounting purposes, and this is flagged as the 157 million payable on this slide. So with that are proportionate leverage, and that's excluding lease has ended the month. We point zero seven times. That's a reduction on last quarter if we had leases to that were at 3.2 times again also a reduction on that quarter, and as you can see we have been very much focused on achieving our language targets and on reducing our debt and we plan to maintain that approaching twenty Twenty-One. And so that end today we've announced that we attend to deploy 180 million dollars of Arthur's.
Balance is to reduce more of our US dollar debt. So with that let me pass back to him right here.
Thank you Tim. Before we take your questions. Let me recap the key messages first. Our customer base is growing very rapidly and ads are very strong and at almost record length in Q4 and for the full year and we achieve this in the midst of the pandemic second our business continued to recover in Q4 third. We never stopped investing and I'm seeing some tangible benefits from this continued investment Focus well into January of this year for three folded a prudent and flexible approach to managing the business and twenty twenty and we were able to offer and even grow our cash flow and space we made a lot of progress towards reducing on that debt. All of which were are key targets for the year as the pandemic hit going forward. We will continue to execute it on organic growth strategy because it's working very very well many of you will recognize the six boxes in the middle of this page, but it is worth repeating perhaps in a different way that our
Strategies first and foremost network-centric because we believe in the mental in the power of this digital highways that are building our future throughout Latin America.
Second it is convergent driven p.m. To provide both fixed and mobile services in our markets and increasingly seamless way to our customers and we believe this will give us differentiation going for June 3rd for growing increasingly customer. Focus MPS is now our main internal kpi used for management incentive compensation because we know that we create shareholder value wage increasing the number of satisfied customers to become attached to a high-speed data networks, and it's begun to work very very well on the second part of the Year both. We now have a digital customer touchpoint strategy to enhance extreme of the customer the future and also to lower our costs the pandemic has indeed given as a big push forward on this digital journey home digital collections are up 78% in 2020 digital reloads or 106% and the tip of money digital transactions are up 153% So with this final wage
Let's take a look at our Outlook.
For $21 as you've heard so far on this call were very pleased with the results for twenty twenty peso recovering the business is very positive. And we think we're very well prepared going to 20 21 the subscriber growth receiving cash flow and reduce net debt, but we're cognizant that the reality Still Remains that we're still in the midst of a global pandemic and Health crisis is stuck in emergency levels in our country's the second wave is hitting most of our markets and some countries like Colombia Panama and Bolivia have been implementing you I'll be more limited restrictions page will take a while. We know that for a majority of our citizens in our markets to be vaccinated and also for economies to recover and we still do not really fully know how badly they have been heard Thursday. We don't think we're out of the woods yet. Not yet. Twenty. Twenty-One is still highly uncertain. So in 2021, we will use the same flexible and put an unsuccessful management approach that works very well for us is dead.
20 we will indeed be prudent and flexible as we were in 2020 and we will continue to invest for the long-term but now with the renewed and more confident investment firm as we see a strong and renew long-term outlook for our business. Broadband is very very resilient and it's demand is growing in our markets. That means that we will invest more in the business with more confidence and yet we will commit again to a minimum operating cash flow level of one point four billion dollars billion dollars or Twenty Twenty-One and our priorities will continue to be investing in the business and further reducing that debt rather than immediately assuming dividends or BuyBacks. As I said earlier. We believe that these are the best uses for cash flow at this time without ready for your questions.
We will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys to withdraw your question, please press star then choose at this time. We will pause momentarily to assemble the roster.
The first question is from second option of the NBC. Go ahead. Yes. Hello. I would like to start with where you finished. It seems like you are quite cautious on your outlook common and the target to deliver above 1.4 months, maybe I mean operating cash flow un twenty-twenty with improved momentum and a very solid subscriber intake on the mobile side and in especially cute in Q3, you will Faith used to calm some both service revenue and they bit off and I understand there's great uncertainty but it seems like you have accounted for a sort of a worst case scenario with new law bounced across your footprint key thing. Just please elaborate a little bit more on your thinking around twenty Twenty-One and and this target song
And also do you foresee further expansion of your capex plan in that? Thank you.
So listen, I think Stephen you're you've you've obviously picked up as as I think everyone has picked up in this.
Sort of do all modes that we are if you will we're we're a little a little of a dual mind here on the one hand. We're actually very optimistic and we think we are definitely on the right track. We finished very strong. And as I said earlier generally has continued to be strong. So for the short-term many 20-21, we're we're actually optimistic but you need to bear in mind two things one. We all seem to be very cautious and we don't want to get ahead of ourselves and deliver is better than promise and there's so much uncertainty out there for the reasons that I mentioned earlier that we would rather just be very very cautious and focus on deliver rather than promising which such an uncertain Outlook and and and you know that there's still a Health crisis in our
In our economy, is there still the potential for renewed pandemic waves and and all sorts of scenes are going to take longer than they will in the developed countries. We want to be very cautious at the same time. The reason why we are putting out this
You know sustained 1.4 in dollar operating cash flow Target is because we want to invest in the business and that's consistent with are very bullish very positive and optimistic outlook for the long term that we're very happy too strongly reiterate because we've seen nothing more than Broadband become more and more relevant in our Market places off and because of that we want to we want to have the ability to put Italy invest in the business. That means we want to continue to invest adding mobile sites. You know, we're we're adding successfully sold capacity and coverage in our markets and we want to continue to do that to expand our 4G coverage in the year to almost 80% of the total population markets without the expansions and what the Panamera part of why Bolivia and we also want to continue modernize our networks cuz it's working. The subscribers are quite frankly loving it particular job.
Columbia and we also want to invest in cable because we see continued growing demand. As I said on the call. We're now the same Runway into for that. We were before wage at $400,000 per year. So we want to have all the flexibility to continue to invest. So when you combine the two things are are very bullish outlook for the long-term with our desire to invest for that and then the possibility that the recovery may be dampened or take longer than we need to strike a very cautious tone or Twenty Twenty-One and at the same time give ourselves the ability to invest for the long-term. So when you put all that we basically saying to you is guys we're going to guarantee
1.4.
Think of it as a floor. We're going to guarantee in dollar terms 1.4 and let us just take it from there and give us the flexibility to manage on the outside like we did in 2028. I hope it gives you a full full vision of wild why we're doing these and why we think this is a smart approach Stephen. Yes, that's that's clear. Thank you.
Next question is from Peter Nielsen of a BDC still ahead.
Thank you very much. I'd like to address a two of you a good Mark is one Guatemala has of course been strong throughout this year, which I think is remarkable and and even stronger in Q4. Do you see any changes to that coming into this year and also just in Columbia where team highlighted the underlying positive Trends adjusted for the for the one of those? Thank you for last year. We often spoken before about the new entrant Etc. Do you think Columbia can continue to show underlying Positive Growth this year? So just focusing on on page two markets, please. Thank you.
Thank you, Peter. Yes, these are these are you know part of the reason why performance is so good over the last few months is because this markets are performing very well for us on what the model in particular did we had, you know record mobile made this year just north of a million at 5% year-on-year and now we have more than a million mobile subs and we've also been growing our home customer base some 90,000 made out for the year off indeed were having consecutive quarter of growth in both service revenue on eBay. We've invested in this business better significantly, so we bought additional Spectrum. We took the carriers on that Spectrum, we've improved that Network significantly and as a result of that were saying, you know strong performance.
Are going forward this remains a healthy to clear Market in which behavior has been very rational and at the point in time in wage fixing competition. Click up. We reacted very very well and very smartly so I remain very positive very very positive on Guatemala without a doubt and and the same is true on Columbia and and and you've seen the the numbers in Columbia really start to show the effects of the investment that we put into that Marketplace. We are we added a record of 878000 mobile apps in the quarter. We now have more than ten million mobile users. They're so cross the eight point marketer and we had it 33,000 customers in the quarter and our results good as they are a little distorted, but we didn't have some the government contracts in Q4 that we used to have before but the spider
They're very strong.
Um, and the reason I'm continue to be bullish Peter on Columbia is morphine the mental than just the quarter. We've been out for years building fiber cable you now have the second-largest fiber cable network in the country. We got that was low frequency spectrum that we never had before and we've built it pretty fast and we could total conviction off. So we're very ready with those two things and and the hard work that our team has put in place to position ourselves from growth in a market in which in Mobile despite the new engine maybe even because of the new entrant We Stand ourselves to also be a challenger. I keep reminding everyone internally and externally that we only have 15% market share back and we now have an empty Network where the largest holder of seven hundred megahertz Spectrum with an empty net worth.
So we're not playing the Legacy game or we don't have a congested Network that basically makes us an incumbent player we have the ability to play here is a challenger and we are doing exactly that took a head off the entry of warm partially into the market later this year, which of course is another reason for us to be a little bit cautious and we have it fixed Network that I'm supposed to be ready for defending our position with FMC Solutions. So the answer to you is yes, we expect and we're very bullish that Columbia will continue to leave it for us cuz we've turned ourselves now into a challenger a mobile with all the goods in the toolbox to play in a market.
To expand that a little bit because you know, it wasn't just Columbia and Guatemala Peter. I mean every one of our business has performed in Q4, then they did in in Q3 and you know, even even Panama which I flagged out which is sort of lagging a little bit some of the others they are almost back to where they worry if you want them, you know, where hold taskmasters. I think the businesses generally of all made a lot of strides in in the particularly in Q4, but you know as much as that we remain cautious about the Outlook
And he brings up a team brings a really good point Peter, which is worth noting really really good point. I mean kind of looks difficult because GDP down 20% in 2020. It's just a harshest of the economy's that has been hit but within that we have continued to grow both our Mobile on a cable subscriber base and those will stay on with us into the future. We actually added for the year almost 10,000 made out on cable when we bought a very strong and not very well defended killed position and in Mobile our subscriber base grew by 11% 120000 mobile made ABS, which I am told you the brand name is very strong ability to cross-sell is very strong and we have outside on our mobile position there. So just look through the the economic job.
I'm turning Panama.
Looking to the Future and you see how how strong the business was built there.
Thanks very much.
The next question is from Lina off of Garden Street. Go ahead.
Hi guys. I have a question related to Columbia phenomenal intake and and as you say much related to the network and the bathroom position being significantly improved, but can you maybe just say a little bit about what drove the intake if it's you know heavy discounts in the market just demand so we know if we should expect similar after levels or if they offer should come down with this massive intake.
It's it's neither actually, it's effectively increased coverage as we expanded our Network the minute you put out new towers in a new areas you pick up traffic and you pick up users and it's also increased in your penetration because now our new network further penetrates indoors and as a result of that you pick up some traffic and users in areas that you were before that and not even available. So it's it's largely the result of a increase coverage increase in do penetration and be the fact that to go with that better stronger Network. We also if you recall increased significantly our distribution network of conventional distribution Network off, so it's already sold to basically increased reach
Okay, so with the exception of the new entrant, you should have it continued very strong growth in Columbia based on the intake, correct. Thank you.
The next question is from Joanna Alphas of sebt. Go ahead.
Thank you to questions. If I may so looking into next year. We talked about, you know, Guatemala Columbia. And so, I'm just wondering I mean if we won't have a second wave and we assume that you know vaccine is getting two countries. And so forth things are not getting worse. You expect to see macroeconomic impact from you know, obviously the the DBT development in any of your countries will be tasked even if the Democrats here and it will take time to to recover to you expect to you know, that the consumers will have a tough time in those countries even after the Panthers and that's the first question and then the second question is a detailed one for you to you paying off from u.s. Dollar death. Just wondering do you have dead?
the expectation for the financial interest payment
In 2021, and also if you can comment on the tax expectations for 21. Thank you.
So I'll take the the first little bit and then hand it over to the team as you point out Juliana and I think a Stephen Stephen was also mentioning. Yes. There's a dead we get it. There's a bit of a dichotomy here. We almost sound like we have split personality. The business is doing extremely well and if you were to to read as I'm sure you have the GDP projections from most sources for our markets into twenty Twenty-One. They're all forecasting a very strong come back sometime in June twenty Twenty-One. We just said as I said to to the question from Stephen, we just said we we don't think we do you any good and we don't do anyone any good by putting money into the bank. We rather take the prudent and flexible approach be optimistic as I am, but be very cautious and as I said earlier, it worked really well for us off.
Maybe 20 and we were able to over-deliver we expect to use that very similar approach into twenty Twenty-One. And in order to that to do that. We need to take a little bit of an exception to The Rosie Project. You see from macroeconomists or for our economies be a little bit more conscious that it may take longer for the pandemic to really get out of our countries and play these dual personality issue to be optimistic, but cautious at the same time.
Over to you Tim by the way. Yeah. Okay, I think on the tech side we we expect taxes to be broadly where they were in 20 20 may be a little bit higher because we expect to improve our profitability there and we'll probably see a little bit more fun Slow Hands will be some higher withholding taxes and you know, our interest bill off probably best thing to do is look at Q4 and analyze it I think that is probably the closest she's going to get obviously we are we're trying to manage the the interest bill now we've been bringing down our offerings cost of debt. It would sort of 5.6% in in in the year to the end of December which compared to about 6.2% a year or so interest rates coming down and you know, the reason why we're paying down some more debt today is that we we expect it to end the year with with less cash than we actually have ended the year with so we're actually just Thursday.
Some of that Surplus cash to bring down our our gross, you know, gross-to-net obviously doesn't change the net position but it just brings a way that negative carry. So I hope that gives you a a good indication. Yeah, perfect. Thank you very much.
The next question is from Marcelo Santa JPMorgan, please go ahead. Hi. Good morning. Thanks for taking my question have actually two questions the first if you could comment on El Salvador Stellar performance, even with you remove the one off on the revenue side, I mean you mentioned that you had AWS Spectrum there. So just a little bit more color one more time to speak turnaround on on the revenue and the second question is on the bad debt. I think Tim commented on his prepared remarks that uh, you had this bad debt relief in the fourth quarter. So you're projecting the law to the second quarter and then the second half of the Year benefited. How are we how we still on on the bad debt coverage? Uh, do you think you are already normal guys are there is more bad debt through it in the coming quarters. Thank you.
So I'll I'll I'll I'll ask you to answer both about that and then the so-called one of which is not really a one-off.
But I want to give you just a big picture answer and Salvador to to make things very clear. There's there's two things going on in El Salvador and both of them are preceded by a problem is I think I made very very publicly two to two-and-a-half years ago, which is that we would fix El Salvador and we will fix it very very well. If you recall two and a half years ago, it was a young child and we made a promise of that point in time that we were going to focus and fix it and we've done two things. We completely changed the management team and if they're on the call, I want to give them here Kudos cuz we have a great leader in October and someone who's been able Now to turn the business around the right way motivating his team focusing on creating a great Brand New Jersey and focusing on the customer and just doing the things up real long-term value and and with that credibility then we did the second thing that matters in the long term and they're seeing the results now, which is dead.
We invest it. We put new Spectrum gave ourselves then we immediately more and more investment to build out that Network quickly on the team locally did a fantastic job. Now we have you know Network superiority in El Salvador customers are happy and we are back and able to defend their number one position in that country.
over to you today
Great. Okay, just about the best bet, you know a little bit complicated in Q4 and you know, bury my end under I-4 S9. It's it's very formula driven these days but you know, you'll remember I said in Q2 we took a very big charge on bad debt because we were not getting collections at the time. So we had to take a very large charge now, you know, can we put an awful lot of effort infections? I can't tell you how much effort the guys put into that band. And actually they came back very very well in the second half of the year. So so our our Q3 and our queue for bad debt rates bad debt charging a much lower than normal. So in Q4, I think we were something like about twenty million dollars lower than we would normally expect to book but you know to put that in context to the the overage charge for the full year. It was actually twenty million dollars higher than we had a year ago. All that is very interesting and it explains a little bit of the volatility in the year. But if you're asking about going forward, I think we are not dead.
Be back to normal going forward. So I wouldn't expect the level of volatility going forward. I think Al collection rates are are pretty much back to where they were in almost every business and every segment and I you know, that will mean that the the, you know, the algorithm the metrics that will work the bad debt charge will sort of return to to sort of steady-state and expect that for q1 the off position in Salvador, you know good performance in Q4. I mean, the reason I called out this deferred revenue adjustment we made was because you know, q 4 numbers were flattered as a consequence of that off another one need to kind of expect 10% sort of Diego's every quarter. Have you said that? You know, I don't want to take anything away. This is a normal, you know kind of adjustment. We we always on all busy this week. We look at the deferred revenue account at the end of the end we make adjustments. And so if you look at it on an annual basis if it's really no different and and that, you know, it's just a normalized wage.
I normalize right so
That the full-year performance is a better indication El Salvador than the actual view full performance having said that after many difficult years in El Salvador sentiment the team a great job and we really are doing very very well basically investment-driven, you know mobile delivery is taking place there.
I mean, you know, just if you look if you look at the subscriber count re-added just in the fourth quarter when the benefits of the AWS deployment really came forward. We added a hundred and fifty thousand a year out to move over which for a business is possible terrorist is really really strong and that's just, you know, execution and investment on that Network.
It's disturbing Trend that you it's the same train that you see in Columbia and kudos to the team there in Columbia as well. And as I said earlier to Nina's question, it's it's increased coverage on the back of the liquid is very strong Network now gives us, you know, Network superiority and great execution.
Great. Thank you very much.
The next question is from Bill Miller of m a i please go ahead.
Good morning, everyone. I'm curious if you look at three years and we just give us a slight view of where you think your revenues and earnings will come from birth three year basis, you know cable vs. Khabib vs. Uh, Financial transactions whatever is going to be but that would be a nice outlet for us.
Thank you Bill that allows me to reiterate something that I think is the most important thing of our call today, which is both how resilient business really is and how strong and and forcibly we want to reiterate our long-term Outlook realize that we don't have a crystal ball for 20 21 and we try not to put ourselves out on a limb there but we're extremely extremely happy to have had the opportunity to finally demonstrate to to the investment community at large that country to perhaps opinions that may be out. There are business regardless of where we operate is extremely resilient and we've demonstrated that this year with subscriber that grow significantly at almost record levels in a year of pandemic parking cable and mobile and with the cash flow that grew in dollar terms in and the year of the pandemic and we know how to manage wage.
So that's a very important point for us in 2020. Just how resilient our business is.
Despite where we operate on despite a year of a pandemic a number to our Outlook going forward. We could not be more bullish. We are more bullish than we have ever been home. So if we are of split personality for 20 21, we are of a single mind for the long-term Outlook which were happy to reiterate and bullish result took a number of reasons. And and and your question allows me to point those out Bail. Number one Broadband is more relevant than it has ever been in our markets. And we see that in Spades and to your question. We're going to be in the business of delivering Broadband fixed and mobile with a combination of those are will increasingly be seamless to the club but everything every single rely on that fiber Network that were building or mobile and keyboard and we are are more bullish now than ever we have been that we're becoming a
cable Centric network-centric Broadband Centric company
To we're very bullish because we have not only defended our Market position this year. We've actually improved them and we come out of this year with significantly strengthened mod positions in just about every country Bolivia what Salvador Nicaragua we have stronger Market positions that we did going in in Industry structures are improving now, you don't see that court reporter, but over the last few years, you've seen those industry structures improve and I believe they will continue to improve of course with the exception of Columbia in which there's a half to be at some point a a a shake-up of everything and forth because we have continued to invest and are continuing to invest. We now have Network advantages of superiority and our subscriber accounts are demonstrating all of these together.
We added record subscribers in the fourth quarter on mobile and on fixed. We're back to our run rate of almost 400,000 on a yearly basis cuz I'm a hundred thousand two for when you analyze that that's $400,000 for the year. So to your question bill, this is going to be a business that is cable Centric. Are you Broadband subscribers with tons of Mobile on top of it and a growing MSS business, but I don't want to make any promises on because it's being built as we speak.
That's great. Terrific. Thank you.
The next question is a follow-up from Mena October. Carnegie. Go ahead. Yeah. I just wanted to get out of the provisions for bad that in the month of the how much of that did you release in Q3 and Q4?
Can you do not have to bail me out of here for the whole year was higher than me and we had in 2019. So in a sense that the whole year, we you know, we had a much bigger bad debt charge than we would normally see now that said it was heavily skewed toward the first half of the particularly Q2. So when we get to the Q4 numbers a few phone numbers were I think it's round about twenty million dollars lower in bad debt charge for the court, then we would typically have see all we saw for instance in Q4 2019.
so
I haven't got the exact number for the top of my head those of that the key metrics for the full year. We took a $20 extra charge and in Q4 coincidentally. It was $21 loan. We took in Q4 nineteen.
Okay, and that's because the provision that you had in Bolivia for the release, how much was that?
I I can't remember exactly what they Bolivia number it was. I mean, we took big charges in El Salvador and Bolivia trading in Q2. I'm sure Michelle can sort of follow up with you later on for the for more specifics, but it's you know, it was you know, it's sort of its sort of flattered it but I don't really take anything away. I think I think it was Bolivia actually found it. Very very well.
It was an exceptional rebound. Is that just doing the modeling into next year? Just trying to understand what sort of the underlying Trend so that we don't end up going back into 21.
Perhaps the things to comment on Bolivia is that we see it and and we're confident now that we have come out of effectively two years worth of years of combined crisis. First of calls all the political crisis. And then that combined with the copy of Crisis the political firm now seems quite stable with quite a bit of support for the current president who's turned out to be, you know rational and you know, very friendly towards investment Club. He tries to stabilize the business going forward. So we're we're a lot more comfortable with the political and in my Chromebook Pro bolivians result of that, you know, we're happy as you have seen this month to continue to invest and grow in a business country.
Okay, perfect. Thank you. I think I I understand roughly where I should be. Thank you very much. I think I think