Q1 2021 Millicom International Cellular SA Earnings Call
Every day matters in our prepaid business, so thats, a 1% hit to prepay in this quarter.
With this revenue momentum in mobile and with the customers. We just added in Q1, we surely will sustain that strong revenue momentum in Q2 now.
Now, let's look on how this broad based customer growth is driving revenue on our largest countries on slide nine.
The main point on this slide is simply that every country is showing positive trends the services revenue growth rates in Q1 of this year, we're stronger than in Q1 of last year in every operation with perhaps the only exception of Bolivia.
You know the pandemic capabilities it very hard on the.
<unk> effect was compounded by a prolonged period of political and macro uncertainty on.
On yet is getting back on track very very quickly.
As you can see on the upward revenue trend and March in Bolivia was particularly promising.
Let's turn to slide 10 per look a bit of it.
So far you know that we have strong momentum in every country on in both on mobile and cable consumer businesses I want to spend a few minutes on the <unk>, which represents about 15% of our service revenue of.
About two years ago, we replaced and enhance our senior VP of the management team and we reviewed our strategic playbook.
We have now better segmented the market, we have redefined the streamlined and focused our product offerings per segment, we have invested in a more knowledgeable and better trained sales force and we have made significant investments instead of the Ark fiber networks for me to be on data centers.
Then of course came the pandemic, which as you know it a bit of beat business. The hardest you can see that on the left of this line.
It's especially true for our SME customers.
You have heard me say that our prepaid business came back the fastest on the strongest as soon as morbidity returned to our markets and that it is now supporting our growth.
You have also heard me say the cables stayed strong and it is growing almost double digit.
It'll be right behind prepaid and Kimball in its recovery and the reason for this is simply that our <unk> customer base is growing again.
We supported our SME customers as much as we did our Kimball customers and now they are coming back. We ended Q1 with more SME customers than we had before COVID-19. Some 10000 more and this is very important because SME is our largest customer segment in terms of revenue in this segment will lead the recovery of Middleby in the following quarters.
On our enterprise on the corporate customer segments remained resilient throughout the pandemic.
Our subscriber counts remained stable.
Of sustain or growing our market share on growth would return once the customers. In this segment are ready to assume the levels of spending back to pre COVID-19 levels.
It will come with the economy recuperating in business confidence building again as it appears poised to do in the second half of the year.
You can see on the right. The revenue growth is already coming back and we're not confident that bit of be will return to positive growth in the second half of the year.
This takes me to the final point I want to make on slide 11.
You've heard me say many times on our product is the network that our strategy is struggling to focus on debt. Therefore, we have of network centric sudden interest.
Means that we build own and manage our networks to deliver on the best possible connectivity to our clients. We do this by investing consistently in our networks over the long term and we did just that throughout the pandemic in 2020, a year of the pandemic hit we spent $1 billion on Capex, where a healthy 16% of sales of Skus.
The show the biggest slides one of our cable business largely to support our customer growth.
And we also invested heavily in our mobile networks to add or upgrade thousands of sites on particular advantage of newly acquired spectrum in some of our markets.
This investments have given us network superiority in many markets. This is key and is now widely recognized for the firmed up truck network quality around the world, including open signal of the detail on hoopla among others. This many awards for both our mobile and fixed networks validate what our internal data on our customer feedback is telling us on.
The phenomenon of customer intake that we have had over the last quarters demonstrates before I hand over to the team I want to again publicly thank the entire team of team for making this outstanding performance possible during the pandemic.
It is our purpose on our strategy that is giving us direction, but it is our people on our some of the people that are making the difference.
We now have more revenue more EBITDA more customers higher customer satisfaction on more growth than we had before COVID-19 hit we.
We did not only recover we grew during the COVID-19 and the reason for that is our Sunday the T. Rowe.
Now I'm conscious and aware of the pandemic is far from over the new waves of mutations are happening at vaccination in some of our countries will be snow and the new mobility restrictions are being put in place or maybe put in place in some of our markets.
A quarter ago, I was not of certain as I am now that the worst of the economic impact is behind us that our business is bigger and stronger than it was that it is growing faster and that our countries are finding their way out of the pandemic.
With all of our governments balancing the appropriate policies to protect the citizens while also allowing the economies to remain open and return to strong growth later this year.
Some countries will still need to use nightly curfews or mobility restrictions are on weekends of holidays.
We're already doing that but we don't expect the return to a total on the prolonged lockdown in any of our markets.
And where those mobility restrictions were put in place we ex fixed dose to be limited in time on geographies and more importantly, we expect the effect on our business to be very limited.
Now, let me turn it over to the team to go over the financials.
Thank you Ms Yan.
Well, what a difference the ethics. This time last year, we started the course of stones that we exited with great consistency.
This year, we came in the to the quotes of stone and we've exited it even stronger.
On Slide 13, you see our usual bridge from I F. Our as reported numbers of the Latam segment numbers, we are discussing on this call.
On Slide 14, you can see the breakdown of the two 2% year on year organic growth for the last time.
I, Unfortunately mobile with towards the positive year on year growth, mostly due to extremely strong prepaid performance volume was very strong as much of as explained all of whom fell a little but that was largely to reflect the mix shifts between pre and postpaid and in fact pricing has remained robust across most of them all.
<unk>.
Yeah.
Now Im Auryxia has talked about the fantastic home Kpis. This fueled the home revenue acceleration to just under 8%.
And B to B, plus we are still negative we've made substantial progress in the quarter and we are expecting to see the growth rates turn positive in the coming quarters.
On slide 15, you can see more detail on a country by country basis. Now. Please note that we have adjusted our earnings presentations with the local currency growth rates relative them organic growth rates. The main difference being changes in accounting of perimeter neither of which was the fact that in Q1 2021.
And in fact, you can find more details on our website.
So from the side of local currency growth rates, we saw once again lots of Mila in El Salvador, posting very strong revenue growth on them all of the rate benefiting from extremely good home of <unk> numbers offsetting a slight deceleration on the mobile business.
So now Salvador, the recent network and spectrum investments have fueled very robust mobile growth.
In Colombia growth improved in every business unit and in particular in our home business, which grew more than seven in the half percent and thats, our fastest growth rate in more than five years.
We also saw good sequential improvement in Honduras, all nice to breakeven as we did in Paraguay.
Now we are slightly behind in those markets that were more affected by COVID-19, Panama on Bolivia, but the gap is narrowing very rapidly.
Turning to EBITDA on slide 16.
You can see that we reported last time EBITDA of $638 million. This is up $38 million from a year ago and $4 million compared to Q4, 'twenty, which is traditionally our strongest quarter.
The EBITDA margin was also up strongly at 41, 7% and this is the highest margin with posted at least during my time at Millicom.
Now the underlying organic growth just on the 6% was mainly thanks to revenue growth and our continued focus on cost in fact, some of our concerns running ahead of budget, but these are all related to higher commercial ex the lithium so the record level of net guidance.
On slide 17, you can see the EBITDA by country.
It's fair to say that we have had a very good performance across the board.
Double digit growth in Guatemala, and El Salvador, Colombia up three 6% with no impact from the new entrants in the quarter and Honduras in Bolivia coming back strongly.
Finally, Panama, Paraguay, both improving sequentially.
And so on slide 18, you can see how this has filtered down to our operating cash flow, which we defined as EBITDA less capital expenditures Keith.
Keep in mind that there is some seasonality here given that our capex is usually backend it but I wanted to show you that we have had double digit Mcf goes in the quarter on this growth is coming very largely from the growth in EBITDA and not from lower Capex.
Now please turn to slide 19, where you can see how our debt position changed during the quarter.
Yes.
Underlying net debt was relatively stable of just over $5 3 billion. Now. This is typical for the first quarter, where we usually see of Fannie Big working capital of outsourcing with a following in swing in the second half.
The strength of the EBITDA growth resulted in proportionate leverage excluding leases dropping to three times, despite that slight increase in net debt.
And with lease sales broadly the same as last quarter.
Our overall leverage has reduced the 313 times.
Now as you know we made it's a priority to reduce our leverage and we've made that a priority joined the pandemic of you can see the progress on this front on the next slide on slide 20.
Last year, we focused hard on reducing on net debt given the uncertainty around EBITDA.
And we reduced net debt by around half a billion and this supported the leverage reduction in the last two quarters.
As we progress into 2021, we expect EBITDA will continue to improve that reflects a stronger recovery than we might have expected.
And this will be this will support more flexibility in our capital allocation.
As most of you said, we have more confidence in the macro outlook our businesses are performing well across the board on our EBITDA is growing.
So we intend to prioritize profitable investments as much as said.
We will continue to focus on deleveraging and we will also resume of share buyback program later this year.
With that let me hand back to Marcio to wrap up.
Thank you Tim before we take our questions. Let me recap the quarter first this was a very strong Q1 with record net additions and excellent operational performance across all our markets and business.
Second our growth is accelerating.
<unk> service revenue growth, returning which is driving both our strong EBITDA on operating cash flow growth in the quarter.
March was particularly strong as I've already said and this momentum has continued into April we're putting a lot more confident about our outlook today for the rest of the year than we did just a quarter ago.
Third our leverage continues to decline and we expect to make a lot more progress on this front by the end of the year, particularly as we now have EBITDA growth in the system.
Fourth and finally, our priority will remain to invest in the business on the entire networks to drive faster organic growth.
We're emboldened in this approach by the results over the last couple of quarters.
Because of that we want to keep the needed flexibility to invest more of this year and the business as we see the clear opportunity to capture more growth as.
As a result of all of this we are confirming our goal to deliver at least $1 4 billion in operating cash flow.
You all know that we could deliver much more but we feel it is best to retain the flexibility that has worked so well for us.
And with that we're now ready for your questions.
Thank you Mommy, Phil and thank you, Tim we will now begin the Q&A session.
If you would like to ask the question. Please let us know by E mailing us at investors at Millicom Dot Com and we will add you to the queue.
When I announce your name. Please on mute your line and make sure that Youre of video cameras turned on and please limit yourself to one question with one follow up so that we can give everyone an opportunity to ask the question.
And also please mute your line after the highest of your question.
So with that our first question will come from Stefan <unk> at Dnb Stephane.
Yes Hello.
The strong set of numbers both on subscriber intake of service revenue on it.
The call.
You talked a little bit about your outlook, but perhaps not the us outspoken nausea I've been earlier on in Q4, you commented that you were unlikely to meet the medium term targets.
Regarding service revenue growth mid single digit.
And the high single digits.
The tie single digit growth for the thought in 'twenty to 'twenty, one given the solid start at much easier comps solid subscriber intake.
Do you still think it is unlikely that we can meet these targets or.
Are you just being cautious.
I'll start out with the first question on the and I haven't come.
The question as well.
Sure.
So let me.
Start with the little bit of on kind of our our view on what has changed and then I'm sure Tim you can.
You can add on.
Yeah.
What we have seen during.
The last 15 months, and then make plus this quarter.
Is.
Prepaid coming back very very quickly.
Sooner is there some mobility.
And as we look forward, even with limited curfews are of nightly curfews here, we find the consumers on.
On prepaid on that very very quickly.
We're seeing that day.
Top up more.
It's just good for the prepaid business and the connectivity has remained particularly important for them.
Home as you have seen because penetration of our solo and people want broadband and we've been providing that service is growing rapidly and so on and we will be as I said, it's coming back so.
We feel a lot different from the way we call. It certainly a year ago on certainly the way, we felt one or two quarters ago.
Because we've seen that the teams and the strategy that we put in place to manage the condemning the reacted so strong so where we're at.
Ahead of pre COVID-19 levels.
With growth now stronger than it was before.
And we see.
A strong and healthy runway for us to continue to grow.
As we become more and more emboldened as we said a quarter.
Quarter ago.
We're likely.
Two invest more this year to capture more of that growth going forward because everywhere, we build more water everywhere rebuild cable network, we see the results immediately.
Whereas the.
The last quarter I was talking about keeping them flexibility.
Because there was a lot of uncertainty about macro and where we would be with regards to COVID-19.
And because we wanted to keep some flexibility to invest if we need it now Stefan we're keeping our flexibility largely because we want to invest to capture growth on a lot less because we are uncertain about our ability to manage through the remaining part of their pandemic try outlook is as you've noticed.
Certainly improve I'm pretty positive.
Tim do you want to add anything to this.
Yeah, I would just I would say I think I said to you guys.
Last quarter that my litmus test for the Q1 would be that we have and.
Higher gross on Q1, 'twenty because that was pre COVID-19.
Delivered that so so clearly Stefan you know you're right. The day out location is located so for US Q2, and Q3 are going to be.
Kind of customer of such difficult quarters for us last year I think the comment there is not going to be that meaningful and reality is certainly from an internal point of view when off sort of at the end of putting ourselves on the back to step over the Q2 'twenty comp.
We're looking at sequential growth and we're looking at guidance the growth against 2019. So yes on those headline numbers. We've got the winner of a good year in 2021, but I think in terms of our outlook, it's about sustainable long term growth rates.
I don't think that we can.
So the take a lack of other on on hitting the 2021.
We are building of business to drive.
So theres medium term growth rates on the sustainable basis in the future.
Thanks for taking on debt funds.
What I said was I think on the prepared remarks, which I believe is true.
Is that.
In developed markets you saw sort of a.
Covered.
Bubble, if you will for broadband.
We view it very differently in our markets.
Cost of penetrations are low and speeds are low and the man it's so high.
For us I think the runway, it's much longer and the.
And that's I think what's very very important for US there really is just a long runway for broadband adoption of Latin America. So what this couple of quarters of Sean. This is if youre on the strength. If you build the network that that demand will come sustainably to us into the future.
Yes.
And then.
And then just a question on Colombia.
As the new competitor.
You stated that you have seen.
Limited impacted in Q1, but what type of Athene in terms of operations.
Changes in price plans marketing activity.
Et cetera.
The flavor would be helpful. Thank you.
Yeah sure so.
First of little bit about the new entrant and then a little bit more of our Columbia So for clarity.
The new entrant launched.
On the right after Easter and early April.
It's actually from six months later than that amount that would launch. So obviously there were some some hiccups there the.
Launched itself.
In terms of the product offer was exactly as we had expected.
All of the work that we have done to see what they have done elsewhere.
Actively that it's something similar to what they did in chiller in terms of the product offered there was no no difference nothing unexpected there, which is basically you know do more times data the.
For the same price.
And the market matched immediately.
Actually we were so operationally prepared.
Right.
Within a matter of hours.
And of course U S as we expected.
Its pressure on our booth and that's completely within the expectations.
So, let's put that into context for us rather than what they did.
On.
We're not on incumbent.
In mobile in Colombia.
We only have 15% market share. So the opposite we are of challenger and Thats. What the team has been preparing to do regardless of the new entrants because we have that brand new network with very low payments on it.
So our network is not legacy constrained at all.
We can play the high allowance scheme that is what the market is playing out as particularly of high allowance on data again, because we have this brand new empty network on it.
So we are well positioned extremely well positioned to play what I called the volume day Mountains.
Because we increased commercial distribution as you know and we have this brand new empty network with full spectrum capacity, you would develop it faster than anyone else.
So what this is going to be is pretty much of a volume game and we need to focus on that for the periods of weird throw out which the sustained now.
Now it's still early.
But the launch has had.
Little impact so far on.
On our net ads and on our grows apps, we are growing through April in Colombia.
<unk> both on postpaid on on prepaid.
We're expecting that.
Q2 prepaid games will be in line with the hundreds of 200000 that we're expecting.
And our postpaid in Colombia through April after the launch was remain extremely strong as well now it's early days, but that's what we're seeing and we're focused on gaining subscriber base because we are not the incumbent in Colombia.
In the meantime, our home business in Colombia has remained very very strong.
It's actually our biggest home business and it's growing very very well you've seen the numbers.
Largely because we built all of that network on copper attrition on our system in Colombia is a very very limited.
And a bit of the business in Colombia is also picking up.
Now.
Strategically big picture in Colombia.
Number one we have an empty mobile network that we're putting to use in this future volume game that we see of all of Ob.
Two we are of state of the art home networking in Colombia.
We basically.
We engineer to get rid of the copper and now it's giving us a lot of growth.
And three throw the last year, we've increased not only network, but also commercial capacity on distribution of.
Number four in Colombia.
We will now have and this is why youre seeing us pick up volume.
<unk> two bolt on.
Or what type of about 30% 35% of Colombia.
The year ago, we had little mobile access because we were using high frequency spectrum in Bogota now, we have low frequency spectrum and empty network and access to mobile and overtime that is huge stephane and I assure you of also noted that fiber in Bogota has been opened.
The fiber owner in Bogota has spoken of network to new entrants. So we have now ex has to go with top of both on mobile and on fix on.
The largely on number five on Columbia Big Picture is we have a team that's executing extremely well we got our act together in Colombia.
Now.
There's some new on trend, it's a volume game.
We're not unencumbered on we got all of the goods to play really really well in that market.
It's the entire Columbia story of stuff on it.
Yes.
Okay, that's very cash.
Thank you Stefan <unk>. Our next question is going to come from a set of Santos of JP Morgan.
Uh huh.
You're going to have to on mute sorry, hi, good morning, <unk>, thanks for taking the questions.
I would like the west for competitive update, especially on specifically on Paraguay, and Bolivia, Paraguay more on the fix it segment and in Bolivia, how is the behavior of state on Intel.
Sure.
So let's start with part of why.
Yeah.
Macro and part of why COVID-19 has been managed quite well.
And we're now seeing a little pressure for the government to accelerate vaccinations.
But overall Paraguay has remained very resilient on it you know the just on the one.
If you go back to what we've done in Paraguay to answer your question more specifically, we've put in a new team two or three years ago.
We acquired spectrum.
We put on new network.
And with <unk>.
Significantly increase our quality of service.
At the same time, we continue to build homes.
And we've been closing that price gap that existed in Paraguay.
Basically the.
Defend completely our market share with a better value proposition.
GDP is expected to grow in Paraguay, 4%. So we've now basically stabilized Paraguay.
In terms of volume and Youll see that in the numbers and we think we've reduced the price gap and with all of the good start we have the network and the team on the content rights. We think we can begin to see that business grow into the future.
Particularly to answer your question, because we've seen competition be more rational it isn't that isn't there.
But it is more rationale marcelo and that's largely because of their casinos I think really strong in defending our position on our market share given little room to.
The others to play anything other than.
More stable more rational game and you've seen the quarter numbers I think the how they speak to this point the net adds are positive.
Both on mobile some 60000 and on the base, 6% year on year on home as well as growing quite nicely the business up 4% with almost 10000 net adds so Paraguay is more stable.
Bolivia.
As I said on the prepared calls.
It had a double whammy political and economic uncertainty and then competition.
Just to say it very quickly there is new management at Intel and net new management has appear to be a lot more rational in their pricing.
And I think that's with the view that I think the government made the company to produce and as a result, there's a lot more rational.
Tom.
And you saw that in the quarter actually in terms of of the net adds mobile 50 50000 net adds.
On the homeless phenomenon.
The net adds of <unk>.
<unk> quarter since 2000 on 18.
On March as I said on the calls.
Clearly strong so were simple levy.
Certainly more rational on pricing.
Coming up.
Tim maybe you want to add a little bit of color from your point of view.
No plenty of sand I think just maybe more generally pricing is pretty stable across all of our businesses and.
In the quarter.
You know kind of prepaid in particular has been we've actually seen some price rises in the market. So.
The thing is cost of is the some kind of the let's say out of that.
Perfect. Thank you very much.
Thanks, Marcelo So net we have the question that came in via email and then I'm just going to read it free for you Mark.
Mauricio and Tim it's from Joanna <unk> with the SCB.
She's asking maybe this is for you Tim how big is the impact from lower bad debt in the quarter and whatnot. We expect this trend to continue going forward.
The second question was on competition in Colombia, but actually I think we just answered that one so we can probably ignore that for now.
So it's all of that debt I mean, we did have a low of about that tell us and we had a year ago and probably about $10 million lower.
Some of it is kind of sustainable I think the thing that we're seeing is the collections are really very very good.
And they have been improving.
We have seen churn reducing.
People are leaving as much and we have introduced things like installation fees from 10 payments. So customers are more committed so whilst the bad debt charge is lower than it was a year ago. I think this is an underlying sustainable.
The sort of lowering of our bad debt charge of at least <unk>.
During these this next period.
So what happened during the pandemic is that we got better on our collection pilots on our processes, we put those upfront installations of the industry, followed and we just got increasingly better because it was critical and all of those improvements we've kept going forward and they seem to be making.
Creating a better industry.
Great. Thank you I think that should answer the.
Question from Joanna So next up we have Sergei Lucerne Lucerne scheme, sorry, Sergey <unk> from Gabelli.
You can go ahead with your question.
Good morning, guys. Thank you for thinking of the questions.
My first question is.
On mobile financial services.
I think you provided on the numbers a few quarters ago. I was just wondering has anything changed the mouse of your out of Africa and the I.
I guess I was.
Wondering about the mobile financial services business in Latin America, where do you expect it to go I guess what is the size now and what are the.
Do you expect to be in five years.
And that's of Great question Sergey of of course.
Just.
On building the business the.
MFS of our Fintech business and as we build it from a very strong base right of the way as you know, we got 5 million users.
We're going to give ourselves a little bit of time.
To get that properly build and eventually we will start reporting on it more of like on a quarterly basis.
Just don't think it's important for us to be focused on the important against where we're looking at the <unk>.
Building the business long term.
And that's true for actually the two platforms sort of data that we're trying to build as we grow cable mobile on beta would be there's a couple of platforms that we're building one as infrastructure of course.
No.
We have a ton of towers now of Dawson data centers of installed one in Bolivia, just yesterday actually we got about 101000 kilometers of fiber. So we got on infrastructural blocked from there that we're strategically of figuring out how to best optimize.
And I would put out and then we have this fintech platform we.
He brought aims for the new management. So we got on entire new management for our Fintech platform.
We're also developing local capabilities.
On the key point here is that.
Of those 5 million users are growing they are per stable and growing.
We're doing over $12 billion of transaction.
As I said on on a couple of quarters ago, we're still in that low margin high volume peer to peer game.
We want to build that platform.
The payment platform or choice on all of our markets and the bow on top of that we're going to build the fintech business. So we'll give you more color on the following quarters.
Okay.
Alright, Thank you and the my second question is.
On M&A I think over the past few quarters, you guys have been pretty clear of the near term focus is on resident of the cases, reducing debt and delivering on some of the just making the right investments for the future.
I guess my question is.
Given all of that are there still assets that you would be interested in even in this pandemic effect that the environment and also has anything changed has the pandemic or any other events over the past 15 months changed how you think about M&A and the relative attractiveness of certain markets.
Or sort of message.
So we don't have a current M&A focus Sergey.
Because I think as I've said, many many times.
The dot or.
Greatest opportunity.
Is the in house.
Now, we're putting our money as you see to grow the business organically and then as I've said, we want to keep the flexibility this year to put more money into.
Better coverage wider coverage both on the on cable on particularly on cable and mobile so that's where we're going to focus of our money and we also have <unk>.
Ms centimeter of times and turn on the many.
Which I think is very accretive to us so we want to keep our eyes focused on that.
Great. Thank you.
Alright, Thanks Sergei <unk>.
By the way if you would like to ask the question. Please remember to.
Send us an email at investors at Millicom Dot Com and we will add you to the queue.
We only have one more in the queue. So please reach out if you want to ask the question and actually the next question I'm going to read it for you Mauricio I think this one is for you. It's from the Bill Miller of our longtime shareholder.
He's saying that we've done a lot of strategic things recently.
What are our net strategic endeavors over the next one to three years.
Great question, I think I addressed it already.
Our strategic focus.
Remains to grow our core business.
We have great great broadband demand, which I believe is sustainable on long term I've said this for a number of years. It is job just not been crystallized.
So we will continue to remain.
Focused on.
Great network, great customer service.
On customer intake on a very network centric customer will continue to build on our customers for us.
Strategically we are now own the Latin America. So over the last five to six years, we've completed the exit property kind of reallocated a couple of Latin America.
On our organic growth of opportunity is strong.
Inorganic growth opportunity is also strong.
Within the business as I said earlier, because there's a lot of EBITDA almost $800 million with EBITDA that we manage but we don't.
On so that's a tremendous.
Panic opportunity that's in the house.
And we're very focused on building strategically these two new platforms, our infrastructure platform on our Fintech platform on those are important strategic moves for us.
On.
We're building this.
Unique.
Telecom infrastructure.
Tech platform, that's what our focus is on it.
Yeah.
Great. Thanks, Marty So we did get a follow up by email again from Joanna I'll pause that SCB.
She's asking you about the Tanzania.
Expect the proceeds and the timing I think she was also curious as to when we might the consolidated the results from Tanzania.
Perhaps that's more for you Tim.
Yeah.
And so we have now signed seven per purchase agreements are the are.
There was a period now that takes place which is.
The go through the regulatory approvals of spray typical in the whole telco deals.
And I think the things I don't have defined timelines, but we would expect the.
A normal basis.
It's most of them to go through those at those proceeds.
That's it.
We will not be the consolidator until we have gone through the process. We have regulatory approval last just in the last let's say.
We'll continue to hold it in our numbers until then.
But I think I you know I think frankly, we've got enough disclosure for you to understand the impact on the group anyway and make your own adjustments.
And you know all of us to the the proceeds we will be.
Using those to effectively pay down debt.
Would you see leverage how we haven't.
As with all of the previous Africa.
Sales, we haven't announced a price we won't do that.
Until we get to the end of the process.
So hopefully that covers.
You're going to have to just the trust there's a little bit of this was a competitive process with multiple bidders.
You can see that we're happy with the outcome strategically.
We all of our sort of financially because it helps us de lever and it helps us focus on our strategic future which of Latin America.
Perfect. Thank you we have Stefan <unk> from Dnb back with us for a follow up question Stefan.
Yes, I refrain from asking this question on the Ourself now I had the chance. So it's on the Panama. It was vaccine that market that surprised me the most.
Given the we enabled the strong recovery.
The state that the consumer businesses is back to growth and that compensates for weaker in the debate I can see if the subscriber numbers, both cable and mobile are strong.
Can you give some more flavor on the <unk>.
Overall development for you in Panama.
Yeah absolutely.
When when the dust settles.
On the pandemic.
On the impacted out on Panama, which as you know GDP came down 18% last year.
The small when the dust settles on that.
It will be clear that this was a phenomenal strategic move for us.
The dollar denominated.
<unk> market position execute ex strategically through M&A unless the.
In the 18 months.
You will have seen perhaps stephane that yesterday, we changed the brand the tivo after a very successful integration process. So we've now really created a single platform in Panama that did not exist two on a half years ago on its branded people.
On.
The outcome.
Once the dust settles.
It's going to show the.
Very very strong for us.
I think we're outperforming in every segment in Panama and as you know.
Customer intake is followed by financial results.
Or both of our home and mobile businesses in Panama.
The significant important intake.
Mobile is up 130000 net adds just this quarter the basis of 18% from what it was year ago pre COVID-19 levels mobile up 18% from what it was before because of cross selling which was the strategic move we wanted to implement is working remember we bought on AD.
That has significant the whole market share state of the art network on the mobile asset had much lower subscriber.
Subscriber base, we are cross selling.
Every time, we go to a home on would you. This throughout the pandemic, we sell Sim cards into the at home.
Cross selling out as the best.
But the home business itself.
It's actually been very very strong we added 13000 net adds the base is actually 8% year on year on <unk>.
Europe was down slowly so what is what does this tell me the.
The ones the impact of COVID-19 is behind the.
This business is going to blossom, and just kind of show all of the potential that we thought it had when we acquired the assets before COVID-19 hit.
Now lastly.
Panama was hugely hit by the pandemic, we all know that but it is also recovering super Super fast.
Government has reacted strongly and has one of the better vaccination programs that we're seeing in the region.
The numbers for copies of our high in Panama the impact was high.
Origination has been secured at the extremes of being secure on the Bakersfield vaccination program is in place.
And the result of that we'll also see we expect <unk> to be rebounding in Panama don't know exactly when it will be but with the economy will come back. So you can see I think that we believe would put all the pieces of the puzzle in Panama to.
To be ready for a strong comeback.
Okay sounds great. Thank you.
It will be.
Thank you Stefan So we'll go from one step on to another Stefan billing from Kepler circle you're on.
Thank you very much and hi, everyone yeah the.
A couple of questions. One is that a it seems to me about your of Central Latam markets have benefited quite significantly from rapidly growing remittances I think there's some data out there as well, but just curious if you agree on that and also how sustainable do you think this trend on the remittance.
<unk> is when when do you will you meet the let's say tougher comps on that side. That's the one question on the other one is once again, if you can share some details on M&A synergies and also how much integration costs you have incurred on how much is left thank you.
And I'll give you the team a few seconds to prepare the number too.
On the first one the fun.
Ah, yes, remittances have been very strong.
Throughout the COVID-19.
We expect remittances to continue to be strong.
They seem to grow every year high single digits and the interesting thing on this is why we think you will continue to grow as this trend goes back.
15 years, and they've remained strong there.
There were of question marks are on whether they would weaken throughout the pandemic debt on them.
<unk> demonstrated that they didn't so going forward, we expect them to continue to be strong. It just seems to be a natural very important part of what they are and as you know in most of the countries per shopper, perhaps of the exception of Panama and Nicaragua, remittances are 10% to 20% of GDP.
On growing low to high single digits. So it is it is just a structural part of those economies, which is very positive.
And on the synergy question Stefan.
While room rates now is running about $35 million that that is.
Basically the target level of Opex and Capex synergies that we set of apps as adjusted for Costa Rica.
And we've got them by the end of.
The second year, we are planning to get them.
Some of them made by the end of the third gasoline into the force yet.
Hedge that.
Of that.
We have spent around <unk> billion of zero million votes on the cost of the integration.
We will spend about $60 million the led <unk> to go.
If you remember the original per.
Estimate was $100 million, albeit that data of Costa Rica.
So I see that that this is going really really well and we've now effectively dismantle the integration team.
Team that we had because the business is running very well on the <unk> basis.
If you there's a lot of integrating stuff to deal with just migrate into NSA.
CRM system. So you know kind of a lot of stuff like that there's an awful lot of work.
But I do think that is very evident that we've been getting high levels of synergies than we are.
Originally expected on which can result in faster.
Perfect. Thank you very much.
Thank you on.
That is all the time that we had.
The only some of them to turn it back to you for some closing remarks and I also just wanted to mention that anyone who missed the video we show it at the beginning you can get to see it again at the end of molecule.
Well just to be creatures one two the entirety of good team. Thank you for a job really well done.
And I. Thank you to you all for participating on today's call and keeping them on eye out on how we do thank you very much and we look forward to speaking to you one on one of them in the next quarter. Thank you.
Good day.
Oh.
And on <unk>.
The San Francisco.
Good day.
Fantastic.
Okay.
The bank.
The agenda.
Yeah.
Yeah.
Okay.
The.
Thank you.
Sure.
Yes.
The bank on the back office.
Thank you.
Okay.
On anyway.
Go ahead of the cash.
True.
Hi.
Yeah.
Okay.
Okay.
Good day.
Good day.