Q2 2024 Liberty Latin America Ltd Earnings Call
Today's call is being recorded. I will now turn the call over to Danilo Fernandez, Senior Director of Corporate Business, C&W Panama.
Hernandez: Hernandez, Senior Director of Corporate Business, C&W Panel.
Operator: Good morning and welcome to Liberty Latin America's second quarter, 2024 investor call. At this time, all participants are in least an only mode.
Speaker Change: Good morning and welcome to Liberty Latin America's second quarter 2024 investor call. At this time, all participants are in listen-only mode.
Unknown Executive: Today's formal presentation materials can be found in the investor relations section of Liberty Latin America's website at www.lla.com. Following today's formal presentation, instructions will be given for a question and answer session. As a reminder, this call is being recorded.
Operator: Today's formal presentation materials can be found under the Investor Relations section of Liberty Latin America's website at www.nla.com. Following today's formal presentation, instructions will be given for a question-and-answer session. As a reminder, this call is being recorded.
Speaker Change: Today's formal presentation materials can be found under the Investor Relations section of Liberty Latin America's website at www.lla.com.
Speaker Change: Following today's formal presentation, instructions will be given for a question-and-answer session. As a reminder, this call is being recorded.
Operator: Today's remarks include forward-looking statements, including the company's expectations with respect to its outlook and future growth prospects, and other information and statements that are not historical facts. Extra results may differ materially from those expressed or implied by this statement.
Unknown Executive: Today's remarks may include forward-looking statements, including the company's expectations with respect to its outlook and future growth prospects, and other information and statements that are not historical facts. However, actual results may differ materially from those expressed or implied by these statements. For more information, please refer to the risk factors discussed in Liberty Latin America's most recently filed annual report on Form 10-K and quarterly report on Form 10-Q, along with the associated press release.
Speaker Change: Today's remarks may include forward-looking statements, including the company's expectations with respect to its outlook and future growth prospects, and other information and statements that are not historical facts.
Speaker Change: Actual results may differ materially from those expressed or implied by this statement.
Operator: For more information, please refer to the recent factors discussed in Liberty Latin America's most recently filled annual report on Form 10-K and quarterly reports on Form 10-Q, along with the associated press release. Liberty Latin America disclaims any obligation to update any forward-looking statement or information to reflect any change in its expectations or in the conditions on which any such statement or information is based.
Unknown Executive: Liberty Latin America disclaims any obligation to update any forward-looking statement or information to reflect any change in its expectations or in the conditions on which any such statement or information is based. In addition, on this call, we will refer to certain non-GAAP financial measures which are reconciled to the most comparable GAAP financial measures, which can be found in the appendices to this presentation, which is accessible under the investor section of our website. I would now like to turn the call over to our CEO, Mr. Balan Nair.
Speaker Change: Liberty Latin America disclaims any obligation to update any forward-looking statement or information to reflect any change in its expectations or in the conditions on which any such statement or information is based.
Operator: In addition, on this call, we will refer to certain non-GAAP financial measures which are reconciled to the most comparable GAAP financial measures, which can be found in the appendices to this presentation, with accessible under the investor's section of our website.
Speaker Change: In addition, on this call, we will refer to certain non-GAAP financial measures which are reconciled to the most comparable GAAP financial measures.
Speaker Change: which can be found in the appendices to this presentation, which is accessible under the investor section of our website.
Balan Nair: I would now like to turn the call over to our CEO, Mr. Balanero. Thank you, Danilo, and welcome everyone to Liberty Latin America's second quarter and first half results presentation. I'll begin with our group highlights and an overview of our operating results by reporting segments. Chris Noyes, our CFO, will then follow with a review of the company's financial performance.
Speaker Change: I would now like to turn the call over to our CEO , Mr. Balan Nair.
Balan Nair: Hello, and welcome everyone to Liberty Latin America's second quarter and first half results presentation. I'll begin with our group highlights and an overview of our operating results by reporting segment. Chris Noyes, our CFO, will then follow with a review of the company's financial performance. After that, we will get straight to your questions.
Chris Noyes: Chris Noyes, our CFO, will then follow with a review of the company's financial performance.
Balan Nair: After that, we will get straight to your questions. As always, I'm joined by my executive team from across the region, and I will invite them to contribute as needed during the Q&A following up prepared remarks.
Balan Nair: As always, I'm joined by my executive team from across the region, and I will invite them to contribute as needed during the Q&A following a prepared remark. As a point of housekeeping, we will both be working from slides, which you can find on our website at www.LLA.com.
Speaker Change: After that, we will get straight to your questions.
Balan Nair: As a point of housekeeping, we will both be working from slides, which you can find on our website at www.lla.com. Starting on slide 4 and our highlights, we continue to grow our high-speed broadband and post-paid mobile bases in the first half, adding 62,000 subscribers in total across the group. This was close to 200,000 additions, excluding Puerto Rico, where we experienced specific challenges related to the completion of mobile subscriber migration and the sunset of the ECF program, which I'll cover later in the presentation. We reported the adjusted Oybida of 763 million in the first half. This included double-digit rebase growth in Panama and Costa Rica in addition to high single-digit growth in Cable and Wireless Caribbean.
Speaker Change: As a point of housekeeping, we will both be working from slides, which you can find on our website at www.lla.com.
Balan Nair: Starting on slide four, and I'll highlight it. We continue to grow our high-speed broadband and postpaid mobile business on a quarterly basis, adding 62,000 subscribers in total across the group. This was close to 200,000 additions, excluding Puerto Rico, where we experienced specific challenges related to the completion of mobile subscriber migration and the sunset of the ECF program, which I'll cover later in the presentation. We reported adjusted OEBD of $763 million in the first half.
Balan Nair: We continue to grow our high-speed broadband and postpaid mobile basis in the first half.
Chris Noyes: We reported adjusted OEBD of $763 million in the first half.
Balan Nair: This includes double-digit rebase growth in Panama and Costa Rica, in addition to high single-digit growth in cable and wireless Caribbean. We expect these businesses to continue their momentum in the second half and growth for the overall group to improve as we drive better results in our Puerto Rico operation. We have been aggressive with our buyback activity this year, including the redemption of our convertible notes in July. We have now repurchased over $300 million of our equity and convertible bonds, which is equivalent to the total capital allocated during 2020.
Chris Noyes: This included double-digit rebase growth in Panama and Costa Rica, in addition to high single-digit growth in cable and wireless Caribbean.
Balan Nair: We expect these businesses to continue their momentum in the second half and growth for the overall group to improve as we drive better results in our Puerto Rico operations. Byback activity this year, including the redemption of our convertible notes in July, we have now repurchased over $300 million of our equity and converts, which is equivalent to the total capital allocated during 2023. Finally, we continue to look at inorganic ways in which to drive additional stakeholder value, and we are excited to announce our combination with Millicom in Costa Rica. This will improve the market structure, drive synergies, and importantly allow us to invest in fiber and 5G, delivering even better services for the Costa Rican people.
Chris Noyes: We have been aggressive with our buyback activity this year, including the redemption of our convertible notes in July . We have now repurchased over $300 million of our equity and converts, which is equivalent to the total capital allocated during 2023.
Balan Nair: Finally, we continue to look at inorganic ways in which to drive additional stakeholder value, and we are excited to announce our combination with Milicom in Costa Rica. This will improve the market structure, drive synergies, and importantly, allow us to invest in fiber and 5G, delivering even better services for the Costa Rican people. Turning to slide five. I'll begin our operating review with cable and wireless Caribbean. On the left of the slide, we present our Internet and Mobile Postpaid Edition, where, over the past 12 months, we've added 80,000 subscribers in total. Q2 saw flat broadband subscriber performance as our price increases resulted in higher churn during the quarter, which was in line with our expectations.
Chris Noyes: This will improve the market structure, drive synergies, and importantly, allow us to invest in fiber and 5G.
Chris Noyes: delivering even better services for the Costa Rican people.
Balan Nair: Turning to slide 5. I'll begin our operating review with Kibbel and Wireless Caribbean. On the left of the slide, we present our internet and mobile space additions, where, over the past 12 months, we've added 80,000 subscribers in total. Q2 soft flat broadband subscriber performance as our pricing increases resulted in higher change during the quarter, which was in line with our expectations. Importantly, we continue to deliver year-over-year revenue growth, and we expect underlying improvements in the second half, although anticipating some one-time impacts resulting from Hurricane Barrel, primarily in Jamaica. Postpaid mobile ads remain robust, driven by another solid quarter in Jamaica, where we've now added subscribers for 16 consecutive quarters.
Chris Noyes: Turning to slide five.
Chris Noyes: I'll begin our operating review with cable and wireless Caribbean.
Chris Noyes: On the left of the slide, we present our internet and mobile postpaid additions.
Chris Noyes: Q2 saw flat broadband subscriber performance as our price increases resulted in higher churn during the quarter.
Balan Nair: Importantly, we continue to deliver year-over-year revenue growth, and we expect underlying improvements in the second half, although anticipating some one-time impacts resulting from Hurricane Barrel, primarily in Jamaica. Postpaid mobile ads remain robust, driven by another solid quarter in Jamaica, where we've now added subscribers for 16 consecutive quarters. Moving to the center of the slide, we generated 4% revenue growth in the first half of this year, as our consumer momentum was bolstered by strong B2B performance and the award of some notable projects.
Chris Noyes: which was in line with our expectations.
Chris Noyes: Importantly, we continue to deliver year-over-year revenue growth, and we expect underlying improvements in the second half, although anticipating some one-time impacts resulting from Hurricane Barrel, primarily in Jamaica.
Chris Noyes: Postpaid mobile ads remain robust, driven by another solid quarter in Jamaica, where we've now added subscribers for 16 consecutive quarters.
Balan Nair: Moving to the center of the slide, we generated 4% revenue growth in the first half of this year. As our consumer momentum was bolstered by strong B2B performance to the award of some notable projects. Lastly, for Kibbel and Wireless, I want to provide an update following Hurricane Barrel, which impacted our operations in Jamaica, Grenada, St. Vincent, and the Grenadians in early July. Most importantly, we were very grateful that our colleagues were saved through the storm. These territories did, however, suffer some infrastructure damage, and we have had teams working around the clock to get our services back up and running.
Chris Noyes: Moving to the center of the slide, we generated 4% revenue growth in the first half of this year. That's our consumer momentum was bolstered by strong B2B performance through the award of some notable projects.
Balan Nair: Lastly, for cable and wireless, I want to provide an update following Hurricane Beryl, which impacted our operations in Jamaica, Grenada, St. Vincent, and the Grenadines in early July. Most importantly, we were very grateful that our colleagues were saved by the storm. These territories did, however, suffer some infrastructure damage, and we have had teams working around the clock to get our services back up and running. We're pleased to confirm that, on average, across our impacted markets, over 90% of our fixed and mobile network coverage is online. And this number continues to grow.
Speaker Change: Most importantly, we were very grateful that our colleagues were saved through the storm.
Balan Nair: We are pleased to confirm that, on average, across our impacted markets, over 90% of our fixed and mobile network coverage is online, and this number continues to grow. As ever, in these situations, we are dependent on the power company's reinstating networks so that we can deliver services, and this is an ongoing process. Chris will discuss in more detail, but our expected operational and financial impacts are manageable, and we expect our parametric program will cover the cash flow impact. CNW Caribbean remains on a great trajectory, and we are working with our communities to recover as soon as possible.
Speaker Change: We are pleased to confirm that on average, across our impacted markets, over 90% of our fixed and mobile network coverage is online, and this number continues to grow.
Balan Nair: As ever, in these situations, we are dependent on the power companies reinstating the networks so that we can deliver services, and this is an ongoing process. Chris will discuss this in more detail, but our expected operational and financial impacts are manageable, and we expect our parametric program will cover the cash flow impact. CNW Caribbean remains on a great trajectory, and we are working with our communities to recover as soon as possible. Moving to slide six in our CNW Panama segment, starting on the left of the slide, we re-delivered another solid quarter of Internet Subscriber Edition and Robust Revenue Growth.
Speaker Change: Chris will discuss in more detail, but our expected operational and financial impacts are manageable, and we expect our parametric program will cover the cash flow impact.
Balan Nair: Moving to slide six, and our CNW Panama segment, starting on the left of the slide, we delivered another solid quarter of Internet Subtribe editions and robust revenue growth. Our go-to-market strategy is not delivering consistent results across our high-speed network, and we expect this to continue through the rest of the year. In mobile, we reported an exceptional quarter, adding a record number of over 50,000 post-paid subscribers as we successfully won a significant number of customers who came into the market following DG Cells' exit earlier this year. As well as fixed networking investments, we are also investing in mobile with successful 5G trials during the May elections, showing technology leadership in the market.
Chris Noyes: We delivered another solid quarter of Internet Subscriber Editions.
Balan Nair: Our go-to-market strategy is now delivering consistent results across our high-speed network, and we expect this to continue through the rest of the year. In mobile, we reported an exceptional quarter, adding a record number of over 50,000 postpaid subscribers, as we successfully won a significant number of customers who came into the market following Digicel's exit earlier this year, as well as fixed network investments. We are also investing in mobile, with successful 5G trials during the May elections, showing technological leadership in the market.
Speaker Change: In mobile, we reported an exceptional quarter, adding a record number of over 50,000 postpaid subscribers as we successfully won a significant number of customers who came into the market following Digicel's exit earlier this year.
Speaker Change: As well as fixed network investments, we are also investing in mobile with successful 5G trials during the May elections showing technology leadership in the market.
Balan Nair: Moving to the center of the slide, we drove 6% top-line growth in the first half, with contributions coming from all of our product areas. Overall, we are creating an exciting platform in Panama, and are well positioned to continue the momentum we have built during the first half of the year.
Balan Nair: Moving to the center of the slide, we drove 6% top line growth in the first half, with contributions coming from all of our product areas. Overall, we are creating an exciting platform in Panama and are well positioned to continue the momentum we have built during the first half of the year. Turning to slide seven and Liberty, Puerto Rico, starting on the left of the slide.
Balan Nair: Turning to slide seven, and Liberty, Puerto Rico. Starting on the left of the slide, we reported a stable quarter of Internet subscriber ads. Fixed revenues flat year-over-year as growth in our RGU base over the past 12 months was offset by reduced our full following retention office, including for our ACP base, where, as we indicated on the first quarter call, have mostly stayed with us. In mobile, our post-paid subscriber performance was impacted by some factors. Following completion of the migration from AT&T in April, we experienced some disruption across our platforms, which led to increased change in Q2.
Speaker Change: Turning to slide 7, and Liberty Puerto Rico.
Balan Nair: We reported a stable quarter of internet subscriber ads. Fixed revenues were flat year over year as growth in our RGU base over the past 12 months was offset by reduced ARPU following retention of, including for ACP, who has been indicated on the first quarter call have mostly stayed with. In mobile, our postpaid subscriber performance was impacted by SinFact. Following completion of the migration from AT&T in April, we experienced some disruption across our platform, which led to increased churn in Q2. We also saw the final quarterly impact of ECF funding being removed for schools in Puerto Rico.
Speaker Change: We reported a stable quarter of internet subscriber ads. Fixed revenues flat year-over-year as growth in our RGU base over the past 12 months was offset by reduced ARPU following retention offers.
Speaker Change: Following completion of the migration from AT&T in April, we experienced some disruption across our platforms.
Balan Nair: We also saw the final quarterly impact of ECF funding being removed for schools in Puerto Rico. This drove a total of 39,000 subscriber losses in Q2 and 74,000 of losses over the past year. As mentioned on the last quarter's call, our proof of these customers is left in half our average across the base. We expect our operating performance to improve and saw some green shoots in our pre-paid segment during the second quarter as we added over 2,000 subscribers, which was only our second positive quarter since we acquired the AT&T operation in 2020. In the center of the slide, we show the revenue made by product in Puerto Rico and a first half year-over-year decline of 11%.
Speaker Change: which led to increased churn in Q2.
Balan Nair: This drove a total of 39,000 subscriber losses in Q2 and 74,000 losses over the past. As mentioned on the last quarter's call, ARPU for these customers is less than half our average across the base. We expect our operating performance to improve and saw some green shoots in our prepaid segment during the second quarter as we added over 2000 subscribers, which was only our second positive quarter since we acquired the AT&T operation in 2020.
Balan Nair: In the center of the slide, we show revenue mixed by product in Puerto Rico and the first half year over year decline of 11%. Chris will cover the financial puts and takes in greater detail within his section.
Balan Nair: Chris will cover the financial puts and takes in greater detail within his section. I will provide more color on our Puerto Rico story in the next slide, but we want to be very clear that our long-term message remains consistent. We have expected greater sequential adjusted ABDA expansion in the second quarter. However, some unanticipated factors affected our performance. And this has led to a small shift in our target timeline to achieve SIN now. The full effect of synergies and cost savings are still expected in the third and fourth quarters, as we have previously indicated. These synergies, operating cost improvements, and top-line sequential growth bit FMC should drive adjusted Oyveda to more than $45 million per month in the second half.
Balan Nair: I will provide more color on our Puerto Rico story in the next slide, but we want to be very clear that our long-term message remains consistent. We had expected greater sequential adjusted EBITDA expansion in the second quarter. However, some unanticipated factors affected our performance, and this has led to a small shift in our target timeline to achieve certain milestones.
Speaker Change: We had expected greater sequential adjusted EBITDA expansion in the second quarter. However, some unanticipated factors affected our performance, and this has led to a small shift in our target timeline to achieve certain milestones.
Balan Nair: The full effect of synergies and cost savings is still expected in the third and fourth quarters, as we had previously indicated. These synergies, operating cost improvements, and top-line sequential growth with FMC should drive Adjusted OEVIDA to more than $45 million per month in the second half, however, now towards the end of the year, still setting us up for significant expansion in adjusted OEBDA for 2025. Moving to slide eight, we wanted to provide an overview of execution today, challenges we've faced, and our next steps to drive significantly improved results in Puerto Rico, starting with the commercial side of the business.
Speaker Change: These synergies, operating cost improvements, and top-line sequential growth with FMC should drive adjusted OEVD to more than $45 million per month in the second half, however, now towards the end of the year.
Balan Nair: However, now towards the end of the year. Still setting us up for significant expansion in the adjusted Oyveda for 2025.
Balan Nair: Moving to slide 8, we wanted to provide an overview of execution today, challenges we've faced, and our next steps to drive significantly improved results in Puerto Rico. Starting with the commercial side of the business. In terms of execution, we have consistently reported solid subscriber additions across our fixed operations over many years. Fix revenue represents 40% of our Puerto Rico total. And so this remains a strong, strong foundation for the business. In mobile, we were able to maintain the stable post-paid base until migration began. This is a market structure where we can stabilize and grow share.
Speaker Change: Moving to slide 8, we wanted to provide an overview of execution today, challenges we've faced, and our next steps to drive significantly improved results in Puerto Rico.
Balan Nair: In terms of execution, we have consistently reported solid subscriber additions across our fixed operations for many years; fixed revenue represents 40% of our Puerto Rico total. And so this remains a strong foundation for the business. In mobile, we were able to maintain a stable postpaid base until migration began.
Speaker Change: starting with the commercial side of the business.
Balan Nair: This is a market structure where we get stabilized and groceries. The prepaid performance I mentioned on the prior slide is just the beginning. The acquisition of Dish's Boost subscribers and Spectrum, which we expect closing in Q3, is an exciting addition and catalyst. Moving to operational aspects, the key execution point here was completing the migration in a way that We are now through the worst of the disruption and a stabilizing platform so that our commercial colleagues can start driving top-line growth. Turning to slide nine, and Liberty Co-Study.
Balan Nair: The prepaid performance and mention on the price slide is just the beginning. In terms of challenges, during and following the migration, we have seen subscriber losses across our post-paid and prepaid basis. I'll be at some Q2 improvements in prepaid, which was the first segment to be migrated. We were also impacted by the ECF program sunset, which is now completed. Importantly, we now have a tremendous opportunity to leverage a full service product to drive FMC penetration from current levels of around 25%. In mobile, we have a market share around 20%, and there is clearly significant room to grow as we ramp up our commercial efforts.
Speaker Change: Albeit some Q2 improvements in prepaid, which was the first segment to be migrated.
Speaker Change: We were also impacted by the ECF program sunset, which is now completed.
Speaker Change: In mobile, we have a market share around 20% and there is clearly significant room to grow as we ramp up our commercial efforts.
Balan Nair: The acquisition of dishes boosts subscribers and spectrum, which we expect closing in Q3, is an exciting addition and catalyst here. Moving to operational aspects, the key execution point here was completing the migration in April. This is a complex undertaking for any operator, and we experience challenges, in particular related to mapping and billing as we tried to convert an extensive number of legacy AT&T plans with associate coding to our new platform. We are now to the worst of the destruction and a stabilizing platform so that our commercial colleagues could start driving top line growth. Finally, the financial areas.
Speaker Change: This is a complex undertaking for any operator, and we experience challenges, in particular related to mapping and billing, as we try to convert an extensive number of legacy AT&T plans with associate coding to our new platform.
Balan Nair: From an execution perspective, we have successfully managed to sustain and grow our fixed revenue for a number of years. We have also mostly exited the TSA and expect minimal costs in the second half. Challenges have centred around certain migration-related costs which are now mostly behind us, as mentioned. The unanticipated fact in Q2 was a decision, with a customer relationship in mind, to write off 12 million of bad debt. Looking forward, we expect to drive top line growth through our commercial initiatives, cost efficiencies from our headcount reduction and other initiatives, and drive synergies.
Speaker Change: From an execution perspective, we have successfully managed to sustain and grow our fixed revenue for a number of years. We have also mostly exited the TSA and expect minimal costs in the second half.
Speaker Change: Challenges have centered around certain migration-related costs, which are now mostly behind us. As mentioned, the unanticipated factor in Q2 was a decision with our customer relationship in mind to write off $12 million of bad debt.
Balan Nair: To reiterate, we remain very confident of our longer-term plans and excited by the opportunity to retain the growth in Puerto Rico, tending to slide 9 and Liberty Costa Rica. Starting on the left of the slide, we delivered a solid, fixed subscriber performance with NADAD similar to the first quarter. We referenced the challenging competitive backdrop in Costa Rica's fixed market in previous calls. This was one of the drivers for the transaction with Millicom that we have announced. I'll provide more color and that deal in our latest light, but we think it will be great for all stakeholders, particularly our customers.
Speaker Change: Turning to slide 9, and Liberty Costa Rica.
Speaker Change: Starting on the left of the slide, we delivered a solid fixed subscriber performance with net ads similar to the first quarter.
Speaker Change: I'll provide more color on that deal in a later slide, but we think it will be great for all stakeholders, particularly our customers.
Balan Nair: In mobile, we reported another strong quarter with growth concentrated in the higher-value post-paid segments where NADADs were over 60% higher compared to the prior year quarter. Following successful trials, we were first to market with a commercial 5G offering in July, further reinforcing our technology and service leadership in the market. Moving to the center of the slide, we reported how the rebase revenue growth of 6% in the first half, led by mobile.
Balan Nair: Next to slide 10 in our final segment, Liberty Networks. On the last side of the slide, we present revenue for current and prior year of first half. Enterprise continues to be a fastest area of growth, rising by 11% on a rebase basis year over year. This performance was driven by connectivity growth and higher value added services, penetration as customers migrate their mission critical operations on our cloud infrastructure. To help drive this growth, we host events such as our annual Data Center and Cyber Security Summit. These are great forums for our teams to showcase our capabilities to customers, while at the same time getting valuable insights into their needs.
Speaker Change: Next, to slide 10, and our final segment, Liberty Networks.
Speaker Change: Enterprise continues to be our fastest area of growth, rising by 11% on a rebate basis year over year.
Speaker Change: This performance was driven by connectivity growth and higher value-added services penetration as customers migrate their mission-critical operations on our cloud infrastructure.
Speaker Change: These are great forums for our teams to showcase our capabilities to customers, whilst at the same time getting valuable insights into their needs.
Balan Nair: Despite facing a year-over-year decline in IRU non-cash revenues, our wholesale business continues to demonstrate resilience. Importantly, we are building a strong foundation of monthly recurring revenues, which bodes well for future prospects. In the center of the slide, we present our revenue split and highlight the strong financial profile of the business. Liberty Networks has an adjusted orbit margin of both 50%, and given its relatively low capital intensity and operating free cash flow drops over 40%.
Speaker Change: Despite facing a year-over-year decline in IRU non-cash revenues, our wholesale business continues to demonstrate resilience.
Speaker Change: Importantly, we are building a strong foundation of monthly recurring revenues.
Speaker Change: In the center of the slide, we present our revenue split and highlight the strong financial profile of the business.
Balan Nair: Finally, to slide 11 and then update on inorganic moves we are making to drive additional value. Firstly, taking the left of the slide and last week's announced agreement to combine our operations with Tigo and Costa Rica. This transaction will create significant value. In particular, it will improve the fixed market structure, create cost synergies through enhanced scale, bring cross-cell opportunities for FMC across the Tigo customer base, and create network synergies given significant footprint overlaps. and a naval FTTH investment synergies and compete with the existing three FTTH networks in the country.
Balan Nair: Finally, to slide 11 and an update on inorganic moves we are making to drive additional value. Starting with the left side of the slide and last week's announced agreement to combine our operations with Tigo and Costa Rica and enable FTTH investment synergies and compete with the existing three FTTH networks in the country. Secondly, an update regarding the acquisition of Spectrum and subscribers from DISH, which we announced last November. We have received HSR clearance and anticipate the transaction receiving FCC clearance in Q3.
Speaker Change: Finally, to slide 11, an update on inorganic moves we are making to drive additional value.
Speaker Change: Firstly,
Speaker Change: Taking the left of the slide and last week's announced agreement to combine our operations with Tigo and Costa Rica.
Speaker Change: create network synergies given significant footprint overlap.
Balan Nair: Secondly, an update regarding the acquisition of Spectrum and subscribers from Dish, which we announced last November. We receive HSR clearance and anticipate the transaction receiving FCC clearance in Q3. The purchase consideration will be spread across four annual payments from the day of closing, with $99 million due at completion. Our commitment to Puerto Rico and the US Virgin Islands is reflected in this deal, where we will acquire a combination of over 100 megahertz of spectrum and over 110,000 Boost subscribers. Upon completion, this transaction will provide us with valuable spectrum that will allow us to add more capacity, increase speeds, and further strengthen our 5G mobile network, as well as increase our scale in the pre-paid market.
Speaker Change: Secondly, an update regarding the acquisition of Spectrum and subscribers from DISH, which we announced last November .
Balan Nair: The purchase consideration will be spread across four annual payments from the date of closing, with $99 million due at completion. Upon completion, this transaction will provide us with valuable spectrum that will allow us to add more capacity, increase speeds, and further strengthen our 5G mobile network, as well as increase our scale in the prepaid model.
Speaker Change: Our commitment to Puerto Rico and the U.S. Virgin Islands is reflected in this deal.
Christopher Noyes: With that, I'll pass you over to Chris Noyes, our Chief Financial Officer, who will take you through our financial performance before we move on to your questions. Chris, thanks. Ballin. I'll now take you through our financial results in greater detail, starting with our Group revenue and Adjusted Oybeda performance on slide 13. Sequentially, a reported revenue group by 2% to $1.1 billion, and Adjusted Oybeda was 4% higher at $389 million in the second quarter. Revenue progression in the quarter reflects the positive financial results of the operational actions Ballin highlighted. Oybeda Growth was bolstered by operational leverage, with our margin improving by 75 basis points to 34.8%.
Chris Noyes: With that, I'll pass you over to Chris Noyes, our Chief Financial Officer, who will take you through our financial performance before we move on to your questions.
Christopher Noyes: Thanks, Balan. I'll now take you through our financial results in greater detail, starting with our group revenue and adjusted OEBDA performance on slide 13. Sequentially, reported revenue grew by 2% to $1.1 billion, and adjusted OEBDA was 4% higher at $389 million in the second quarter. Revenue progression in the quarter reflects the positive financial results of the operational actions Balan highlighted, the way the dog growth was bolstered by operational leverage with our margin improving by 75 basis points to 34 points. Revenue declined slightly as positive momentum in C&W Panama, C&W Caribbean, and Costa Rica was more With respect to adjusted OEBDA, CNW Panama was our best performing segment, posting double-digit rebase growth, and CNW Caribbean delivered high single-digit rebase growth.
Chris Noyes: Sequentially, reported revenue grew by 2% to $1.1 billion, and adjusted OEBDA was 4% higher at $389 million in the second quarter. Revenue progression in the quarter reflects the positive financial results of the operational actions Balan highlighted.
Christopher Noyes: Year-over-year revenue was 1% lower on a rebase basis, and adjusted Oybeda decline by 12%. Revenue declines slightly as positive momentum in CNW Panama, CNW Caribbean, and Costa Rica was more than offset by declines in Puerto Rico and Liberty Networks. With respect to Adjusted Oybeda, CNW Panama was our best performing segment, posting double-digit rebase growth, and CNW Caribbean delivered high single-digit rebase growth. Similar to revenue, the growth in these segments was more than offset by significant declines in the Puerto Rico and Liberty Networks, both of which we'll discuss in subsequent slides.
Chris Noyes: Year-over-year revenue was 1% lower on a rebase basis and adjusted OEBDA declined by 12%.
Chris Noyes: Revenue declined slightly as positive momentum in C&W Panama, C&W Caribbean, and Costa Rica was more than offset by declines in Puerto Rico and Liberty Network.
Speaker Change: With respect to adjusted OEBDA, CNW Panama was our best performing segment, posting double digit rebase growth, and CNW Caribbean delivered high single digit rebase growth.
Christopher Noyes: Moving to slide 14 and our PINI additions and adjusted FCF results for Q2, on the left we incurred PINI additions of $180 million in Q2 or 16% of revenue. This compares to $192 million, or 17% of revenue, last year Q2. During Q2, we built and or upgraded nearly 100,000 homes and launched initial 5G service in Costa Rica and came. On the right, we posted that adjusted FCF before partner distributions of negative $7 million, partner distributions in Bahamas of $11 million, which brought our adjusted FCF to negative $18 million for Q2. This result compares to adjusted FCF of $31 million per Q2 2023.
Christopher Noyes: Similar to revenue, the growth in these segments was more than offset by significant declines in Liberty Puerto Rico and Liberty Networks, both of which we will discuss in subsequent slides. Moving to slide 14 and our P&E additions and adjusted FCF results for Q2. On the left, we incurred P&E additions of $180 million in Q2, or 16% of revenue. This compares to $192 million, or 17% of revenue last year. During Q2, we built and or upgraded nearly 100,000 homes and launched the initial 5G service in Costa Rica.
Speaker Change: During Q2, we built and or upgraded nearly 100,000 homes and launched initial 5G service in Costa Rica and Cayman.
Christopher Noyes: On the right, we posted adjusted FCF before partner distributions of negative $7 million. Partner distributions in the Bahamas of $11 million, which brought our adjusted FCF to negative $18 million for a key. This result compares to adjusted FCF of $31 million for Q2 2020. The primary driver of the year-over-year change was principally related to our lower adjusted, Starting with CNW Caribbean, we reported $368 million of revenue in Q2, reflecting 4% rebase growth.
Christopher Noyes: The primary driver of the year-over-year change was principally related to our lower adjusted FCF. Way to Go.
Speaker Change: The primary driver of the year-over-year change was principally related to our lower-adjusted oedipa.
Christopher Noyes: Slide 15 recaps our segment results. Starting with CNW Peruvian, we reported $368 million of revenue in Q2, reflecting 4% rebase growth. Specifically, we achieved another quarter of growth in all three business categories, posting 2% in fixed, 5% in mobile, and 5% in B2B on a rebase basis. The main drivers of higher residential fixed mobile revenue were higher arpus driven by price increases across the number of markets, and year-over-year subscriber growth in broadband and post-paid. The positive B2B performance was driven by project-related revenue, particularly in the Bahamas. We posted a Justin Oeba of $157 million, representing 8% rebase growth, fueled by the aforementioned revenue growth and disciplined on-direct and indirect costs.
Christopher Noyes: Specifically, we achieved another quarter of growth in all three business categories, posting 2% in fixed, 5% in mobile, and 5% in B2B on a rebase basis. We posted adjusted OEBDA of $157 million, representing 8% rebase growth, fueled by the aforementioned revenue growth and discipline on direct and indirect costs. As a result of operating leverage, our adjusted OEBDA margin improved by over 150 basis points year over year to 43%. As Balan mentioned, Hurricane Beryl impacted our Jamaica, Grenada, and St. Vincent operations in early July, damaged or destroyed networks, residences, and businesses, and loss of power has impacted certain of our customers in these areas. We currently expect to be impacted in revenue and adjusted OEBDA by $10 to $20 million in H2 and will incur an additional $10 to $20 million of P&E additions to repair, replace, and or strengthen our infrastructure.
Speaker Change: The main drivers of higher residential fixed and mobile revenue were higher ARPUs, driven by price increases across a number of markets and year-over-year subscriber growth in broadband and postpaid.
Speaker Change: The positive B2B performance was driven by project-related revenue, particularly in the Bahamas.
Christopher Noyes: As a result of our operating leverage, our adjusted Oeba.margin improved by over 150 basis points year-over-year to 43%. As Vollen mentioned, Hurricane Barrel impacted our Jamaica, Grenada, and St. Vincent Operations in early July. Damage or destroyed network, residences, and businesses, and loss of power has impacted certain of our customers in these markets. We currently expect to be impacted in revenue and adjusted Oeba.da by $10 to $20 million in H2, and will incur an additional $10 to $20 million of Pne additions to repair, replace, and or strengthen our infrastructure. Good progress is being made on our recovery efforts.
Christopher Noyes: Next, moving to cable wireless panel. CWP generated $197 million of revenue, reflecting 9% rebase revenue growth. As in the Caribbean, we recorded rebase top-line growth across all business lines, with 4% in fixed, 4% in mobile, and 17% in B2B. Growth was mainly fueled by increased sales activity in broadband, increases in prepaid recharge activity, and B2B project was. We posted $65 million in adjusted Oeba. Q2 representing 10% rebase year-on-year growth, with performance driven by revenue growth. Turning to Liberty Networks, we generated $119 million in revenue and $63 million in adjusted OEBITDA, resulting in rebase declines of 1% and 13%, respectively.
Speaker Change: Good progress is being made on our recovery efforts.
Speaker Change: Next, moving to Cable Wireless Panama. CWP generated $197 million of revenue, reflecting 9% rebates revenue growth.
Speaker Change: As in the Caribbean, we've recorded rebased top-line growth across all business lines with 4% in fixed, 4% in mobile, and 17% in B2B.
Speaker Change: Growth is mainly fueled by increased sales activity in broadband, increases in prepaid recharge activity, and B2B project goals.
Speaker Change: We posted $65 million of adjusted OEBDON Q2, representing 10% rebased year-on-year growth, with performance driven by revenue growth.
Christopher Noyes: Turning to Liberty Networks, we generated $119 million in revenue and $63 million in adjusted EBITDA, resulting in rebate declines of 1% and 13%, respectively. Our year-over-year decline in adjusted OEBDA was due to the aforementioned lower IRU revenue and a bad debt adjustment for two large customers of roughly $5 million. Mobile, however, declined by 21% on a rebase basis, driven by mobile subscriber losses and connection to the migration, and by a $9 million reduction in equipment sales due in part to the migration impacting commercial activity.
Speaker Change: Turning to Liberty Networks, we generated $119 million in revenue and $63 million in adjusted EBITDA, resulting in rebates declines of 1% and 13% respectively.
Christopher Noyes: Wholesale revenue declined due to a roughly $6 million decrease in non-cash IRU emeritization and accelerations year-of-year, which was partially offset by double-digit growth in enterprise driven by growth in connectivity and IT as a service, mostly in Columbia, Dominican Republic, and Honduras. Our year-of-year decline in adjusted Oeba.da was due to the aforementioned lower IRU revenue and a bad debt adjustment for two large customers of roughly $5 million. Second, from the right, Liberty Puerto Rico, Q2 revenue was $309 million, reflecting a 12% rebase decline year-over-year. Residential fixed revenue was down 1% on the back of broadband volume gains in the past 12 months, which were more than offset by lower RQ, primarily due to attention discounts, in part related to ACP detention.
Speaker Change: Wholesale revenue declined due to a roughly $6 million decrease in non-cash IRU amortization and accelerations year-over-year, which was partially offset by double-digit growth in enterprise driven by growth in connectivity and IT as a service.
Speaker Change: Our year-over-year decline in adjusted OEBDA was due to the aforementioned lower IRU revenue and a bad debt adjustment for two large customers of roughly $5 million.
Speaker Change: Second from the right, Liberty Puerto Rico. Q2 revenue was $309 million, reflecting a 12% rebate decline year over year.
Speaker Change: Residential fixed revenue was down 1% on the back of broadband volume gains in the past 12 months, which were more than offset by lower ARPU, primarily due to retention discounts, in part related to ACP retention activities.
Christopher Noyes: Activity. Mobile, however, declined by 21% on a rebased basis driven by mobile subscriber losses in connection to the migration and by a $9 million reduction in equipment sales due in part to the migration impacting commercial activities. B2B revenue declined 6% on a rebased basis, driven by the ECF sunset, which led to a reduction of 39,000 subscribers in the quarter and 74,000 in the last 12 months. Adjusted Oyvada decreased substantially year over year, as we reported $71 million, which reflected a rebased decline of 48% as compared to Q2 2023. The negative year-on-year performance was impacted by lower revenues discussed above and higher op-x related to the migration, integration activities and impacts, partly offset by lower direct costs including TSA and enrollment.
Christopher Noyes: On a sequential basis, adjusted Oyvada improved by 3% as revenue declined, one more offset by lower direct and indirect costs.
Christopher Noyes: On a sequential basis, adjusted OEBDA improved by 3% as revenue declines were more than offset by lower direct and indirect costs. I'll discuss Puerto Rico's Q2 results more in the next slide. All three business lines contributed to the positive top line performance, with the main driver of organic growth being mobile revenue, which was 8% higher year over year on a rebase basis. However, sequentially, our growth is impacted by fixed ARPU pressure and lower mobile equipment.
Christopher Noyes: I'll discuss Puerto Rico's Q2 results more in the next slide. Concluding with Costa Rica on the far right, we deliver Q2 revenue of $147 million in adjusted Oyvada of $53 million, reflecting 4% rebased revenue growth and rebased adjusted Oyvada growth of 1%. All three business lines contributed to the positive top line performance, with the main driver of organic growth being mobile revenue, which was 8% higher year over year on a rebased basis. Sequentially, our growth was impacted by fixed RPU pressure and lower mobile equipment sales. Adjusted Oyvada only expanded modestly year over year as a result of incremental cost related to our strong commercial activity, including the net impact of equipment sales.
Speaker Change: All three business lines contributed to the positive top-line performance with the main driver of organic growth being mobile revenue Which was 8% higher year-over-year on a rebase basis Sequentially our growth was impacted by fixed ARPU pressure and lower mobile equipment sales
Speaker Change: Adjusted OEBDA only expanded modestly year-over-year as a result of incremental costs related to our strong commercial activity, including the net impact of equipment sales.
Christopher Noyes: Moving to slide 16, I will present a detailed review of our financial performance in Puerto Rico. Revenue for Q2 was $309 million, representing a sequential decline of $18 million from the $327 million reported in Q1. The decline is due to residential mobile subscriber losses and the loss of ECF subs previously mentioned. In H2, we expect to stabilize the mobile subscriber base as we move past the operational issues in our new platforms and then start to gain momentum to the launch of new offers. Our direct cost and op-ex for Q2 of $238 million continues to be impacted by a number of migration-related items that we expect will largely drop off during H2.
Speaker Change: In H2, we expect to stabilize the mobile subscriber base as we move past the operational issues in our new platforms, and then start to gain momentum to the launch of new offers.
Speaker Change: Our direct costs and OPEX for Q2 of $238 million continues to be impacted by a number of migration related items that we expect will largely drop off during H2.
Christopher Noyes: Q2 includes incremental bad debt of $12 million driven by billing and collection issues on our new systems, as well as the decision to not pursue collections on historic buildings for certain customers that experienced migration issues. We expect bad debt to return to a more normalized level by the end of the year. We incurred approximately $9 million of TSA costs in Q2, which will drop off significantly in Q3 and will be negligible by the end of the year. And we incur $3 million of integration op-ex in Q2, as well as inventory impacts associated with the migration of $4 million during the quarter.
Speaker Change: We expect that debt to return to a more normalized level by the end of the year. We incurred approximately nine million dollars of TSA costs in Q2, which will drop off significantly in Q3 and will be negligible by the end of the year.
Christopher Noyes: And we incurred $3 million of integration OPEX in Q2, as well as inventory impacts associated with the migration of $4 million during the quarter. These costs should largely drop off by year-end. Finally, we expect to generate significant additional OPEC savings in H2 from the initiatives that started in Q2 and that will continue for the rest of the year. With all of this in mind, we are still targeting to reach $45 million in monthly adjusted OEBDA at some point in the back half of H2. Subsequent to quarter end, we purchased and canceled the remaining $140 million of outstanding convertible notes due July 2024. As a result, substantially all of our debt is due in 2027 and beyond.
Christopher Noyes: These costs should largely drop off by year end. Finally, we expect to generate significant additional op-ex savings to H2 from the initiatives that started in Q2 and that will continue for the rest of the year. With all of this in mind, we are still targeting to reach $45 million in monthly adjusted wave of dot at some point in the back half of each. 32.
Speaker Change: Finally, we expect to generate significant additional OPEC savings in H2 from the initiatives that started in Q2 and that will continue for the rest of the year. With all of this in mind, we are still targeting to reach $45 million in monthly adjusted OEBDA at some point in the back half of H2.
Christopher Noyes: Turning to slide 17, at the end of Q2 on a consolidated basis, we had $8.1 billion of total debt, $600 million cash, and $800 million of availability under our revolving credit lines. We had gross leverage of 5.3 times, and that leverage of 4.9 times, and a modest increase from Q1. Leverage levels should trend down towards year-end as adjusted at way but dot expands. Q2 was an active quarter in terms of actively related activities. We repurchased $22 million of stock, increasing our year-to-day total to $83 million, in addition to open market buybacks. We also entered into a derivative cap call arrangement.
Speaker Change: Turning to slide 17, at the end of Q2 on a consolidated basis, we had $8.1 billion of total debt, $600 million of cash, and $800 million of availability under our revolving credit lines.
Christopher Noyes: The highlight of this arrangement is that it provides us with a leverage strategy to repurchase upwards of $6 million shares, or 3% of LLA in H2 2025 at attracted prices. Subsequent to quarter, we purchased and cancelled the remaining $140 million about standing convertible notes due to July 2024. As a result, substantially all of our debt is due in 2027 and beyond.
Speaker Change: The highlight of this arrangement is that it provides us with a leveraged strategy to repurchase upwards of 6 million shares or 3% of LLA in H2 2025 at attractive prices.
Speaker Change: Subsequent to quarter end, we purchased and canceled the remaining $140 million of outstanding convertible notes due July 2024. As a result, substantially all of our debt is due in 2027 and beyond.
Christopher Noyes: Managing risk is a critical component of our treasury function. We utilized whether derivatives triggered off of cap 3 to cap 5 wind speeds to provide us with recovery to the extent that we experience significant net cat hurricane events. Payouts are defined in advance based on established values and wind speed, as well as the hurricane path. With respect to Hurricane Barrel, our parametric weather derivative program was triggered twice, and as a result, we expect to receive $44 million of net proceeds into LLA during Q3. We still have a sizable protection for C&W and Puerto Rico for the remaining storm season.
Christopher Noyes: Managing risk is a critical component of our treasury function. We utilize weather derivatives triggered off of Cat 3 to Cat 5 wind speeds to provide us with recovery to the extent that we experience significant Nat Cat hurricane events. Payouts are defined in advance based on established values and wind speed, as well as the hurricane path. With respect to Hurricane Beryl, our parametric weather derivative program was triggered twice, and as a result, we expect to receive $44 million of net proceeds into LLA during Q3.
Speaker Change: Managing risk is a critical component of our Treasury function. We utilize weather derivatives triggered off of Cat 3 to Cat 5 wind speeds to provide us with recovery to the extent that we experience significant Nat Cat hurricane events.
Speaker Change: With respect to Hurricane Beryl, our parametric weather derivative program was triggered twice and as a result we expect to receive 44 million dollars of net proceeds into LLA during Q3.
Christopher Noyes: We still have sizable protection for CNW and Puerto Rico for the remaining storms. Outside of Puerto Rico, our businesses in Panama, Costa Rica, and the Caribbean have performed very well, both operationally and financially. Thank you, V.
Balan Nair: To wrap up our prepared comments, we are making progress operationally, as seen today, but we still have work to do in Puerto Rico in order to return to BAU. LLA did grow revenue adjusted OIBIDA sequentially to Q1, but in Puerto Rico, we are probably three months behind of where we thought we would be at this time, and as delays and challenges in our operational systems hindered us. We have made good progress of late and are on track to see enhanced financial improvement in H2, especially Q4. Outside of Puerto Rico, our businesses in Panama, Costa Rica, and the Caribbean have performed very well both operationally and financially.
Speaker Change: To wrap up our prepared comments, we are making progress operationally as seen today, but we still have work to do in Puerto Rico in order to return to BAU.
Speaker Change: LLA did grow revenue and adjusted OEBDAS sequentially to Q1, but in Puerto Rico we were probably three months behind of where we thought we would be at this time as delays and challenges in our operational systems hindered us.
Speaker Change: Outside of Puerto Rico, our businesses in Panama, Costa Rica, and Caribbean have performed very well both operationally and financially.
Balan Nair: A call out to our Panamanian operation as the team capitalized on the exit by the third player, dramatically expanding its mobile subscriber base during the second quarter. We knew that 2024 was a tell of two halves, and then H2 would be the line share of our financial performance; that remains true to the state. We are focused on returning Puerto Rico to growth, driving fixed and mobile volumes across LLA, doubling down on cost takeouts across the group, and recovering from Hurricane Barrel. Within the Caribbean, Hurricane Barrel will impact our Q3 results, but it's temporary. In the last month, we have been quick to recover.
Speaker Change: A call out to our Panamanian operation as the team capitalized on the exit by the third player, dramatically expanding its mobile subscriber base during the second quarter.
Speaker Change: That remains true to this day. We are focused on returning Puerto Rico to growth, driving fixed and mobile volumes across L.A., doubling down on cost takeouts across the group, and recovering from Hurricane Beryl.
Speaker Change: Within the Caribbean, Hurricane Beryl will impact our Q3 results, but it's temporary. In the last month, we have been quick to recover. We anticipate the cash impact will be covered by the payout under our parametric program, and we are optimistic that we'll come out stronger in the affected markets in terms of network quality and ultimately market share.
Balan Nair: We anticipate the cash impact will be covered by the payout under our parametric program. And we are optimistic that we will come out stronger in the affected markets in terms of network quality and ultimately market share.
Balan Nair: In terms of capital allocation and MNA, we have been busy this year, significant equity repurchases equating to 12 million shares, or about 6% of LLA, and what we think are really attractive levels, and also entered into a driven transaction for another 6 million shares. In July, we also repaid the remaining amount due under our convertible bond. With respect to MNA, we announced the acquisition of Tigo's fixed business in Costa Rica in July, and we are on the home stretch of closing on the Dish, Boost, and spectrum transaction for Puerto Rico. Both of these transactions should improve our ability to serve our customers and drive incremental growth and value.
Speaker Change: In terms of capital allocation and M&A, we have been busy this year. Significant equity repurchases equating to 12 million shares or about 6% of LLA at what we think are really attractive levels and also entered into a derivative transaction for another 6 million shares.
Speaker Change: In July , we also repaid the remaining amount due under our convertible bond. With respect to M&A, we announced the acquisition of Tego's Fixed Business in Costa Rica in July , and we are on the homestretch of closing on the DISH Boost Inspectum transaction for Puerto Rico.
Operator: With that operator, please open it up for questions.
Operator: Thank you.
Operator: The question and answer session will be conducted electronically. If you would like to ask a question regarding the company's operations, please do so by pressing star one to ask a question or star zero for operator assistance.
Speaker Change: Thank you. The question and answer session will be conducted electronically. If you would like to ask a question regarding the company's operations, please do so by pressing star one to ask a question.
Operator: In order to accommodate everyone, we request that you ask only one question, with one follow-up if needed. If you are using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment. We'll pause for just a moment to give everyone an opportunity to signal for questions.
Unknown Executive: We'll pause for just a moment to give everyone an opportunity to signal for questions. Our first question today is from the line of Vitor Tomita of Goldman Sachs. Please go ahead. Your line is now open.
Michael Rollins: How first question today is from the line of it's automata of Goldman Sachs. Please go ahead. Your line is now open.
Michael Rollins: Hello, good morning all, and thank you very much for taking our questions. We have two from our side. The first of both of them would be on Puerto Rico. The first one is if you could give us some more color on the retention discounts that you applied to ACP subscribers. Mainly if those discounts affected revenues only starting in June, if they were applied to the entire ACP base or it was more of a percentage of it. If you see risk of potential churn or bad debt issues going into Q3, particularly on non-discounted subscribers if there are any.
Vitor Tomita: Hello, good morning, all, and thank you very much for taking our questions. We have two from our side. The first, both of them would be in Puerto Rico. The first one is if you could give us some more color on the retention discounts that you applied to ACP subscribers, mainly if those discounts affected revenues only starting in June, if they were applied to the entire ACP days or to a smaller percentage of it, and if you see risk of potential churn or bad debt issues going into Q3, particularly on non-discounted subscribers, if there are any.
Speaker Change: Mainly, if those discounts affected revenues only starting in June , if they were applied to the entire ACP days or a smaller percentage of it.
Vitor Tomita: The second question from our side would be on Puerto Rico. If you could go into a bit more detail on the drivers for the further EBITDA improvement in Puerto Rico that you expect in the second half of the year, basically how much of that improvement will depend on cost cuts versus expected revenue improvement there. Thank you very much.
Michael Rollins: The second question from our side would be also in Puerto Rico. If you could go into a bit more detail on the drivers for the further EBDA improvement in Puerto Rico that you expect in the second half of the year. Basically, how much of that improvement will depend on cost cuts versus expected revenue improvement in there. Thank you very much.
Balan Nair: Good morning, and thank you for your question, and I'll ask Eduardo to also jump in here. On the ACP, we have roughly about 85,000 subscribers in about 3,000 mobile, so very low exposure mobile. We've been able to retain the bulk of it, more than 97%. I think the effective discount, and Eduardo, you can jump in here, I think, was about $14 with the effective discount that we provided. Let me put it different way. The subsidy was about 30 bucks, and now our effective subsidy was about 14 bucks. So you're close to 14, 15 bucks, 15 bucks on the effective discount, but we've been able to retain the bulk of our customers on ACP.
Balan Nair: Good morning, and thank you for your question. And I'll ask Eduardo to also jump in here.
Balan Nair: On the ACP, we have roughly about 85,000 subscribers on FIX and about 3,000 on mobile, so very low exposure on mobile. On FIX, we've been able to retain the bulk of it, more than 90 percent. I think the effective discount, and Eduardo, you can jump in here, I think it was about $14 was the effective discount that we provided. Let me put it another way. The subsidy was about $30, and our effective subsidy was about $14 on HVP.
Speaker Change: Eduardo, you can jump in here. I think it was about $14 was the effective discount that we provided. Let me put it a different way. The subsidy was about $30 and our effective subsidy was about $14.
Balan Nair: Now, there's another group of customers, and this particularly hits mobile in another program called EGF. On the EBITDA side, you know, we actually quite, you know, quite bullish on our outlook when we got it to the 45 million to its the year on a monthly basis or a bit, a whole bunch of one-off cars that don't recur again. And then it's, you know, a couple of additional drivers of. Andres Ituarte, Naji Khoury, Matt Read, Eduardo Corona, Ray Collins, Gabriel Lima, Daniel Neiva, Rocio Lorenzo, Liberty Global PLC, Andres Ituarte, Naji Khoury, Matt Read, Eduardo Corona, Ray Collins, Gabriel Lima, Daniel Neiva, Rocio Lorenzo, Liberty Global PLC, And finally, we will be launching our new campaigns and launch, it's going to drive additional gross ads, it will have a slight impact on our opex because customer acquisition, will drive revenue and top line and bottom line as well into the fourth quarter, which is kind of why we've kind of pushed 45 million towards the end of the year, because there is some slight additional costs in customer acquisition as well. But that's how the ladder builds back into the 45 million.
Balan Nair: Now there's another group of customers in this particularly hit mobile in another program called ETF where we actually have kind of like a little dongle for our customers. It's a very low ARP on that, and that was what really impacted our operating numbers. That disconnect on the ECF sign, and you see that manifests itself in the post paid numbers.
Speaker Change: on H-E-P. Now, there's another group of customers, and this particularly hits mobile, and it's another program called EGF.
Speaker Change: kind of like a little dongle for our customers. It's a very low ARPU on that. And that was what really impacted our operating numbers with that disconnect on the ETF side. And you see that manifest itself in the postpaid numbers.
Balan Nair: On the EBITDA side, you know we're actually quite, you know, quite bullish on our outlook when we get it to the 45 million to the end of the year on a monthly basis for EBITDA. There's a number of drivers around that specifically, of course, the DSC drop out. We have a whole bunch of one-off cars that don't recur again. And then it's, you know, a couple of additional drivers of recovery here. One of it is cost account.
Speaker Change: On the evidence side, you know, we actually quite, you know,
Speaker Change: Quite bullish on our outlook when we got it to the $45 million towards the end of the year on a monthly basis.
Speaker Change: We have a whole bunch of one-off cards that don't recur again. And then it's, you know, a couple of additional drivers of...
Balan Nair: And as you, as we probably, you know, I don't know if you recall, we said that we were taking out about 300 headcount in Puerto Rico, which we've effectively completed. And in addition to that, there's a number of line items that we've been looking at, both on the cost of goods sold and the actual effects line that we feel that we are very well on a way to take those costs out. So those would add into our monthly orbit up.
Balan Nair: And then finally, we will be launching our new campaigns. And after the campaign launch, it's going to drive additional gross ads. It will have a slight impact on our effects because customer acquisition, but it will drive revenue and top line and bottom line as well into the fourth quarter, which is kind of why we've kind of pushed 45 million to the end of the year because they have some slight additional cost in customer acquisition as well. But that's how the ladder builds back into the 45 million.
Speaker Change: But it will drive revenue and top line and bottom line as well into the fourth quarter.
Speaker Change: which is kind of why we've kind of pushed 45 million towards the end of the year because there is some slight additional cost in customer acquisition as well, but that's how the ladder builds back into the 45 million.
Eduardo Corona: Eduardo, you want to give a little bit more color on the ACP. And maybe if you have, if you want to share some, allow me to. Of course, of course, thank you.
Speaker Change: Eduardo, you want to give a little bit more color on the ACP and maybe if you have, if you want to share thoughts on OEBDA?
Eduardo Corona: Good morning. Thank you for your question. You know, we believe that the results on ACP at the end of the program were quite successful. We were able to retain over 92% of the base. And when we think about the impact overall of that base, the ARPA reduction overall is only about 4%. There are some discounts that we did mostly on retention, as Vannon mentioned, on some customers that were probably in more, more, let me call it dire circumstances to continue with the service. But in general, the impact on the ARPA was also coming from customers downgrading their plans given the fact that the subsidy finished.
Balan Nair: And when we think about the impact overall of that base, the ARPU reduction overall is only about 4%. There are some discounts that we did, mostly for retention, as Balan mentioned, on some customers that were probably in more, let me call it dire circumstances, to continue with the service. But in general, the impact on the ARPU is also coming from customers downgrading their plans given the fact that the subsidy has finished. And so you have both combinations, if you will, some retention offers with discounts and customers downgrading their services to be able to meet their budget needs.
Eduardo: The fact that the subsidy
Eduardo Corona: And so you have both combinations: if you will, some retention offers with discounts and customers downgrading their services to be able to meet their budget needs. But overall, overall, I would say very successful. And, and in the case of mobile, the very small number. And, and we were able to retain most of those customers as well.
Eduardo: finished. And so you have both combinations, if you will, some retention offers with discounts, and customers downgrading their services to be able to meet their budget needs. But overall, I would say very successful.
Balan Nair: But overall, I would say very successful. And in the case of mobile, a very small number, and we were able to retain most of those customers as well. So that would be ACP. In terms of Invita improvements, I mean, certainly, we're looking to extract all the opportunities that the integration of both our mobile operations and fixed operations can give us to become really a convergent company.
Speaker Change: and in the case of mobile, a very small number and we were able to retain most of those customers as well.
Eduardo Corona: So, so that would be on, on ACP in terms of the time improvements. I mean, certainly we're looking to, to, to, to, to extract all the opportunities that the integration of both our mobile operations and fixed operations can give us to become really a convergent company. And, and the teams are working extremely hard. I think that that in terms of sales, the last couple of months have shown very, very good traction. Not necessarily where we wanted to go, but I think that that that that that we're starting to see the improvements now that we control our systems and therefore are able to build our offers.
Speaker Change: So, that would be on ACP. In terms of EBITDA improvements, I mean, certainly we're looking to extract all the opportunities that the integration of both our mobile operations and fixed operations can give us to become really a convergent company.
Speaker Change: and the teams are working extremely hard I think that that in terms of sales the last couple months have shown very very good traction
Eduardo Corona: And, and, and certainly leverage our base, both on the fixed and mobile sides, to create cross-selling options. Thank you.
Eduardo Corona: I hope that gives you a better color.
Eduardo Corona: Thank you, Eduardo. That's very good. Thank you.
Matthew Harrigan: Thank you very much. How next question today is from the line of Michael Rollins of Citigroup. Please go ahead. Your line is now open.
Speaker Change: Thank you, Eduardo. That's very good. Thank you. Thank you very much.
Matthew Harrigan: Thanks, and good morning. Just following up on Puerto Rico.
Matthew Harrigan: So, if you take the expectation to get to a monthly run rate of $45 million, does that put the 2025 EBITDA contribution for Puerto Rico at roughly $540 million? And it's not. What would be the variances? Thanks. Sure.
Unknown Executive: patient to get to a monthly run rate. $45 million; does that put the 2025 EBITDA contribution for Puerto Rico at roughly $540 million? And if not, what would be the variance?
Balan Nair: Well, you know, I want to straight line the number. Here's how I'd look at it: you know, in the big part of our business is always about opening balances. And it's opening balances, the monthly level at the quarterly level. And certainly, as we build our 25 budget, it would be the opening balance in December, going into January. Our goal is to get to the 45 million by the end of this year in the last couple of months. And then we'll have going into 25 and opening balance of both subscribers and fixed and post paid as well as where B2B trajectory.
Speaker Change: Thanks.
Speaker Change: Sure.
Speaker Change: Well, you know, I wouldn't straight line the number, just how I look at it, you know, and the big part of our business is always about opening balances, and it's opening balances at the monthly level, at the quarterly level, and certainly if we build a 25 budget, it would be the opening balance in December going to January .
Unknown Executive: Thanks.
Speaker Change: Our goal is to get to the 45 million by the end of this year, in the last couple of months. And then we'll have, going into 2025, an opening balance of both subscribers and fixed and postpaid, as well as where our B2B trajectory. I expect...
Unknown Executive: Sure. But, you know, I wouldn't straight line the number. Here's how I'd look at it. You know, and the big part of our business is always about opening balances and opening balances at the monthly level, at the quarterly level. And certainly, if we build a 25 budget, it would be the opening balance in December going into January. Our goal is to get to 45 million by the end of this year, in the last couple of months, and then we'll have an opening balance of both subscribers and fixed and postpaid, as well as a rare B2B trajectory.
Balan Nair: I expect that to not be 45 every month for the year 25. So, you'll start seeing growth coming in. And as the year progresses, since we add net ads, the first quarter net ads will certainly drive the second, third, and fourth quarter. And then the second quarter net ads, third and fourth. So, I suspect by the end of 25. Just shoot me if you're still at 45 million. It's, it's, it's going to be a better number. So, and then you can just figure out.
Unknown Executive: I expect. So you'll start seeing growth coming in, and as the year progresses, as we add net ads, the first quarter net ads will certainly drive the second, third, and fourth quarter, and then the second quarter net ads. Just shoot me if we're still at 45 million. It's going to be a better night.
Speaker Change: So you'll start seeing growth coming in, and as the year progresses, as we add net ads, the first quarter net ads will certainly drive the second, third, and fourth quarter, and then the second quarter net ads, third and fourth. So I suspect by the end of 2025,
Speaker Change: Just shoot me if we're still at 45 million. It's going to be a better number.
Unknown Executive: So, and then you can just figure out, you know, want to model the AVID Airflow-25.
Balan Nair: So, you know, I want to model the David of 25.
Balan Nair: And as you look at the broader portfolio, this 2025 mark the year where you expect rebased revenue growth for the entirety of the portfolio.
Speaker Change: And as you look at the broader portfolio, there's 20, 25.
Unknown Executive: the year where you'd expect revenue growth for the entirety of the portfolio to be positive for the year, or is there still just... significant variability between markets and products where it's just harder to assess when you get to that sustainable revenue growth level? Thanks.
Balan Nair: To be positive for the year, or are there still just significant variability between markets and products where it's just harder to assess when you get to that sustainable rebased revenue growth level. Thanks. Okay. There will be revenue growth positive in 25. That's a given.
Speaker Change: to be positive for the year, or are there still just...
Speaker Change: It's just harder to assess when you get to that sustainable.
Speaker Change: Rebates, Revenue, Growth.
Unknown Executive: There will be revenue growth positive in 25. That's a given.
Speaker Change: there will be revenue growth positive in 25. That's a given and let me explain why I feel so confident of it.
Unknown Executive: And let me explain why I feel so confident. I'll stop it. You know, we have essentially five segments. A Kibble in Wireless.
Balan Nair: And let me explain why I feel so confident of it. I'll stop it up. You know, we have essentially five segments here. A Cable and Wireless Caribbean business. We spent a lot of years rebuilding that platform. Building not only a great team supporting that platform, but also an infrastructure and a product base. So, for the most part, we've eliminated most of all a twisted pair of copper by 25. It actually by the first second quarter, 25. There will be no more copper, but we no longer relying on that. So, you don't have any headwinds there on copper.
Speaker Change: I'll stop it there. You know, we have essentially five segments here.
Unknown Executive: Caribbean Business. We've spent a lot of years rebuilding that platform, building not only a great team supporting that platform, but also an infrastructure and a product base. So for the most part, for Price Increase, very high probabilities of success.
Speaker Change: A cable and wireless.
Speaker Change: Caribbean business. We've spent a lot of years rebuilding that platform, building not only a great team supporting that platform, but also an infrastructure and a product base. So for the most part
Speaker Change: eliminated most of all a twisted pair of copper by 25 actually by the first second quarter 25 there will be no more copper but we no longer relying on that
Balan Nair: It's a droply market. and we continue to grow both aspects, post-paid mobile as well. And we think for sure, between all of the competitors in that market, wherever we are facing, I think for sure that's going to be drivers for price increases in our products next year. So you've got the great network, great products, and very high probabilities of price increases.
Speaker Change: So you don't have any headwinds there on copper, it's a wobbly market.
Speaker Change: Drivers for price increases
Balan Nair: Then you move to our Panama business. We've also rebuilt that business quite, quite a bit, and you see the tremendous growth this year. With our management team and our new management team in Panama very focused not only in the top line growth but the efficiency of the business. You'll see top line growth and expansion in the OSCEF margin in that business, and that's clear. State we are investing in the network; almost all of it's now fiber and very new HFC. We are 5G in that network. It's one of our best mobile networks as well, and clearly we will be back in the front driver's seat.
Unknown Executive: Then you move to our Panama business. We've also rebuilt that business quite, quite a bit. And you see the tremendous growth this year. And with our management team and our new management team in Panama, very focused not only on the top line growth but the efficiency of the business, top line growth, and expansion in the OFCF margin in that business. 5G Indepth Network.
Speaker Change: and very high probabilities of price increases.
Speaker Change: Then you move to our Panama business.
Speaker Change: We've also rebuilt that business quite a bit, and you see the tremendous growth this year. And with our management team and our new management team in Panama, very focused not only on the top line growth, but the efficiency of the business.
Speaker Change: you'll see top line growth and expansion in the OFCF margin in that business.
Speaker Change: And that's Clear State. We are investing in the network, almost all of it now, fiber and very new HFC. We have 5G in that network.
Speaker Change: It's one of our best mobile networks as well, and clearly, we will be back in the front driver's seat. We are already the leader in mobile, and we're doing a very good job as an attacker on the fixed side.
Balan Nair: We are already the leader in mobile, and we are doing a very good job as an attacker on the market. There's a fixed sign, and our general manager there, together with the team, has been really focused not only on the top line but on as well on the operations and the platform.
Speaker Change: And our general manager there, together with the team, has been really focused not only on the top line, but on, as well, on the operations and the planning.
Balan Nair: Then you look at Costa Rica with our current trend; you know, the deal that we just announced is going to bring market consolidation. But even pre-market consolidation, we are investing also invested in our mobile networks and our fixed networks. We are building fiber rapidly that and and our HFC network day is very strong. So you'll see us doing really well. We are already today doing well in mobile and fixed, and our general manager there and the leadership team are also focused on the platform.
Unknown Executive: Then you look at Costa Rica with our current trend, you know, the deal that we just announced, we're going to bring market consolidation, but even pre-market consolidation, we are investing in our mobile networks and our fixed networks. We are building fiber rapidly there, and our HFC network there is very strong. You'll see us doing really well. We are already doing well in mobile and fixed. And our general manager there and the leadership team are also focused on the. Then you look at a Liberty Network subsea business.
Speaker Change: Then you look at Costa Rica, with our current trend, you know, the deal that we just announced, we're going to bring market consolidation. But even pre-market consolidation, we are investing, also have invested in our mobile networks and our fixed networks. We are building fiber rapidly there.
Speaker Change: And our HSE network there is very strong.
Balan Nair: Then you look at our Liberty Networks, our subsea business. Our subsea business has been going through a number of changes, and our general manager then, together with the new leadership team, has been very focused on getting more from it NRR and non-recurring revenue model to an MRR monthly recurring revenue model. So you're seeing the subscription model grow, and what you see in your numbers is to be reported in the second quarter is just some of the washing out of some of the old IRUs where we've collected the cash. It's just an accounting treatment on both revenue and OCF.
Unknown Executive: All subsea business. Andres Ituarte, Naji Khoury, Matt Read, Eduardo Corona, Ray Collins, Gabriel Lima, Daniel, Puerto Rico 2024. The first half is all about doing the migrations and cleaning up the aftereffects of migration. The third quarter and the fourth quarter. The third quarter is all about rebuilding the story, relaunching the brand, getting our new propositions on our new network and our new IT system. And then you start harvesting the beginnings of it in the fourth quarter, is really committed.
Speaker Change: Then you look at Liberty Networks, our subsea business. Our subsea business...
Dan: been going through a number of changes. And our general manager, Dan, together with the new leadership team, has been very focused on getting more from it NRR and non-recurring revenue.
Dan: model to an MRR, a monthly recurring revenue model. So you're seeing the subscription model grow. And what you see in your numbers as we report in the second quarter is just some of the
Dan: The washing out of some of the old IRUs where we've collected the cash, it's just an accounting treatment on both revenue and OCF. It always gets reversed back at the working capital level. So we have been cleaning that up and you'll see the year over year starting next year.
Balan Nair: It always gets reverse back at the working capital level. So we have been cleaning that up, and you'll see the year over here starting next year to be not dependent on IRUs, and it's mostly going to be driven on monthly recurring revenue real growth. And as we reported today, the enterprise business double-digit growth and that's all and mostly all MRRs. And our subsea networks we announced the last time as well, we're building new routes, and we're really excited about that platform.
Dan: And now, Subsea Network, as we announced the last time as well, we're building new routes and we're really excited about that platform. So now I've covered you four platforms that we are really bullish on. And then let's go back to Puerto Rico.
Balan Nair: So now I've covered you four platforms that we are really bullish on.
Balan Nair: Then let's go back to Puerto Rico. Puerto Rico 2024, the first half is all about doing the migrations and cleaning up the after effects of migrations. The third quarter and the fourth quarter, third quarter is all about rebuilding the story, relaunching the brand, getting our new propositions on our new network and our new IT systems. And then you start harvesting the beginnings of it in the fourth quarter. And then in 2025, you're off to the rate system. We're going to put up some big numbers in Puerto Rico. Of course, year over year, it's going to be big numbers given the challenges this year.
Dan: Puerto Rico 2024, the first half is all about doing the migrations and cleaning up the aftereffects of migrations.
Dan: The third quarter and the fourth quarter, third quarter is all about rebuilding the story, relaunching the brand, getting our new propositions on our new network and our new IT system.
Speaker Change: Unknown Executive, Matt Read, Balan Nair, Daniel Neiva
Balan Nair: But it's also going to be good numbers in 2025. It's got a great management team there. It's really committed. So, in all of our markets, it's invested in the networks, in the systems, and in the people. And I think we've got a great platform. And if it weren't for the migration that we were doing this year in Puerto Rico, you can clearly see we'll be putting up double-digit growth this year. I mean, this is this is a great platform. So all we are seeing right now is just a bump in the first half of the year and the third quarter's rebuilding and the fourth quarter's selling.
Speaker Change: but it's also going to be good numbers in 2025. We've got a great management team there.
Unknown Executive: So in all of our markets, we've invested in the networks, in the systems, and in the people. And I think we've got a great platform. And if it weren't for the migration that we were doing this year in Puerto Rico, you can clearly see we'd be putting up double-digit growth this year. I mean, this is a great platform. So all we are seeing right now is just a bump in the first half of the year, and then the third quarter is rebuilding, and then the fourth quarter is selling. And then you build on that momentum into... Hopefully, that was helpful, Michael.
Speaker Change: And it's really committed. So in all of our markets, we've invested in the networks, in the systems.
Speaker Change: I mean, this is a great platform. So all we are seeing right now is just a bump in the first half of the year, and then third quarter's rebuilding, and then fourth quarter's selling. And then you build into that momentum into 2025.
Balan Nair: And then you're building to that momentum in 2025. Hopefully, that was helpful, Michael.
Speaker Change: Hopefully that was helpful, Michael.
Matthew Harrigan: Thank you. How next question today is from the line of Matthew Harrigan of Benchmark Company. Please go ahead. Now your line is open.
Matthew Harrigan: Our next question today is from the line of Matthew Harrigan of Benchmark Company. Please go ahead now. Your line is open.
Michael: Thank you.
Michael: Our next question today is from the line of Matthew Harrigan of Benchmark Company. Please go ahead now, your line is open.
Matthew Harrigan: Thank you. It's going to go up the Puerto Rico 540 question as well. But beyond that, the fair amount of level 4 data center activity. I think particularly in here. There's now and some high up with Taylor seems pretty active and particularly clear to me and I think more than some whole America. Is there a tailwind there, you know, if you're a network business off that?
Matthew Harrigan: Thank you. I was going to go up to the Puerto Rico 540 question as well, but beyond that... A fair amount of level four data center activity, I think particularly in Curacao, and some hyperscalers seem pretty active in the Caribbean, I think more so than Central America. Is there a tailwind there for your network business from that? And then secondly, very broadly, clearly, you don't have any direct exposure to Venezuela, but is there anything on the political or regulatory side that gives you pause or creates opportunities across your markets? And they're fairly open ended. Thanks and congratulations on the results.
Matthew Harrigan: Thank you. It's going to go up to Puerto Rico 540 question as well, but beyond that.
Speaker Change: A fair amount of Level 4 data center activity, I think, particularly in CuraƧao and some hyperscalers.
Speaker Change: Is there a tailwind there, you know, from your network business off that? And then secondly, very broadly, clearly you don't have any direct exposure to Venezuela, but is there anything on the political or regulatory side that gives you pause or creates...
Matthew Harrigan: And then secondly, very broadly, clearly, you don't have any direct exposure to Venezuela. But is there anything on the political regulatory side that is deposit, create opportunities across your markets?
Speaker Change: opportunities across your markets and they're fairly open-ended. Thanks and congratulations on the results.
Balan Nair: Thank you, Matt. And I'll ask Ray Collins to also jump in here in a bit on the data center. On the data center business, you know, we have a number of data centers. Actually, we do have a data center in Curacao, which we support for internally and external customers as well. It's a great island. It's, it's an island that's really very, very, very rarely and I touch with you impacted by hurricane. It's a great location for us to build our data center. And we've been building also micro data centers for specific customers in a number of markets.
Balan Nair: Thank you, Matt. And I'll ask Ray Collins to also jump in here a bit on the data center. Ray. On the data center business, you know, we have a number of data centers. Actually, we do have a data center in Curacao, which we support internally and external customers as well. It's a great island.
Balan Nair: It's, it's, it's an island that's really, Rarely, very, very rarely, and I touch wood here, impacted by hurricanes, a good location for us to build our data centers. And we've been building also micro data centers for specific customers in a number of markets. Think, you know, as we look at the data center business, the three areas that are really good opportunities for us are Panama, Speaker, and
Balan Nair: But I think, you know, as we look at the data center business, the three areas that could be real good opportunities for us are Panama, Costa Rica, and Mexico. As you know, we're building fiber going into Cancun area and Quintero, in Mexico, where the data center business has been growing. So we are building connectivity into that. And then, of course, you look at Panama and Costa Rica. They're both countries where the Chips Act has a flow of money. And you can see Intel building plans in Costa Rica. So we are also focus very for hyper focus on that.
Balan Nair: And Mexico, as you know, we have fiber going into the Cancun area and Quintero in Mexico, where we, the data center business, have been growing. So we are building connectivity into that. Of course, you look at Panama and Costa Rica. They're both countries where the CHIPS Act has brought in money, and you can see Intel building plants in Costa Rica. So we are also focused, very hyper-focused on that. And so on the data center business, that's kind of how we're looking at it, but you really have to have the contracts with the large hyperscalers for it to really, for you to really allocate a significant amount of capital.
Speaker Change: Costa Rica, and Mexico. In Mexico, as you know, we are building
Speaker Change: fiber going into Cancun area and Quintero in Mexico where we the data center business has been growing so we are building connectivity into that.
Balan Nair: And so on, the data center business, it's kind of how we're looking at, but you really have to have the contracts with the large hyperscalers to really, for you to really allocate a significant amount of capital in this space. And then on Venezuela, we follow every political change and challenge in our region. And we'll see how that plays out. And we have absolutely no plans right now to go into Venezuela, even though we have a good business in Venezuela without subsidy. We have really good customers, and they pay us. and US dollars, and we are very appreciative of that.
Balan Nair: And then on Venezuela, we follow every political change and challenge in our region, and we'll see how that plays out. And we have absolutely no plans right now to go into Venezuela, even though we have a good business in Venezuela with our subsea. We have really good customers there, they pay us in U.S. dollars, and we are very appreciative of that.
Speaker Change: And then on Venezuela, we follow every political change and challenge in our region, and we'll see how that plays out. And we have absolutely no plans right now to go into Venezuela, even though we have a good business in Venezuela with our subsea. We have really good customers there. They pay us.
Balan Nair: And we like that those businesses, if the world changes in the future, of course, Venezuela would be a great market at some point in the future when their political turmoil changes. The other market, of course, is Argentina as well. Once the political turmoil changes there, it could be a really good market. These are all dislocated markets. And clearly, Ray Collins from our M&A team, and Chris Noyes.
Balan Nair: And we like those businesses. If the world changes in the future, of course Venezuela would be a great market at some point in the future when their political turmoil changes. The other market, of course, is Argentina as well, wants the political turmoil changes there.
Speaker Change: and U.S. dollars, and we are very appreciative of that, and we like those businesses.
Speaker Change: If the world changes in the future, of course, Venezuela would be a great market at some point in the future when their political turmoil changes.
Balan Nair: It could be a really good market. These all dislocated markets and clearly Ray Collins from our M&A team, Chris Noyes, John Winter and myself, we look closely at all these markets. And when the time's right, we'll be very opportunistic; but right now I don't see it.
Speaker Change: The other market, of course, is Argentina as well. Once the political turmoil changes there, it could be a really good market. These are all dislocated markets and clearly Ray Collins from our M&A team, Chris Noyes.
Ray Collins: Ray? Yeah, just to add on the data center business, thanks, Balan. And we also provide data center to data center connectivity in our B2B business and in our networks business. And actually, one of the drivers of the new system, which we announced, is really connecting some little hyper scale data centers that we see, the build that you see in Corretero and Mexico. And where we're connecting from Veracruz back up to a new connectivity that will put into the Appalachia coast of Florida, connecting into Virginia and Georgia and then down to Columbia. So the new network that we've announced is really all about serving about hyper scale data center traffic.
Ray Collins: Yeah, just to add to the data center business, thanks, Balan. We also provide data center to data center connectivity in our B2B business and in our networks business. And actually, one of the drivers of the new system, which we announced, is really connecting some of the hyperscale data centers that we see, the build that you see in Queretaro, Mexico, where we're connecting from Veracruz back up to a new connectivity that we'll put on the Apalachee Coast in Florida, connecting into Virginia and Georgia and then down to Colombia.
Speaker Change: You ready?
Speaker Change: And actually one of the drivers of the new system which we announced is really connecting some of the hyperscale.
Ray Collins: So the new network that we've announced is really all about serving that hyperscale data center traffic. As Balan said, we don't have current plans to build data center cells for hyperscalers, but we see a strong tailwind from enabling and connecting the various deployments that we Thank you, Ray.
Ray Collins: As Balan said, we don't have current plans to build data center cells for hyper scaleers. But we have, you know, we see a strong tailwind from enabling and connecting the various deployments that we see in the region.
Ray Collins: Thank you, Ray.
Ray: Thank you, Ray.
Gabriel Vastilema: Thank you, and our next question today is from the line of Gabriel Vastilema of Morgan Stanley. Please go ahead. Your line is open.
Gabriel Vaz de Lima: Thank you. And our next question today is from the line of Gabriel Vaz de Lima of Morgan Stanley. Please go ahead. Your line is open.
Speaker Change: Thank you. And our next question today is from the line of Gabriel Vaz de Lima of Morgan Stanley . Please go ahead. Your line is open.
Gabriel Vastilema: Thank you very much.
Gabriel Vaz de Lima: Thank you very
Gabriel Vastilema: Just wanted to get a bit more color on the possible regions infected by the hurricane season this time around, like any kind of color you can provide to us in terms of what kind of impact. And how this could expect a lecture of businesses in Jamaica and the regions that were already infected. Okay, well, the hurricane, you know, barrel that went through has impacted three of our operations: Grenada, St. Vincent, and Jamaica. And in many cases, the biggest driver for challenges has been power outages; primarily, you know, if you look especially in Jamaica, where our customers went offline, not because another went down, but because of power.
Speaker Change: This time around, any kind of color you can provide to us in terms of what kind of impacts we should expect and how this could impact your businesses in Jamaica and the regions that were already impacted.
Balan Nair: Okay, well, the hurricane barrel that went through us impacted three of our operations, Grenada, St. Vincent, and Jamaica. And in many cases, the biggest driver of our challenges has been power outages. Specifically, you know, if you look, especially in Jamaica, customers went offline, not because the network went down, but because of power.
Balan Nair: You know, we have a significant number of towers in Jamaica; only about seven towers got damaged. And by the way, we did the deal with, if you recall from the last quarter with PTI, and PTI is responsible for rebuilding those. And so, from a mobile tower standpoint, we're good. From a fixed network standpoint, for the most part, our network withstood it.
Speaker Change: And in many cases, the biggest driver of our challenges have been our outages, primarily, you know, if you look, especially in Jamaica.
Speaker Change: where our customers went offline, not because the network went down, but because of power. You know, we have significant amount of towers in Jamaica.
Balan Nair: You know, we have a significant amount of towers in Jamaica, which only like seven towers got damaged. And by the way, we did the deal with, if you recall from the last quarter, with PTI, and PTI is responsible for rebuilding those towers. And so, you know, from a mobile tower standpoint, we good. From a fixed network standpoint, for the most part of network, which stood it. We have some network that we have to rebuild. And we're going to rebuild our backbone. It's about 170 kilometers of our backbone. We're going to underground the whole backbone. And that's built into our budget.
Balan Nair: We have some networks that we have to rebuild. And we're going to rebuild our backbone. It's about 170 kilometers of our backbone.
Balan Nair: We're going to underground the whole backbone. And that's built into our budget as well. Now, on one or two smaller islands, Karaku, the Union Islands of St. Vincent and Grenada, it was damaged significantly.
Speaker Change: Backbone, it's about 170 kilometers of our backbone. We're going to underground the whole backbone, and that's built into our budget as well. Now, in one or two smaller islands, Karuku, Union Islands of St. Vincent and Grenada.
Balan Nair: That's why. Now, in one or two smaller islands, car to Union Islands of St Vincent and Grenada, that it was damaged significantly. And we've gone back in there, rebuilt the mobile. And on the fixed side, we are using an alternative technology with fixed wireless access to get customers backup quickly. And that's well cost efficiently. And so, you know. When you look at this year's hurricane season, we got hit pretty early, but the team was resilient. We've rebuilt what we needed to rebuild. Some of the cost impacts that Chris alluded to was really around some credits that we will be giving back to our customers, because they didn't have our network service, and we'll give them some credits back, because they didn't have the service.
Balan Nair: And we've gone back in there, rebuilt the mobile, and on the fixed side, we are using an alternative technology with fixed wireless access to get customers back, and as well, cost-efficiently. So, you know...
Speaker Change: It was damaged significantly, and we've gone back in there, rebuilt the mobile, and on the fixed side, we are using an alternative technology with fixed wireless access to get customers back up.
Speaker Change: Quickly and as well cost-efficiently So, you know
Balan Nair: When you look at this year's hurricane season, we got hit pretty early, but resilient, we've rebuilt what we needed to rebuild some of the cost impacts that Chris alluded to, around some credits that we will be giving back to our customers because they didn't have power and didn't have our network service, and we'll give them some credits back if they didn't have the service. All in all, we feel really good. And by the way, our team did a tremendous job on the insurance, this parametric insurance, clearly delivered. And, as Chris pointed out, we've closed out with our brokers and the insurance consortium, and we will be paid for the damage. And it should have relatively a very little financial impact on us with this.
Speaker Change: was really around some credits that we will be giving back our customers because they didn't have power and didn't have our network service and we'll give them some credits back if they didn't have the service.
Balan Nair: All in all, we feel really good. And by the way, our team did a tremendous job on the insurance; this parametric insurance clearly delivered. And as Chris pointed out, we've closed out with brokers and insurance consortium, and we will be paid for the damage, and it should relatively have very little financial impact as with this hurricane.
Speaker Change: All in all we feel really good and by the way our team did a tremendous job on the insurance, this parametric insurance.
Speaker Change: Clearly...
Speaker Change: delivered. And, and as Chris pointed out, we've closed out with our brokers and the insurance consortium, and we will be paid for the damage. And it should relatively have very little financial impact to us with this hurricane.
Operator: Thank you, and this will conclude today's question and answer session.
Balan Nair: Thank you. And this will conclude today's question and answer session. I'd like to hand it back to Balan Nair for any closing remarks.
Balan Nair: I'd like to hand back to Balan Nair for any additional or closing remarks. Thank you, operator. And thank you, everybody, for joining us this morning. To concede, our business is moving, and we've got momentum behind us in all of our businesses. And I would say the same in Puerto Rico, and I hope to share with you in the third quarter some more positive data out of Puerto Rico. As Eduardo pointed out, and Chris pointed out, we've seen green shoots already; pre-paid businesses growing there, and that was the first group of customers we migrated, and already a lot of the systems, et cetera, it started to get better.
Balan Nair: Thank you, operator, and thank you, everybody, for joining us this morning. As you can see, our business is moving, and we've got momentum behind us, all of our businesses. And I would say the same in Puerto Rico. And I hope to share with you in the third quarter some more positive data from Puerto Rico. As Eduardo pointed out, and Chris pointed out, we've seen green shoots already, prepaid businesses growing there.
Speaker Change: Thank you, operator. And thank you, everybody, for joining us this morning. As you can see, you know, our business is moving, and we've got momentum behind us.
Speaker Change: in all of our businesses. And I would say the same in Puerto Rico. And I hope to share with you in the third quarter some more positives.
Balan Nair: And that was the first group of customers we migrated. And already, you know, a lot of the systems, etc., have started to get better. And as we look even at our customer sentiment, For all the new customers we've added, the what we call NPS, Net Promoter Scores of our customers have been extremely positive. It's actually one of the best in our whole company. And then for our existing customers, it's in two buckets; the ones that we migrated successfully and cleanly, and that's 80% of our customers; they are feeling good.
Speaker Change: A prepaid business is growing there, and that was the first group of customers we migrated. And already, you know, a lot of the systems, etc., have started to get better. And as we look even at our customer sentiment,
Balan Nair: And as we look at even at our customer sentiment, for all the new customers, we've added on what we call NPS, an F promoter's course of our customer has been extremely positive. It's actually one of the best in our whole company. And then for existing customers, it's in two buckets that wants to be migrated successfully, and that's 80% of our customers; they are feeling good. The 20% of customers that we had challenges in billing, of course, we need to rectify that, and we will. And you'll see some of that results in the third and fourth quarter of this year.
Speaker Change: for all the new customers to be vetted on the what we call NPS net promoter scores of our customers has been extremely positive. It's actually one of the best in our whole company. And then for existing customers, it's in two buckets, the ones that we migrated successfully and cleanly, and that's 80% of our customers.
Balan Nair: The 20% of customers that we had challenges with billing, of course, we need to rectify that, and we will see some of that results in the third and fourth quarters. I remain very bullish about our business, and I thank you so much for your support.
Speaker Change: They are feeling good. The 20% of customers that we had challenges in billing, of course we need to rectify that and we will.
Balan Nair: I remain very bullish about our business, and I thank you so much for your support.
Operator: Ladies and gentlemen, this concludes Liberty Latin America's second quarter, 2024 investical. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Latin America's website at www.lla.com. There, you can also find a copy of today's presentation materials. Music
Unknown Executive: Ladies and gentlemen, this concludes Liberty Latin America's second quarter 2024 investor call. As a reminder, a replay of the call will be available in the investor relations section of Liberty Latin America's website at www.lla.com. There you can also find a copy of today's presentation materials.
Speaker Change: There you can also find a copy of today's presentation materials.
Speaker Change: Christopher Noyes, Unknown Executive, Matt Read, Balan Nair, Daniel Neiva Christopher Noyes, Unknown Executive, Matt Read, Balan Nair, Daniel Neiva