Full Year 2024 Liberty Latin America Ltd Earnings Call
Your body and welcome to Liberty Latin America's full year 2024 investor call.
Speaker Change: At this time, all participants are in listen only mode.
Speaker Change: Today's formal presentation materials can be found under the Investor Relations section of Liberty Latin America's website at Www Dot LLS Dot com.
Balan Nair: Turning to slide 5. I'll begin our operating review with C&W Caribbean, where we delivered operating momentum in mobile postpaid and strong financial execution. Starting on the left of the slide with our subscriber adds. Full year 2024 broadband adds were negatively impacted by Hurricane Beryl, primarily in Jamaica. In Q3, we saw the immediate impact of the storm with 16,000 broadband losses, and in Q4, we lost a further 11,000 broadband RGUs, mainly related to the disconnection of non-paying customers. Adjusting for this event, we would have added 7,000 broadband subscribers in Q4 and 18,000 for the year. In mobile, our positive postpaid performance continued in Q4, with 43,000 net adds in 2024. Our postpaid base increased by 14% year over year, driven by Jamaica. Moving to the center of the slide and our revenue by product.
Speaker Change: Following today's formal presentation instructions will be given for a question and answer session.
Speaker Change: As a reminder, this call is being recorded.
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 fact.
Speaker Change: Actual results may differ materially from those expressed or implied by these statements.
Speaker Change: More information please refer to the risk factors discussed in Liberty Latin America's Most recently filed annual report on Form 10-K.
Speaker Change: Along with the associated press release.
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.
Good morning, ladies and gentlemen, and thank you for standing by.
Balan Nair: The pie chart depicts the well-diversified nature of C&W Caribbean's revenue with B2B and consumer fixed, the largest element, followed by consumer mobile. In our Caribbean market, the operating environment is constructive as we primarily compete in duopolies, where we are often the leading player. Rebase revenue grew 2% year over year, driven by double-digit growth in postpaid revenue and supported by successful price increases in fixed and mobile across our main markets. Overall, 2024 was a strong operational year for C&W Caribbean, with cost efficiencies driving nearly 200 basis points of margin expansion. As Chris will come onto, we expect operational leverage to continue to be a focus and driver of adjusted OIBDA growth in 2025. Moving to slide 6 and our C&W Panama segment. Starting on the left of the slide, we continued our broadband momentum in 2024, adding 23,000 subscribers, which was 10% higher year over year.
Speaker Change: Today's call is being recorded. I'll now turn the call over to Assad Nabi BP IT business partner Liberty Latin America.
Speaker Change: Which any such statement for information is best.
Speaker Change: Good morning and welcome to Liberty Latin America's full year 2024 investor call.
Speaker Change: In addition on this call we will refer to certain non-GAAP financial measures.
Speaker Change: At this time, all participants are in listen-only mode.
Speaker Change: Which are reconciled to the most comparable GAAP financial measures.
Speaker Change: These formal presentation materials can be found under the investor relations section of Liberty Latin America's website at www.LLA.com.
Speaker Change: Which can be found in the appendices to this presentation, which is accessible in the investor section of our website.
Speaker Change: Following today's formal presentation, instructions will be given for a question and answer session.
Mr. <unk>: I would now like to turn the call over to our CEO Mr. <unk>.
As a reminder, this call is being recorded.
Speaker Change: Thank you Chad and welcome everybody to Liberty Latin America's fourth quarter and year end 2020 for results presentation.
Speaker Change: Do these remarks may include forward-looking statements including the company's expectations with respect to its outlook.
Speaker Change: 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.
Speaker Change: And future growth prospects and other information and statements that are not historical fact.
Speaker Change: actual results may differ materially from those expressed or implied by these statements.
Speaker Change: As always I am joined by my executive team from across our operations and I will invite them to contribute as needed during the Q&A following our prepared remarks.
For more information, please refer to the risk factors discussed in Liberty Latin America's most recently filed annual report on Form 10K.
Balan Nair: We have been investing in our network, expanding and upgrading with FTTH home passings, and I'm pleased to say that only 2% of our footprint is now covered by copper, with most of this to be decommissioned by the end of this year. In mobile, we had a record year, reporting 78,000 postpaid adds, driven by our successful acquisition campaigns following the exit of a competitor, an increase in FMC penetration, and our focus on prepaid to postpaid migration. Moving to the center of the slide and our revenue streams, which in aggregate drove our top line 3% higher in the year. Growth was driven by mobile and fixed products, which were up by 7% and 4% respectively. Mobile growth benefited from a larger subscriber base and pricing actions we took throughout the year.
Speaker Change: Along with the associated press release.
Speaker Change: As a point of housekeeping, we will both be working from slides, which you can find on our website at www Dot LLE dot com.
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
Speaker Change: Starting with slide four and our highlights for the year.
Speaker Change: We grew our fixed and mobile basis throughout the year, adding nearly 100000 subscribers in total.
Speaker Change: Which any such statement or information is based.
Speaker Change: In addition, on this call, we will refer to certain non-cap financial measures.
Speaker Change: <unk> been in postpaid performance was particularly robust with over 260000 ads in 2024, excluding Puerto Rico.
Speaker Change: which are reconciled to the most comparable GAAP financial measures.
Speaker Change: Which can be found in the appendices to this presentation.
Speaker Change: This represents an increase of 9% and shows the potential for volume growth in our region.
Speaker Change: Which is accessible under the investor section of our website.
Speaker Change: We reported adjusted OIBDA of $1 6 billion in the year and this was driven by strong year over year Rebased growth in <unk>, Caribbean, and Costa Rica, and double digit rebased growth in CSW Panama.
Speaker Change: I would not like to turn the call over to our CEO, Mr. Balima.
Balan Nair: In fixed, performance was driven by double-digit growth in broadband revenue following higher volume from our successful commercial strategy, including a focus on triple-play plans, which now represent nearly 60% of our customer base. After the exit of a competitor in 2024, the market structure became primarily a duopoly in both fixed and mobile with Tigo. We are number one in mobile and the challenge in fixed, where we see great potential. Finally, we posted double-digit adjusted OIBDA rebase growth year on year, driven by cost efficiencies and the full year benefit of synergies from the Claro Panamá acquisition. Turning to slide 7 and Liberty Costa Rica. Starting on the left of the slide. We saw consistent quarterly broadband adds throughout the year in what is our most competitive fixed market.
Mr. Balima: Thank you, Assad, and welcome everybody to Liberty Latin America's 4th quarter and year-end 2024 results presentation.
Speaker Change: After a challenging 2024.
Mr. Balima: I'll begin with a group highlights and an overview of our operating results by reporting segment.
Speaker Change: We are committed to making progress in rebuilding Puerto Rico over the coming quarters.
Speaker Change: Chris Noyes, our CFO, will then follow with a review of the company's financial performance. After that, we'll get straight to your questions.
Speaker Change: We continued investing in our networks with approximately 400000 homes passed or upgraded to fiber to the home.
Speaker Change: As always, I am joined by my executive team from across our operations. And I will invite them to contribute as needed during the Q&A following are prepared remarks.
Speaker Change: 97% of our fixed footprint is now gigabit ready exceeding the target we previously set.
Speaker Change: Finally, we have been making important strides to future proof our capital structure.
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.
Speaker Change: In the past six months, we have successfully refinanced $3 3 billion of CSW debt.
Speaker Change: Over 75% of the silo that is now maturing in 2032 and beyond in line with our financing principle of maintaining a long dated capital structure.
Speaker Change: Starting on slide 4 and our highlights for the year.
Speaker Change: We grew our fixed and mobile basis throughout the year, adding nearly 100,000 subscribers in total.
Balan Nair: We continued to expand our footprint, adding over 170,000 fiber to the homes passed in 2024 and taking our total network to 830,000 homes passed. We now have 45% of our network on FTTH, more than double the 20% of a year ago and exceeding the 40% target communicated last year. In mobile, we were once again successful growing our base. We added 114,000 postpaid subscribers in the year for a 31% year-over-year increase. We also secured a total of 570 MHz of spectrum across four different bands in an auction completed earlier this year. We are pleased with the results, as we were awarded the amount of incremental spectrum that we were asking, which will enable us to enhance and grow our 5G networks and increasing capacity and speeds. Moving to the center of the slide, consumer mobile remains our largest product with 60% share of revenue.
Speaker Change: Turning to slide five ill begin our operating review with CFW Caribbean, where we delivered operating momentum in mobile postpaid and strong financial execution.
Speaker Change: Broadband and postpaid performance was particularly robust, with over 260,000 ads in 2024, excluding Puerto Rico.
Speaker Change: This represents an increase of 9% and shows the potential for volume growth in our region.
Speaker Change: Starting on the left of the slide with our subscriber adds.
Speaker Change: Full year 2020 for broadband thats been negatively impacted by hurricane barrel, primarily in Jamaica.
Speaker Change: We reported adjusted Obita of 1.6 billion in the year. And this was driven by strong year over year rebates growth in CNW Caribbean and Costa Rica and double digit rebates growth in CNW Panama.
Speaker Change: In Q3, we saw the immediate impact of the storm at 16000 broadband losses.
And in Q4, we lost a further 11000 broadband <unk> mainly related to the disconnection of non paying customers.
Speaker Change: After challenging 2024, we are committed to making progress in rebuilding Puerto Rico over the coming quarters.
Speaker Change: Adjusting for this event, we would've added 7000 broadband subscribers in Q4 and 18000 for the year.
Speaker Change: We continued investing in our networks with approximately 400,000 homes past or upgraded to fiber to the home.
Speaker Change: In mobile our positive postpaid performance continued in Q4.
Speaker Change: 43000, net adds in 2024, our postpaid base increased by 14% year over year driven by Jamaica.
Speaker Change: 97% of our fixed footprint is now gigabit ready, exceeding the target we previously set.
Speaker Change: Finally, we have been making important strides to future-proof our capital structure.
Moving to the incentive to slight in our revenue by product.
Balan Nair: This is followed by a consumer fixed business representing just under 30%, and then a small but fast-growing B2B operations. Costa Rica is our most competitive fixed market with 5 nationwide players, while in mobile, we compete against 2 other operators. Overall, I am very pleased with our performance and future growth prospects in Costa Rica as we await for approval of our proposed merger with Tigo, which we expect to close towards the end of the year. Moving to slide 8 and our Liberty Networks segment. This continues to be a great business for us with exceptional free cash flow generation. To provide some visibility of the underlying trends in the business, on the left side of the slide, we present revenue broken down by lines of business.
Speaker Change: Pie chart depicts the well diversified nature of CSW Caribbean revenue <unk> and consumer fixed the largest element followed by consumer mobile in.
Speaker Change: In the past 6 months, we have successfully refinanced 3.3 billion of CMW debt.
Speaker Change: Over 75% of the silent debt is now maturing in 2032 and beyond.
Speaker Change: In our Caribbean markets. The operating environment is constructive as we primarily compete in Duopolies, where we are.
Speaker Change: In line with our financing principle of maintaining a long dated capital structure.
Speaker Change: Often the leading player.
Speaker Change: Rebased revenue grew 2% year over year, driven by double digit growth in postpaid revenue and supported by successful price increases in fixed and mobile across our main markets.
Speaker Change: Tending to slide 5. I'll begin our operating review with CNW Caribbean, where we delivered operating momentum in mobile postpa and strong financial execution.
Speaker Change: Starting on the left of the slide with a subscriber ads.
Speaker Change: Overall.
Speaker Change: <unk> 24 was a strong operational year for CFW Caribbean with cost efficiencies driving nearly 200 basis points of margin expansion.
Speaker Change: Full year 2024 broadband ads were negatively impacted by Hurricane Beryl, primarily in Jamaica.
Speaker Change: As Chris will come onto we expect operational leverage to continue to be a focus and driver of adjusted OIBDA growth in 2025.
Speaker Change: In Q3, we saw the immediate impact of the storm with 16,000 broadband losses.
Speaker Change: And in Q4 we lost a further 11,000 broadband RGUs, mainly related to the disconnection of non-paying customers.
Balan Nair: Enterprise has been the faster grower, up 9% year over year, driven by growth in IT as a service and connectivity, especially in Colombia, Dominican Republic, and Honduras. Wholesale reported figures continue to be challenged by the impact of non-cash IRU declines totaling USD 18 million year over year. This headwind is progressively reducing as IRUs are replaced by lease capacity sales. Full year rebase revenue declined by 2%, excluding the impact of IRUs, it would have been up by 2%. Lastly, we are finalizing contract terms to commence the construction of MANTA, our subsea cable system project in collaboration with Sparkle, owned by Telecom Italia and Gold Data. Next, to slide 9 and Liberty Puerto Rico. Starting on the left of the slide. In Q4, we added 5,000 fixed RGUs with broadband mostly flat.
Speaker Change: Moving to slide six and I'll <unk> Panamax segment.
Speaker Change: Starting on the left of the slide.
Speaker Change: Adjusting for this event, we would have added 7000 broadband subscribers in Q4 and 18,000 for the year.
Speaker Change: We continued our broadband momentum in 2024, adding 23000 subscribers, which was 10% higher year over year.
Speaker Change: Immobile, a positive postpaid performance continued in Q4.
Speaker Change: We have been investing in our network, expanding and upgrading with FTE th <unk>, passing and I'm pleased to say that only 2% of our footprint is not covered by copper with most of this to be decommissioned by the end of this year.
Speaker Change: With 43,000 net ads in 2024.
Speaker Change: A post based increase by 14% year over year, driven by Jamaica.
Speaker Change: Moving to the center of the slide and our revenue by product.
Speaker Change: In mobile we had a record year reporting 78000 postpaid ads driven by our successful acquisition campaigns following the exit of a competitor in.
Speaker Change: An increase in FMC penetration.
Speaker Change: And our focus on prepaid to postpaid migration.
Speaker Change: Moving to the incentive to slight in our revenue streams, which in aggregate drove top line, 3% higher in the year.
Speaker Change: Growth was driven by mobile and fixed products, which were up by 7% and 4% respectively.
Balan Nair: Adjusting for the impact of the discontinuation of ACP, we would have delivered an increased 7,000 broadband RGUs this year. Earlier this year, we also put through an annual pricing increase for our fixed base, which should underpin revenue performance. Our business continues to invest in products and infrastructure with 55,000 homes passed, all upgraded to FTTH in the year. We also made material progress towards making our network gigabit ready. At the end of 2024, over 90% of our HFC homes were on DOCSIS 3.1, more than a 30 percentage points increase compared to the previous year. Overall, our network is now capable of delivering speeds of 1 Gb per second or more on 95% of our footprint. As a testament to the strength of our network, Ookla recently confirmed Liberty as having Puerto Rico's fastest network.
Speaker Change: Mobile growth benefited from a larger subscriber base and pricing actions.
Speaker Change: Out of the year.
Speaker Change: And fixed performance was driven by double digit growth in broadband revenue following higher volume from our successful commercial strategy, including a focus on triple play plants, which now represent nearly 60% of our customer base.
Speaker Change: After the exit of a competitor in 2024, the market structure became primarily a duopoly in both fixed and mobile <unk>.
Speaker Change: We are number one in mobile and the challenging fixed maybe we see great potential.
Speaker Change: Finally, we posted double digit adjusted OIBDA rebased growth year on year, driven by cost efficiencies and a full year benefit of synergies from the collateral Panama acquisition.
Speaker Change: Turning to slide seven and Liberty Costa Rica study.
Speaker Change: Starting on the left of display we saw consistent quarterly broadband adds throughout the year in what is our most competitive fixed market.
Balan Nair: Turning to mobile, we had a challenging year in postpaid, with ECF disconnections exacerbating losses caused by the migration. In prepaid, our momentum continued in Q4 with the third consecutive quarter of net adds. As we integrate the EchoStar distribution network in the coming months, we aim to build on this trend in a segment where there is significant opportunity. For postpaid, performance has been improving and Q4 losses more than halved sequentially. We also observed improvements in other key operating indicators such as NPS, which I will cover in the next slide. However, there is more work to do here, and we are focused on returning to net adds as quickly as possible. In the center of the slide, we show the revenue mix in Puerto Rico and our overall top line decline versus 2023, mainly driven by the subscriber reduction we experienced over the course of the year.
Speaker Change: We continued to expand our footprint, adding over 170 <unk> fiber to the home homes passed in 2024.
Speaker Change: And taking our total network to 830000 homes passed.
Speaker Change: We now have 45% of our network on <unk> more than doubled at 20% of a year ago and exceeding the 40% target communicated last year.
Speaker Change: In mobile we once again successful growing up base, we added 114000 postpaid subscribers in the year for 31% year over year increase.
We also secured a total of 570 megahertz of spectrum across four different bands in an auction completed earlier this year.
Speaker Change: We are pleased with the results. If you were awarded the amount of incremental spectrum that we will asking.
Speaker Change: Which will enable us to enhance and grow our <unk> networks and increasing capacity and speeds.
Balan Nair: On slide 10, we wanted to show postpaid net adds and mobile NPS evolution over the past 3 years. On the left side of the slide, we break down activity into gross adds and disconnects. Gross adds have been relatively stable over the past 3 years, showing the underlying strength of our product offering. This includes the migration-related disruptions in 2024, when our sales force was redeployed to focus on customer care. Looking forward, we see an opportunity to offer bespoke and converged offerings to drive additions. Conversely, churn increased materially during the migration period, driven primarily by billing issues as we moved to new IT platforms, as well as the termination of the ECF program. In the past 2 quarters, we have seen our efforts to improve this metric drive lower disconnects and a reversal of the negative trend, a key component we strive for net adds.
Speaker Change: Moving to the center of the slide.
Speaker Change: Consumer mobile remains our largest product with 60% share of revenue.
Speaker Change: This is followed by a consumer fixed business, representing just under 30% and then a small but fast growing <unk> operations.
Speaker Change: Costa Rica, as a most competitive fixed market, but five nationwide players while in mobile we compete against two other operators.
Speaker Change: Overall, I am very pleased with that performance and future growth prospects in Costa Rica, as we await approval of our proposed merger with <unk>, which we expect to close towards the end of the year.
Speaker Change: Moving to slide eight and our Liberty networks segment disc.
Speaker Change: This continues to be a great business for us with exceptional free cash flow generation.
Speaker Change: To provide some visibility of the underlying trends in the business on the left side of the slightly present revenue broken down by lines of business.
Balan Nair: On the right of the slide, we show NPS progression, which is a leading performance metric we monitor closely. The graph depicts the evolution of this metric since the beginning of Q1 2022, when our NPS was at similar levels as of today. Following Hurricane Fiona in Q3 2022, we recorded an improvement in the score as our customers recognized the reliability of our networks and our efforts to support our local communities in a time of crisis. During the migration, we then observed a marked deterioration of NPS related to technical or billing issues. Finally, as we discussed during our Q3 call, we are now getting back to pre-migration levels and 50 points better compared to the migration lows. Undeniably, 2024 was a very challenging year for us in Puerto Rico, and with hindsight, we underestimated how difficult the migration and recovery would be.
Speaker Change: Enterprise has been the fastest growing up 9% year over year, driven by growth in IP as a service and connectivity, especially in Colombia, Dominican Republic and Honduras.
Speaker Change: Wholesale reported figures continued to be challenged by the impact of noncash IOU declines totaling $18 million year over year.
Speaker Change: This headwind is progressive fee, reducing its IRR user replace by lease capacity sales.
Speaker Change: Full year Rebased revenue declined by 2%, but excluding the impact <unk> would have been up by 2%.
Speaker Change: Lastly, we are finalizing contract terms to commence the construction of Montana.
Speaker Change: Subsea cable system project in collaboration with Sparkle owned by Telecom Italia and gold data.
Speaker Change: Next to slide nine and Liberty, Puerto Rico.
Speaker Change: Starting on the left of the slide.
Speaker Change: In Q4, we added 5000 fixed <unk> with broadband mostly flat.
Balan Nair: However, our business still has a unique combination of leading mobile and fixed infrastructure, and we are determined to rebuild this business in 2025. Our strategy is simple: We are going back to basics. We're going to grow the top line leveraging our best-in-class networks and FMC capabilities and focusing on customer care and churn reduction. We're going to recover margin, exercising cost controls through efficiency initiatives, and we're going to preserve liquidity, reducing capital intensity as our fixed network is well invested and future-proof with 95% of our footprint being gigabit ready and our mobile network continues to be the most reliable on the island. Moving to slide 11 and an overview of our infrastructure assets. On the left of the slide, you can see that across our consumer markets, 97% of our networks can support very high speed through either HFC or fiber to the home.
Speaker Change: Adjusting for the impact of the discontinuation of ACP, we would've delivered an increased 7000 broadband <unk> used this year.
Speaker Change: Earlier this year, we also put to an annual pricing increase for a fixed base, which should underpin revenue performance.
Speaker Change: Our business continues to invest in products and infrastructure with 55000 homes passed or upgraded to <unk> in the year.
Speaker Change: We also made material progress towards making our network gigabit ready at the end of 2020 for over 90% of our HFC homes will on DOCSIS three one more than a 30 percentage point increase compared to the previous year.
Speaker Change: Overall, our network is not capable of delivering speeds of one gigabit per second or more a 95% of our footprint.
Speaker Change: As a testament to the strength of our network Uccle recently confirmed Liberty is having Puerto Rico's fastest network.
Balan Nair: We continue to build fiber and migrate our customers from copper to fiber technology. Over the past year alone, our fiber to the home proportion has increased by 9 percentage points as we expanded our footprint and upgraded our copper plant. Upgrading our networks is a key focus for us, as you can see in the center of the slide. We are committed to getting virtually all our network to gigabit readiness, capable of delivering speeds of 1 Gb per second and above. Having begun our journey with 7% of our network at this standard in 2018, we advanced in 2024 and anticipate further progress this year. On the right of the slide, we show fixed and mobile network information by market.
Speaker Change: Turning to mobile we had a challenging year in postpaid.
Speaker Change: ECS disconnections attached operating losses caused by the migration.
Speaker Change: In prepaid our momentum continued in Q4 with a third consecutive quarter of net adds.
Speaker Change: As we integrate the Echostar distribution network in the coming months, we aim to build on this trend in this segment with a significant opportunity.
Speaker Change: For postpaid performance has been improving in Q4 losses more than half sequentially.
Speaker Change: We also observed improvements in other key operating indicators, such as NPS, which I'll cover in the next slide.
Speaker Change: However, there is more work to do here and we are focused on returning to net adds as quickly as possible.
Balan Nair: Notably, we are 100% fiber in Barbados, and the majority of our footprint is FTTH in Panama, Jamaica, and The Bahamas, with great strides made in Costa Rica, where we ended the year with 45% fiber, more than double where we were a year ago. During 2024, we also launched 5G in 3 more markets for a total of 5, with all the remaining ones operating on LTE. Overall, I'm proud to say that we have some of the best-in-class networks across the regions, as recognized by the loyalty of customers as well as external parties. BTC in The Bahamas secured awards from Ookla for the best fixed network, fastest fixed network, best fixed gaming experience, and best mobile video experience. Más Móvil in Panama won the fastest fixed and mobile networks, according to Ookla.
Speaker Change: In the center of the Slide we show the revenue mix in Puerto Rico, and our overall topline decline versus 2023.
Speaker Change: Mainly driven by the subscriber reduction we experienced over the course of the year.
Speaker Change: On slide 10, we wanted to show postpaid net adds in mobile NPS evolution over the past three years.
Speaker Change: On the left side of the slide we break down activity into gross ads and disconnects gross.
Speaker Change: Gross adds have been relatively stable over the past three years, showing the underlying strength of our product offering this.
Speaker Change: This includes the migration related disruptions in 2024, when our sales force with redeployed to focus on the customer care.
Speaker Change: Looking forward, we see an opportunity to offer bespoke and converged offerings to drive additions.
Speaker Change: Conversely churn increased materially during the migration period, driven primarily by billing issues as we move to new platforms as well as the termination of the ECF program.
Balan Nair: Liberty Puerto Rico was named the island's fastest fixed network by Ookla for the eighth consecutive year and the most reliable mobile network by Global Wireless Solutions for the 17th consecutive year. Finally, to Slide 12 and our strategic focus areas, recognizing progress made in 2024 and focus areas for 2025, driving towards longer-term shareholder value creation. These priorities are split across three pillars and consistent with those we have previously identified. First, network and IT. We are investing in leading infrastructure to support our customers in the region, as I covered on the previous slide. We will continue to do this, while at the same time having an opportunity to reduce our capital intensity, as Chris will cover in his section. Second, our commercial strategy.
Speaker Change: In the past two quarters, we have seen in our efforts to improve this metric drives lower disconnects and the reversal of the negative trend a key component of <unk>.
Speaker Change: On the right of the slide we show NPS progression, which is a leading performance metric we monitor closely.
Speaker Change: The graph depicts the evolution of this metric since the beginning of Q1 2022, and our NPS was at similar levels as of today.
Speaker Change: Following hurricane piano in Q3, 'twenty two we recorded an improvement in the scores our customers recognize the reliability of our networks and our efforts to support our local communities in a time of crisis.
Speaker Change: During the migration. We then observe a marked deterioration of NPS related to technical or billing issues.
Balan Nair: We saw traction across our converge offers, closing the year with over 30% FMC penetration in Panama, Jamaica, and Costa Rica, which represents an increase of between 6 and 8 percentage points year over year. In 2025, we will focus on driving penetrations through fresh converge offerings. In 2024, we successfully completed price increases in both fixed and mobile across our main markets with churn in line or below expectations. This will provide a lever to drive top-line future in future years. We believe that delivering a strong digital platform is vital to meeting our customers where they want to interact with us, improving their customer journey and a driver of cost efficiencies. In 2024, we achieved 25% digital sales across the group, exceeding our goal for the year, and our target is to approach the 30s in 2025.
Speaker Change: Finally, as we discussed during our Q3 call. We are now getting back to pre migration levels 50 points better compared to the migration loss.
Speaker Change: Undeniably 2024 is a very challenging year for us in Puerto Rico, and with hindsight, we underestimated how difficult the migration of recovery would be.
Speaker Change: However.
Speaker Change: Business still has a unique combination of leading mobile and fixed infrastructure and.
Speaker Change: And we are determined to rebuild this business in 2025.
Speaker Change: Our strategy is simple we are going back to basics.
Speaker Change: Grow the topline leveraging our best in class networks, and FMC capabilities, and focusing on customer care and churn reduction.
Speaker Change: To recover margin exercising cost controls through efficiency initiatives, and we are going to preserve liquidity, reducing capital intensity. It's a fixed network is well invested and future proof with 95% of our footprint being gigabit ready and our mobile network continues to be the most reliable on the island.
Balan Nair: I also want to note that we continue to see significant opportunity to grow our B2B business in the region, including through targeting specific segments such as hospitality, where we can leverage our leading infrastructure and balance sheet strength. Third and finally, operational and capital allocation. In 2024, we reinforced our mobile operations in Puerto Rico by completing the acquisition of spectrum and subscribers from EchoStar. We started the process of future-proofing our capital structure at C&W, which we have now completed. We invested over $300 million in our equity through the redemption of the remainder of our convertible note and stock purchases. In 2025, our operational priority will be rebuilding Liberty Puerto Rico. In addition, we believe we have a substantial margin opportunity across our business and are working on several cost reduction initiatives to increase operational leverage, as Chris will cover in more detail in his sections.
Speaker Change: Moving to slide 11, and an overview of our infrastructure assets on.
Speaker Change: On the left at the slide you can see that across our consumer markets, 97% of our networks can support very high speed through EBIT HFC or fiber to the home.
Speaker Change: We continued to build fiber and migrate our customers from copper to fiber technology.
Speaker Change: Over the past year low enough fiber to the home proportion has increased by nine percentage points as we expanded our footprint and upgraded our copper plan.
Speaker Change: Upgrading our networks as a key focus for us as you can see an incentive this slide.
Speaker Change: We are committed to getting virtually all unmet gigabit readiness capable of delivering speeds of one gigabit per second and above.
Speaker Change: Having begun our journey with 7% of our network at this standard in 2018, we advance in 2020 and anticipate further progress this year.
Balan Nair: This was a success story in 2024 and will provide further tailwinds in the coming years. Finally, we are excited about our opportunities in Peru. The business finished the year with over 3.1 million homes passed and approximately half a million internet RGUs. According to the latest data from the regulator, WOW is the fastest growing broadband provider in Peru. Overall, we appreciate the overhang Liberty Puerto Rico has created, and it is on us to demonstrate value. I tell you, we still believe that the true worth of our company is not reflected in the current stock price. With that, I'll pass you over to Chris Noyes, our Chief Financial Officer, who will talk you through our financial performance before we take your questions. Chris?
Speaker Change: On the right up to slide.
Speaker Change: <unk> fixed and mobile network information by market.
Speaker Change: Notably we are 100% fiber in Barbados, and the majority of our footprint as FTE th in Panama, Jamaica, and the Bahamas with great strides made in Costa Rica, where we ended the year with 45% fiber more than doubled where we were a year ago.
Speaker Change: During 2024, we also launched <unk> in three more markets for a total of five.
Speaker Change: All the remaining ones operating on LTE.
Speaker Change: Overall I am proud to say that we have some of the best in class networks across the regions as recognized by the loyalty of customers as well as external parties BT.
Speaker Change: PTC in the Bahamas acute award from <unk> for the best fixed network fastest fixed.
Christopher Noyes: Thanks, Balan. I will start by running through our key metrics, focusing on Q4 performance. Sequentially, Q4 revenue improved $61 million to $1.15 billion as compared to Q3, with each of our operating segments delivering increases. C&W Panama and Liberty Costa Rica accounted for the largest moves on the back of B2B. In addition, both C&W Caribbean and Liberty Puerto Rico were up sequentially. Year over year, Q4 revenue was 2% lower on a rebased basis as organic growth in Liberty Costa Rica, C&W Caribbean, and C&W Panama was more than offset by declines in Liberty Puerto Rico and Liberty Networks. At the bottom of the slide, Q4 adjusted OIBDA of $427 million increased 6% sequentially on a reported basis and was lower by 2% on a year over year rebased basis. Slide 15 recaps our segment results for Q4.
Speaker Change: Fixed gaming experience and best mobile video experience.
Speaker Change: Mobile in Panama, and one of the fastest fixed and mobile networks. According to plan.
Speaker Change: Liberty, Puerto Rico was named the island's fastest fixed network baseload for the eighth consecutive year and the most reliable mobile network by global wireless solutions for the 17th consecutive year.
Speaker Change: Finally to slide 12.
Speaker Change: Strategic focus areas recognizing progress made in 2024 and focus areas footprint 25, driving towards longer term shareholder value creation.
Speaker Change: These priorities are split across three pillars and consistent dose we have previously identified.
Speaker Change: First network and IP.
Speaker Change: Investing in leading infrastructure to support our customers in the region as a covenant that previous slide.
Speaker Change: We will continue to do this while at the same time, having an opportunity to reduce our capital intensity as Chris will cover in his section.
Speaker Change: Second.
Speaker Change: Our commercial strategy.
Christopher Noyes: Starting with C&W Caribbean, we reported $371 million of revenue in Q4, reflecting 2% year over year rebased growth. The primary driver of our top-line performance was residential mobile, which grew 7% year over year, helped in large part by the continued growth in our postpaid base with 43,000 postpaid additions since the beginning of 2024 and higher ARPU following price increases, primarily in Jamaica. Adjusted OIBDA expanded in Q4 to $168 million for 6% rebased growth. Sequentially, adjusted OIBDA grew by 7% on a reported basis. For revenue, adjusted OIBDA and P&E additions in Q4, we estimate that the business was impacted by the aftermath of Hurricane Beryl to the tune of $5 million, $6 million, and $9 million respectively. Next, moving to Cable & Wireless Panama. CWP generated $209 million of revenue, representing 1% year over year rebased growth.
Speaker Change: We saw traction across our converged office closing the year with over 30% FMC penetration in Panama, Jamaica, and Costa Rica, which represents an increase of between six and eight percentage points year over year.
Speaker Change: In 2025.
Speaker Change: We'll focus on driving penetration to refresh converged offerings.
Speaker Change: In 2024, we successfully completed price increases in both fixed and mobile across our main markets.
Speaker Change: Churn in line or below expectations.
Speaker Change: This will provide a lever to drive topline future in future years.
Speaker Change: We believe that delivering a strong digital platform is vital to meeting our customers, where they want to interact with us.
Speaker Change: Moving the customer journey and a driver of cost efficiencies.
Speaker Change: In 2024, we achieved 25% digital sales across the group.
Speaker Change: Exceeding our goal for the year and our target is to approach the <unk> in 2025.
I also want to note that we continue to see significant opportunity to grow our <unk> business in the region.
Speaker Change: Including true targeting specific segments, such as hospitality, where we can leverage our leading infrastructure and balance sheet strength.
Christopher Noyes: Mobile residential revenue is up by 20%, primarily driven by subscription and handset equipment growth following the addition of 78,000 postpaid subscribers over the last 12 months and improved prepaid ARPU as our products and promotions led to increased recharge activity. Mobile residential revenue growth was partly offset by a 13% decrease in B2B revenue, driven by lower revenue from government-related projects, some of which we anticipate will come through in 2025. We posted $79 million of adjusted OIBDA in Q4 for 19% year-on-year rebase growth, driven by product mix and synergies from the Claro Panamá acquisition. Adjusted OIBDA was 16% higher sequentially on a reported basis. Turning to Liberty Networks, we generated $110 million in revenue and $61 million in adjusted OIBDA in Q4, resulting in a rebase decline of 2% for revenue and flat adjusted OIBDA performance.
Speaker Change: Fifth and finally operational and capital allocation.
Speaker Change: In 2024, we reinforce our mobile operations in Puerto Rico by completing the acquisition of spectrum and subscribers from Echostar.
Speaker Change: We started the process of future proofing, our capital structure at <unk>, which we have now completed.
Speaker Change: We invested over $300 million and our equity through the redemption of the remainder of our convertible note and stock purchases.
Speaker Change: In 2025, our operational priority will be rebuilding Liberty Puerto Rico.
Speaker Change: In addition, we believe we have a substantial margin opportunity across our business and are working on several cost reduction initiatives to increase operational leverage as Chris will cover in more detail in his section.
Speaker Change: This was a success story in 2024.
Speaker Change: And we will provide further deal wins in the coming years.
Speaker Change: Finally, we are excited about our opportunities in Peru.
Speaker Change: The business finished the year with over $3 1 million homes passed and approximately half million Internet RG use.
Christopher Noyes: Topline was driven by lower wholesale network revenue as compared to the prior year period when we won a significant new contract. This was partly offset by higher enterprise revenue, due primarily to continued growth in managed services and B2B connectivity. Sequentially, adjusted OIBDA growth was 3% on a reported basis. Second from the right, Liberty Puerto Rico. Q4 revenue was $317 million, reflecting a 13% rebase decline year over year. Residential fixed revenue declined by 2% year over year, primarily due to lower ARPU caused by retention-related discounts. Residential mobile revenue was 20% lower compared to the prior year period. This was driven by a reduction in mobile subscribers and ARPU year over year, impacted by disruption related to the migration of customers to our mobile network and lower equipment sales due to promotional activity.
Speaker Change: According to latest data from the regulator Wow is the fastest growing broadband provider in Peru.
Speaker Change: Overall, we appreciate the overhang Liberty, Puerto Rico has created.
Speaker Change: And it is on us to demonstrate value.
Speaker Change: But I would tell you we still believe that a true width of a company not reflected in the current stock price.
Speaker Change: With that.
Pass you over to Chris Noyes, our Chief Financial Officer, who will talk you through our financial performance before we take your questions.
Speaker Change: Chris.
Thanks Alan.
Alan: I will start by running through our key metrics focusing on Q4 performance sequentially Q4 revenue improved $61 million to $1, one 5 billion.
Alan: As compared to Q3 with each of our operating segments delivering increases while CWT in Liberty Costa Rica accounted for the largest moves on the back of <unk>.
Christopher Noyes: B2B revenue declined by 21% year over year, primarily reflecting the cancellation of the FCC's Emergency Connectivity Fund, which led to a reduction of 61,000 mobile postpaid subs over the past year, as well as a reduction in subscribers related to migration challenges and associated credits issued for billing adjustments. We reported $80 million in adjusted OIBDA during the quarter, representing a rebase decline of 24% as compared to Q4 2023. The performance was driven by the impact of our revenue decline and increased bad debt charges, partly offset by lower other operating costs and expenses due to the termination of our TSA with AT&T following migration and lower staff costs due to efficiency programs. Sequentially adjusted OIBDA declined 9% or $8 million on a reported basis. We had expected a sequential increase in adjusted OIBDA in Q4.
Alan: In addition, both <unk> Caribbean and Liberty, Puerto Rico were up sequentially.
Alan: Year over year, Q4 revenue was 2% lower on a rebased basis as organic growth in Liberty Costa Rica, <unk> Caribbean and CDW, Panama was more than offset by declines in Liberty, Puerto Rico and Liberty networks as.
Alan: At the bottom of this slide Q4, adjusted OIBDA of $427 million increased 6% sequentially on a reported basis and was lower by 2% on a year over year Rebased basis.
Alan: Slide 15 recaps our segment results for Q4, starting with <unk> Caribbean, We reported $371 million of revenue in Q4, reflecting 2% year over year Rebased growth. The primary driver of our topline performance was residential mobile which grew seven.
Christopher Noyes: However, we had a $10 million increase in bad debt in Q4 to further reserve for receivables from migrated customers that had previously churned, including a higher than normal default rate on equipment installment receivables. Additionally, we provided incremental credits to customers in the quarter related primarily to billing corrections post-migration. Concluding with Costa Rica on the far right, we delivered Q4 revenue of $168 million and adjusted OIBDA of $67 million, reflecting 9% rebased revenue growth and 11% rebased growth in adjusted OIBDA. The year-over-year rebased performance was mainly driven by higher mobile revenue, primarily due to postpaid subscriber growth. Adjusted OIBDA grew by 32% sequentially on a reported basis. Turning to slide 16, we incurred P&E additions of $725 million or 16% of revenue, in line with our annual target. During 2024, we passed or upgraded approximately 400,000 homes, including more than 90,000 in Q4.
Alan: Percent year over year helped in large part by the continued growth in our postpaid base with 43000 postpaid additions since the beginning of 2024 and higher ARPA following price increases primarily in Jamaica.
Alan: Adjusted OIBDA expanded in Q4 to $168 million for 6% Rebased growth sequentially. Adjusted OIBDA grew by 7% on a reported basis for revenue adjusted OIBDA and <unk> additions in Q4, we estimate that the business was impacted by the aftermath.
Alan: Hurricane barrel to the tune of $5 million $6 million and $9 million respectively.
Alan: Next moving to cable and wireless Panama CW P generated $209 million of revenue, representing 1% year over year Rebased growth mobile residential revenue was up by 20% primarily driven by subscription enhanced had equipment growth. Following the addition of 78000 postpaid subscribers.
Alan: Over the last 12 months and improved prepaid <unk> as our products are promotions led to increased recharge activity mobile residential revenue growth was partly offset by a 13% decrease in <unk> revenue driven by lower revenue from government related projects some of which we anticipate will come.
Christopher Noyes: In addition, we launched 5G across several markets during the year. In terms of spend by category, CPE represented 22% and new build upgrade and capacity accounted for 22% and 14% of fiscal year 2024 total spend respectively. As it pertains to P&E additions across the group, we are focused on bringing annual overall spend down to 14% over the next few years as we benefit in part from lower infrastructure deployment. Looking at adjusted FCF before partner distributions, we delivered a robust Q4 of $196 million, bringing our full year to $116 million. Our annual result was constrained by Puerto Rico performance and taxes related to the tower transaction. However, we are well positioned at LLA for significant adjusted FCF acceleration over the next 2 years. Moving to slide 17.
Alan: Through in 2025.
Alan: We posted $79 million of adjusted EBITDA in Q4 for 19% year on year, Rebased growth driven by product mix and synergies from the Claro Panama acquisition.
Alan: Adjusted OIBDA was 16% higher sequentially on a reported basis.
Alan: Turning to Liberty networks, we generated $110 million in revenue and $61 million and adjusted OIBDA in Q4, resulting in a rebased decline of 2% for revenue and flat adjusted OIBDA performance Top line was driven by lower wholesale network revenue as compared to the prior year period, when we want.
Alan: Significant new contracts. This was partly offset by higher enterprise revenue due primarily to continued growth in managed services and <unk> connectivity sequentially adjusted OIBDA growth was 3% on a reported basis.
Christopher Noyes: We have been focused on improving our margins across our operations through revenue growth together with cost-saving initiatives and CapEx discipline. We wanted to highlight two of our best performing operations in 2024, C&W Caribbean and CWP, both of which are poised for further improvement in 2025. First, in C&W Caribbean, we increased our adjusted OIBDA and adjusted OIBDA less P&E addition margins by 180 basis points to 43.3% and 260 basis points to 27.8% respectively. On adjusted OIBDA, we reduced our direct and indirect operating costs by $7 million year over year, in part due to renegotiation of vendor contracts, automation initiatives, and sales channel transformation. We also improved our P&E additions to revenue by 90 basis points to 15.5%, and we see it going lower in 2025.
Second from the right Liberty, Puerto Rico, Q4 revenue was $317 million, reflecting a 13% rebased decline year over year residential fixed revenue declined by 2% year over year, primarily due to lower <unk> caused by retention related discounts residential mobile revenue was.
Alan: 20% lower compared to the prior year period. This was driven by a reduction in mobile subscribers and <unk> year over year impacted by disruption related to the migration of customers to our mobile network and lower equipment sales due to promotional activity <unk>.
Alan: <unk> revenue declined by 21% year over year, primarily reflecting the cancellation of the FCC's emergency connectivity fund, which led to a reduction of 61000 mobile postpaid subs over the past year as.
Christopher Noyes: Second, in Cable & Wireless Panama, adjusted OIBDA margin increased by 470 basis points during 2024, driven by revenue expansion together with $21 million of lower direct and indirect costs, primarily from synergies it obtained after the Claro Panamá acquisition, combined with labor cost reduction. Additionally, our adjusted OIBDA less P&E additions margin was up 670 basis points in 2024 as compared to 2023, helped in part by P&E additions as a percent of revenue lowered by 200 basis points year over year. Across our operating segments, we believe achieving greater than 30% adjusted OIBDA less P&E additions as a percent of revenue is a worthy operating objective over time. With the exceptions of our networks business, which is already over 40%. Turning to slide 18, adjusted for the recent C&W transactions, we finished 2024 with $8.2 billion of debt and roughly $700 million of cash.
Alan: As well as reduction in subscribers related to migration challenges and associated credits issued for billing adjustments.
Alan: We reported $80 million in adjusted OIBDA during the quarter, representing a rebased decline of 24% as compared to Q4 2023.
Alan: That performance was driven by the impact of our revenue decline and increased bad debt charges, partly offset by lower other operating costs and expenses due to the termination of our TSA with AT&T following migration and lower staff costs due to efficiency programs.
Alan: Sequentially, adjusted OIBDA declined, 9% or $8 million on a reported basis, we had expected a sequential increase in adjusted EBITDA. In Q4. However, we had a $10 million increase in bad debt in Q4 to further reserve for receivables for migrated customers that had previously churned incur.
Christopher Noyes: With adjusted OIBDA and adjusted FCF expanding in Q4, our LLA net leverage sequentially decreased from 4.8 times at Q3 to 4.5 times at Q4. A primary focus of ours over the past six months has been to significantly term out our largest credit silo, which is C&W. As a reminder, the standalone silo consists of three of our operating segments, the Caribbean, Panama, and Liberty Networks. We completed three transactions, $1 billion in senior secure notes during Q4 and $1.5 billion in term loans and $755 million in senior notes post-year-end. The C&W credit silos maturity profiles pre- and post-refinancings are highlighted in the two charts and clearly show the significant improvement in weighted average life. For the silo, we now have an approximate weighted average life of six and a half years, with more than 75% of our silo debt maturing in 2032 and beyond.
Alan: <unk>, a higher than normal default rate on equipment installment receivables. Additionally.
Alan: Additionally, we provided incremental credits to customers in the quarter related primarily to billing corrections post migration.
Alan: Concluding with Costa Rica in the far right. We delivered Q4 revenue of $168 million and adjusted OIBDA of $67 million, reflecting 9% Rebased revenue growth and 11% rebased growth in adjusted weighted.
Alan: The year over year Rebased performance was mainly driven by higher mobile revenue, primarily due to postpaid subscriber growth adjust.
Alan: Adjusted OIBDA grew by 32% sequentially on a reported basis.
Alan: Turning to slide 16, we incurred <unk> additions of $725 million or 16% of revenue in line with our annual target. During 2024, we passed or upgraded approximately 400000 homes, including more than 90000 in Q4. In addition, we launched five.
Christopher Noyes: Not shown, adjusting for the refinancings, LLA on a consolidated basis has close to 70% of its debt due 2029 and beyond. Moving to the final slide and our closing remarks. As Balan highlighted, subscriber losses in Puerto Rico have begun to moderate. We are strengthening our CVPs and further improving our retention efforts on postpaid mobile. Our fixed and prepaid business lines have been moving in the right direction. Obviously, we still have work to do on improving operations in Puerto Rico, and it is a significant focus of both local and LLA management. We are actively engaged in driving OpEx lower through efficiency gains and expect our efforts to build throughout the year. This is a key component, combined with subscriber performance, to enable us to return to adjusted OIBDA growth in the near term. Beyond Puerto Rico, our other operations are executing well.
Alan: Across several markets during the year in terms of spend by category CPE represented 22% and new build upgrade and capacity accounted for 22% and 14% of fiscal year 2024 total spend respectively.
Alan: As it pertains to <unk> additions across the group, we are focused on bringing annual overall spend down to 14% over the next few years as we benefit in part from lower infrastructure deployment.
Alan: Looking at adjusted FCS before partner distributions, we delivered a robust Q4 of $196 million, bringing our full year two $116 million. Our annual result was constrained by Puerto Rico performance and taxes related to the tower transaction.
However, we are well positioned at la for significant adjusted FCS acceleration over the next two years.
Christopher Noyes: We continue to build subscriber volumes through our FMC plans and other strategies that target both broadband and postpaid volumes. As I highlighted, we believe our Caribbean and Central American businesses have significant opportunity to further drive margin expansion as our efforts in 2024 will carry over in 2025, and we continue to find ways to improve our service delivery and customer journeys. Additionally, we believe the completion of the Tigo Costa Rica transaction will be quite value accretive given the synergy opportunity. As we flagged earlier, our Peruvian investment has gained considerable scale quickly and certainly presents us with a range of attractive strategic and operating options. To recap, 2024 was a tough year for us given the PR migration, but our other businesses performed well, demonstrating resilience and growth.
Alan: Moving to slide 17, we have been focused on improving our margins across our operations through revenue growth together with cost savings initiatives and Capex discipline. We wanted to highlight two of our best performing operations in 2020 for CDW Caribbean and CWT, both of which are poised for further improvement in 2020.
Alan: First as CDW Caribbean, we increased our adjusted OIBDA and adjusted OIBDA. <unk> addition, margins by 180 basis points to 43, 3% and 260 basis points to 27, 8% respectively on.
Alan: And adjusted OIBDA, we reduced our direct and indirect operating costs by $7 million year over year in part due to the renegotiation of vendor contracts automation initiatives and sales channel transformation. We also improved our <unk> additions to revenue by 90 basis points to 15, 5% and we see it going lower in 2000.
Christopher Noyes: Key for us in 2025 is to drive both adjusted OIBDA and FCF growth across the company, as well as continue to reduce our leverage levels through adjusted OIBDA expansion. We remain focused on achieving our previously announced three-year guidance targets on adjusted OIBDA and adjusted FCF before partner distributions. As noted earlier, we'll look to drive capital intensity lower. With eight quarters to go, we are obviously behind where we hope to be after year one, given Puerto Rico. Driving outperformance in other businesses and returning Puerto Rico to sustained growth are critical. Notwithstanding at LLA, we feel very good about our 2025 prospects overall and have good momentum carrying into the year. With that, operator, please open it up for questions.
Alan: 25 <unk>.
Alan: Second in cable <unk> wireless Panama adjusted OIBDA margin increased by 470 basis points. During 2024, driven by revenue expansion together with $21 million of lower direct and indirect costs, primarily from synergies obtained after the Klara, Panama acquisition combined with labor cost reduction.
Alan: Additionally, our adjusted OIBDA <unk> additions margin was up 670 basis points in 2024 as compared to 2023 helped in part by <unk> additions as a percent of revenue lower by 200 basis points year over year.
Alan: Across our operating segments, we believe achieving greater than 30% adjusted OIBDA <unk> additions as a percent of revenue is a worthy operating objective over time with the exception of our networks business, which is already over 40%.
Operator: 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 or star zero for operator assistance. In order to accommodate everyone, we request that you ask only one question with one follow-up if needed. If you're using a speakerphone, 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. Our first question will be from the line of Michael Rollins with Citigroup. Please go ahead. Your line is open.
Alan: Turning to slide 18, adjusted for the recent <unk> transactions, we finished 2024 with $8 $2 billion of debt and roughly $700 million of cash with adjusted OIBDA and adjusted Mcf expanding in Q4, our MLA net leverage sequentially decreased from four eight times at Q3 to four.
Alan: Five times at Q4.
Alan: A primary focus of ours over the past six months has been to significantly term out our largest credit silo, which is C and W. As a reminder, the Standalone Siloed consists of three of our operating segments that Caribbean, Panama and networks, we completed three transactions $1 billion in senior secured notes during Q4.
Michael Rollins: Thanks, good morning. 2 questions on Puerto Rico. The 1st, you mentioned the bad debt picked up in Q4. Curious, does that infer that churn could be worse in Q1 before it gets better as that bad debt could just churn into some disconnect risk? Within that, if you're able just to share if you have some visibility. I think you did mention you're expecting trends to get better. What are you seeing in the details of the analytics on your customers that are encouraging in terms of where that performance may be going? Just 2ndly, also on Puerto Rico. You previously described, I believe, a monthly EBITDA target of $45 million.
Alan: <unk> and $1 5 billion in term loans and $755 million in senior notes post year end the.
Alan: <unk> credit silos maturity profiles pre and post refinancings are highlighted in the two charts and clearly show the significant improvement in weighted average life for the silo. We now have an approximate weighted average life of six five years with more than 75% of our silo debt maturing in 2032.
Alan: And beyond not shown but adjusting for the refinancings.
Alan: On a consolidated basis is close to 70% of its debt due 2029 and beyond moving to the final slide and our closing remarks as balan highlighted subscriber losses in Puerto Rico have begun to moderate we are strengthening our cvp's and further improving our retention efforts on postpaid mobile.
Michael Rollins: Curious if you could give us an update on whether that's still the target that Liberty is pursuing. What's the trend to get there, whether it's in Q1 or over the course of 2025? Thank you.
Alan: Our fixed and prepaid business lines had been moving in the right direction.
Balan Nair: Sure. Good morning, everybody. Thanks. Good questions. On the bad debt, the bad debt issue was really a catch-up. We did record the churn, Q1, Q2, you saw the numbers. There was an element in the bad debt that we had to catch up relative, not so much to subscriber movements, but as much as to the acceleration of our equipment installation plans, I'm sorry, installment plans. Those EIP catch-up happens because when a customer disconnects, the handset that they owe us on left us, and our ability to collect them, as it turns out, was quite challenging. There was a bunch of handsets really catch up, which is what happened. We think we've got that mostly under control, but it's something that was a leakage that happened to us.
Alan: Obviously, we still have work to do on improving operations in Puerto Rico and is a significant focus of both local and LLE management. We are actively engaged in driving opex lower through efficiency gains and expect our efforts to build throughout the year. This is a key component combined with subscriber performance to enable.
Alan: To return to adjusted OIBDA growth in the near term.
Alan: Beyond Puerto Rico, our other operations are executing well, we continue to build subscriber volumes through our FMC plans and other strategies that target, both broadband and postpaid volumes.
Alan: As I highlighted we believe our Caribbean and Central American businesses have significant opportunity to further drive margin expansion as our efforts in 2024 will carryover in 'twenty five and we continue to find ways to improve our service delivery and customer journeys <unk>.
Alan: Additionally, we believe the completion of the <unk> Costa Rica transaction will be quite value accretive given the synergy opportunity as we flagged earlier, our Peruvian investment has gained considerable scale quickly and certainly presents us with a range of attractive strategic and operating options.
Balan Nair: Two ways that we are trying to fix that, of course, clearly one, with the collection agencies and the credit ratings, and two, a better way in our process when somebody ports out from our base. A lot of the bad debt issues were not so much whether we did capture the right amount of churn, it's just the right amount of leakage was not captured. Secondly, on green shoots, you saw the numbers on NPS. NPS is kind of a leading indicator. Usually, it's a couple of months before it actually shows up operating-wise. The trends are very positive. One of the leading problems for us in our customer dissatisfaction was not so much just the technology and our IT systems, but some of the processes that we had in actually capturing the right billing amount for our customers.
Alan: To recap 2024 is a tough year for us given the PR migration, but our other businesses performed well demonstrating resilience and growth key for us in 2025 is to drive both adjusted OIBDA and FTF growth across the company as well as continue to reduce our leverage levels through adjusted OIBDA expansion.
Alan: We remain focused on achieving our previously announced three year guidance targets on adjusted OIBDA and adjusted the Scf before partner distributions and as noted earlier, we will look to drive capital intensity lower with eight quarters to go we are obviously behind where we hoped to be after year, one given Puerto Rico.
Alan: Driving outperformance in other businesses and returning Puerto Rico to sustained growth are critical.
Balan Nair: There were a lot of credits going back and forth. When we migrated customers from AT&T, there were a lot of failures in the way the data was transferred to us. In our systems, we didn't capture some of the discounts that our customers were enjoying in the prior billing systems. In the new billing system, some of the codes for the discounts were not there. It's not so much a technology issue, it was a data transfer issue when we did the migration. We're catching up on that as well. You're fixing a lot of the billing issues. We've seen the NPS improve. You saw me talk about our coverage in Puerto Rico. We have the best network.
Alan: Notwithstanding that outlay, we feel very good about our 2025 prospects overall and have good momentum carrying into the year.
Alan: With that operator, please open it up for questions.
Alan: Thank you for your 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 will star zero for operator assistance.
Alan: In order to accommodate everyone. We request that you ask only one question with one follow up if needed.
Alan: If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment.
Alan: We will pause for just a moment to give everyone an opportunity to signal for questions.
Balan Nair: May I highlight, when you look at the NPS numbers, you saw that the big jump in 2023, a big part of that is really, sorry, 2022. A big part of that is coming from the hurricane recovery, which shows two things. One, our commitment to the island, but two, our network was actually one of the best network because we have batteries everywhere. During the hurricanes, we were the ones that's up. Our network continues to be the best network. We just need to capture that, the best fixed network, the best mobile network. We got to fix a lot of the basics, and then we go out with a good proposition for our customers. We're seeing some green shoots there as well. To your last question on the $45 million on EBITDA.
Speaker Change: Our first question will be from the line of Michael Rollins with Citigroup. Please go ahead. Your line is open.
Michael Rollins: Thanks, and good morning.
Speaker Change: Couple of questions on Puerto Rico.
Speaker Change: First you mentioned the bad debt ticked up in the fourth quarter.
Speaker Change: Curious.
Speaker Change: Does that infer that churn could be worse in the first quarter before it gets better as that bad debt could just churn into some disconnect risk.
Speaker Change: And then within that.
Speaker Change: If you are able to share if you have some visibility I think you had mentioned that youre expecting trends to get better.
Speaker Change: What are you seeing in the details of the analytics on your customers.
Balan Nair: I think in the last call I indicated there's a lot of things that we need to fix in Puerto Rico, a lot of the back-office systems. I just talked about the customer experience as well. There's a number of moving parts here, and which is why I said, you know what, I'm not going to give any more guidance on it. Since you asked me, I'll tell you that our target is to get to a four handle back again on EBITDA. You clearly saw we didn't do that in the Q4, but the target is to get back into a four handle, and the team is quite focused on that.
Speaker Change: That are encouraging in terms of.
Speaker Change: Where that performance may be going and then just secondly on.
Speaker Change: Also on Puerto Rico, you previously described I believe a monthly EBITDA target of $45 million I'm curious if you could give us an update on whether that's still the target that.
Speaker Change: Liberty is pursuing.
Speaker Change: And whats the trend get there whether it's in the first quarter or over the course of 'twenty five thank you.
Sure.
Speaker Change: Good morning, everybody. Thanks.
Michael Rollins: Thank you.
Speaker Change: Good questions on the bad debt.
Operator: Our next question will be from the line of Vitor Tomita with Goldman Sachs. Please go ahead, your line is now open.
Speaker Change: That issue was really a catch up.
Speaker Change: Did record the Chin first quarter second quarter, you saw the numbers.
Vitor Tomita: Hello, good morning, all, thanks for taking our questions. 2 quick questions. The first one is on the CapEx guidance. If you could give us a little more color on the rationale for it to reduce CapEx to a level that is lower than most telcos globally or in the region. Just to confirm my understanding that the goal is to approach 13% in 2025 and 2026 to average out 14% in the 3-year guidance period, correct me if I got this wrong. Have you been able to achieve your planned network improvements with less cash than expected? Is this mostly driven by reprioritizing projects that you had planned? Should we see this as a more temporary reduction over the last few years to build up cash flow? Do you see this level as sustainable in the longer run?
Speaker Change: There was an element in the bad debt that we had to catch up relative not so much the subscriber moves.
Speaker Change: Movements, but as much as to do with the acceleration of our equipment installation plan and installment plans and those key touch up.
Speaker Change: Because when a customer disconnects.
Speaker Change: The handset that they owe us on.
Speaker Change: Leftist.
Speaker Change: And.
Speaker Change: Our ability to collect them.
Ends out was quite challenging.
Speaker Change: And so there was a bunch of handset really catch up which is what happened.
Speaker Change: And we think we've got that mostly under control, but it's something that was the leakage that happened to us.
Speaker Change: In two ways that we are trying to fix that of course, clearly one with the collection agencies and the credit ratings and to a better way in a process when somebody puts out from our base.
Vitor Tomita: Our second question would be on Puerto Rico. You discussed a bit that bad debt impact related to equipment installment sales, mostly related to past sales in the context of the migration. The earnings release cites some billing adjustments in B2B clients that were also relevant to B2B revenue reduction in the quarter. Can you give some more color on how relevant those were for Q4, since those are impacts that I believe maybe might not have to expect in Q1? Thank you very much.
Speaker Change: So a lot of the.
Speaker Change: The bad debt issues, but not so much.
Speaker Change: Whether we did capture the right amount of churn. It's just the right amount of leakage was not captured.
Secondly on Green shoots you saw the numbers on NPS, our NPS is kind of a leading indicator usually it's a couple of months before it actually shows up operating wise, but the trends are very positive one of the leading.
Speaker Change: Problems for us in customer dissatisfaction with not so much just the technology.
Balan Nair: Sure. On the first one, on the CapEx guidance, I think what we plan on doing and what we meant to say is that it's going to drop to 14%. We may get to 13% in 2026, but my goal is to do 14/14. That's the plan. The reason we could drop by 2 points is, one, a lot of our builds and upgrades, and primarily the upgrades from our copper plan, is complete.
Speaker Change: Systems, but some of the processes that we had in actually capturing right billing amount for our customers.
Speaker Change: And there were a lot of credits going back and forth. When we migrated customers from AT&T. There were a lot of failures in the in the way the data was transferred to US. So our assistance within captures some of the discounts that our customer has been enjoying in the billing systems.
Speaker Change: So in the new billing system some of the codes for the discounts with not there. So it's not so much a technology issue. It was the data transfer issue. When we did the migration in recapturing catching up on that as well. So you are fixing a lot of the billing issues. We've seen the NPS improve you saw me talk about.
Vitor Tomita: Yeah.
Balan Nair: We just have some stragglers left, but it's mostly complete. This is like a 6-year project. Secondly, we've expanded our mobile networks as well. When we took over this business, we were literally less than 50% LTE. We've upgraded LTE and we've upgraded to 5G in our key markets. I don't expect us to do many other 5G upgrades in the next 24 months. Partly because in a lot of these other locations, even the handsets are not even 5G. It's like 60%, 70% of the handsets are not 5G. As a matter of fact, we still have a whole bunch of 3G handsets in those areas, so it makes no sense for us to do a 5G upgrade. For where I want to upgrade my mobile network, my fixed network, we've done it. Now, listen, when we did the fiber-to-the-home upgrades, the strategy was very clear.
Speaker Change: Coverage in Puerto Rico rehab, the best network and May I highlight when you look at the NPS numbers.
Speaker Change: You saw the big jump in 'twenty three.
Speaker Change: And a big part of that is really coming sorry, 'twenty two big part of it is coming from the hurricane recovery, which shows two things one our commitment to the island, but to our network, what's actually want the best network, because we have batteries everywhere during the Hurricanes. We were the once that's up and our network continues to be the best network.
Speaker Change: And so we just need to capture the best fixed network. The best Mobile network, we got to fix a lot of the basics and then we go out with a good proposition for our customers. So we're seeing some green shoots as well.
Balan Nair: It's to upgrade from a copper twisted pair plan. Twisted copper plan, not from our HFC, even though we've done some of that in Puerto Rico and Costa Rica. Going forward, I think we have a great network already. The second part of where the CapEx helps us as well is our CPE. Our cost of CPE continues to drop, and our focus right now is on mobile. You'll see, and you saw in our numbers, our growth is in postpaid. That's a lot less capital-intensive. When we look at our numbers, 14%, this is going to be a good year in investments and running the business with that number. Of course, clearly, it also is going to contribute to the free cash flow guidance.
Speaker Change: Your last question on the $45 million in EBITDA.
Speaker Change: I think in the last call I indicated.
Speaker Change: There's a lot of things that we need to fix in Puerto Rico, a lot of the back office systems I, just talked about the customer experience as well. So there's a number of moving parts here and which is why I said, you know what I'm not going to give any more guidance on it but.
But since you asked me I'll tell you that our target is to get to a four handle back again on EBITDA. You clearly saw we didn't do that in the fourth quarter, but the target is to get back into a four handle and the team is quite focused on that.
Balan Nair: On your question on the EIP in Puerto Rico and the B2B, about that, the way you should think about this on the B2B side, it's mostly on credit. For some of our large customers, we gave them credit during the period, and this is in reflection of some of the errors in our billing systems. For the most part, most of the credits are all tapering off. I don't expect to see big adjustments in Q1. We feel, I think, on a good trajectory for the next four quarters. There may be still a little bit of noise, but not to the extent that you saw in 2024 on any adjustments like that.
Speaker Change: Thank you.
Speaker Change: Our next question will be from the line of Vitor Tomita with Goldman.
Speaker Change: Goldman Sachs. Please go ahead. Your line is now open.
Speaker Change: Hello, Good morning, all and thanks for taking our questions.
Speaker Change: Two quick questions. The first one.
The Capex guidance, if you could give us a little more color on the rationale for it.
Speaker Change: <unk> Capex to foster a level that is lower than most of the telcos globally or in the region.
Speaker Change: Second part of my understanding is that's the goal.
Speaker Change: Swap Roche.
Speaker Change: <unk> percent in 2010 subside in 2022 average of 14% and the three year guidance period, but correct me if I got this wrong.
Balan Nair: We're going to try to wean off a lot of the credits that we've been giving out to fix some of the setbacks we had in our billing systems. On the EIP, I think we've got a lot of work going on in our teams. We just recently, just this last week, loaded up again to the credit agencies loads of customers that have taken our handsets and not paid us for it. Work is going on on that front. Going into 2025 with a lot better operating principles than we did in 2024.
Speaker Change: Have you been able to achieve different branded networks improvement less cash than expected or is it mostly driven by recreate re prioritizing projects that you have some land and should we see a business that mark temporary reduction over the last few years to build up cash flow or do you see this model that's sustainable.
Speaker Change: In the longer run.
Speaker Change: Our second question will be.
Speaker Change: One question on equal you discuss a bit about bad debt impact related to the true.
Speaker Change: Hey, Greg Matz installment sales, mostly related to Pascal in the context of that migration and also beyond just released some data at <unk>.
Vitor Tomita: All right. Thank you. Thank you very much.
Speaker Change: To be to be clients that were also relevant is true it should be rapidly reduction with Macquarie.
Operator: Our next question will be from the line of Andres Carrillo with Scotiabank. Please go ahead. Your line is open.
Speaker Change: Can you give some more color on how relevant fields, where Q4.
Andres Carrillo: Thank you. There's been a number of press articles mentioning LLA as interested in a number of M&A transactions in the region. I think that there was an article saying that you could sell your Puerto Rico business to Verizon, and there were other articles saying that you could buy the Telefónica businesses in Argentina and Peru. I'm wondering, what are your thoughts on M&A for this year? Thank you.
Speaker Change: So those are impacts that they believe.
Speaker Change: Maybe Mike perhaps you expect in Q1, thank you very much.
Mike: Sure on the first one on the Capex guidance I think what we would plan on doing and what we meant to say is that it is going to drop to 14%.
Speaker Change: <unk>.
Speaker Change: And we may get to 13% in 'twenty six but but my goal is to do 14 14, that's the plan.
Speaker Change: And.
Balan Nair: Thank you, Andres. On the Puerto Rico rumors, we came out and said we don't confirm or deny. Listen, if we were going to do something, I would have said something on this call. There's nothing going on there. We are focused on fixing the business and staging a really nice comeback in Puerto Rico. That is our plan. Clearly, if you look at our EBITDA right now, it's suboptimal for me to trade that asset at this point. We are going to fix it. We're going to grow that EBITDA, and I think it's going to be a great asset for anybody. Now, on the Telefónica front, clearly you know all the issues. Just to reassure everybody on this call, the Telefónica Peru asset has a lot of tax liabilities. It's in insolvency right now. It's not one that is of any interest to us.
Speaker Change: The reason, we could drop by two points is one.
Speaker Change: A lot of our builds and upgrades and primarily the upgrades from a copper plan.
Speaker Change: Is complete.
Speaker Change: We just have some stragglers block, but mostly this is like a six year project Secondly, we've expanded our mobile networks as well when we took over this business.
Speaker Change: Sure.
Speaker Change: Literally less than 50% LTE.
Speaker Change: Upgraded LTE and we've upgraded to <unk> in our key markets.
Speaker Change: Expect us to do many other Fi upgrades in the next 24 months, partly because in a lot of these other locations even the handsets are not even <unk>.
Speaker Change: Like 60%, 70% of the handsets are not baidu as a matter of fact, we still have a whole bunch of <unk> handsets in those areas. So it makes no sense for us to do it.
So for where we want to upgrade my mobile networks fixed networks, we've done it now listen when we did the fiber to the home upgrades the strategy was very clear.
Balan Nair: The second one, Argentina. Listen, you can't put any debt in Argentina, and it's all going to be in US dollars, and you can't hedge it. Clearly in a levered equity model, that doesn't work for us. Hopefully that kind of answers the questions.
Speaker Change: To upgrade from a copper twisted plan towards the copper plant.
Speaker Change: Not from our HFC, even though we've done some of that in Puerto Rico and Costa Rica.
Speaker Change: <unk>.
Speaker Change: But going forward I think we have a great network already the second largest red the capex helped us as well as our CPE cost of CPE continues to drop.
Andres Carrillo: Understood. Thank you.
Balan Nair: Thanks.
Operator: Our next question will be from the line of Matthew Harrigan with The Benchmark Company. Please go ahead. Your line is open.
Speaker Change: And our focus right now is some mobile you will see and you saw in our numbers our growth is in postpaid.
Matthew Harrigan: Thank you. Notwithstanding the more moderate approach from the CapEx side, you've got a fair amount of FTTH in place, and I know it's early, but can you talk empirically about what you think are the benefits on a long-term pricing, the functionality of the network, and the cost improvements that you see? I assume more durable, reliable networks, clearly, over a period of time. How much does it cost to actually connect customers relative to what you have on the traditional HFC topology? Thank you.
Speaker Change: And Thats a lot less capital intensive so when we look at our numbers.
Speaker Change: 14%.
Speaker Change: It will be this is going to be.
Speaker Change: <unk> investments and running the business with that number.
Speaker Change: And of course clearly.
Speaker Change: It also is going to contribute to our free cash flow guidance now on your question on the EAP in Puerto Rico.
Speaker Change: And the <unk>.
Speaker Change: I think more what you would do.
Speaker Change: You should think about this on the <unk> side, it's mostly on credits so for some of our large customers. We give them credits during the period and this is in reflection of some of the.
Balan Nair: Sure. Hey, Matt. Two things. On pricing, I would say pricing is really, in many ways, not related to the network. It's really related to how many people operate in that market. Where we had challenges in pricing, I can go back to Chile, it had nothing to do with our network or anybody else had fiber to the home. Remember, we competed with three other fiber to the home network for years, and we were fine. It's when the fifth and sixth operator showed up and started playing the price game, that's when we had problems. Now, back to our business today. In Panama, it's a duopoly. In Puerto Rico, it's a duopoly on the fixed network. In most of all the Caribbean, it's a duopoly.
Speaker Change: Eriksson, our billing systems, but for the most part most of the credits are all tapering off so I don't expect to see big adjustments in the first quarter.
Speaker Change: And.
Speaker Change: We feel I think on a good trajectory for the next four quarters, there may be still a little bit of noise, but not to the extent that you saw in 2024 on any adjustments like that and then we're going to try to run off a lot of the credits that we've been giving out to fix some of the.
Speaker Change: The setback, we had in our billing systems.
Speaker Change: And then on the IP I think we've got a lot of work going on and our teams.
Just recently just this last week loaded up again to sort of credit agencies.
Balan Nair: In Costa Rica, I indicated earlier, we have a lot of fixed operators there. We started a consolidation process with Tigo and S coming together. I hope that this starts a way for consolidation in Costa Rica. That's how we stabilize pricing and then you get pricing power. It's the number of competitors, not so much the network. Having said that, we also have the best network. I think we're in a very good position. One thing that I am very happy with, our strategy over the last 4 years have been on volume, not on price. We actually do have a nice positive price arbitrage against our competitors. In most markets, we do have pricing power now, and we do actually have room between us and our competitors.
Speaker Change: Lots of customers that have taken our handsets are not paid as Brad. So work is going on on that front and.
Speaker Change: 24, I think we're going to go into 2025 going into 25 with a lot better operating principles that we did in 2004.
Speaker Change: Alright, Thank you very much.
Speaker Change: Our next question will be from the line of address Coelho with Scotiabank. Please go ahead. Your line is open.
Speaker Change: Thank you so there's been a number of articles.
Speaker Change: Mentioned in M&A, yes.
Speaker Change: Interesting a number of M&A transactions in the region.
Speaker Change: I think that there was an article.
Speaker Change: That you can scale political reasons to Verizon.
Speaker Change: There were other articles, saying that.
Balan Nair: We fully intend to take advantage of it, and we've talked about price increases already. We focus a lot on volume, and then now we're pivoting to volume and price. I think that strategy is working, and you can see really the tailwinds that came into 2024 and now coming into 2025. This is the flywheel that we were looking for, and it is working. I feel really good about pricing going forward and the market structures everywhere we operate. Your second question was on connecting and the cost to connect. Clearly, in HFC, the cost to connect is a lot lower, only because it's a plant that we own and we already have drops to most homes.
Speaker Change: <unk> grew by Telefonica businesses.
Speaker Change: Sure.
Speaker Change: Sure.
Speaker Change: So I'm wondering what are your thoughts on M&A for the year. Thank you.
Speaker Change: Thank you Andrew.
Speaker Change: On the on the Puerto Rico rumors.
Speaker Change: <unk> came out and said, we don't confirm or deny.
Speaker Change: Uh huh.
Speaker Change: Listen if you're going to do something I would have said something on this call. There is nothing going on there.
Speaker Change: We are focused on fixing the business.
Speaker Change: Staging a really nice comeback in Puerto Rico that is our plan.
Speaker Change: And clearly if you look at our EBITDA right now it's sub optimal for me to treat that asset at this point, we are going to fix it we're going to grow that EBITDA and I think it's going to be a great asset for anybody.
Balan Nair: The cost to get a new customer in fiber to the home is a little bit higher right now because it's a newer network, and when a customer calls us for service, more often than not, we have to pull a drop to the home. It's a drop to home. One interesting data point for you would be, Matt, would be that the cost of CPE in fiber to the home is actually now a lot less than it is in HFC. Who would have thought? It's the cost of drop, and then now the CPE, and the CPE is much lower cost. There are reasons for that, we can get into with Broadcom and the chips and all that, but we are now sitting a lot better, and it's a much more competitive market in fiber to the home with our vendors.
Speaker Change: Now on the Telefonica front.
Speaker Change: Yes.
Speaker Change: Clearly in all issues.
Speaker Change: Just to reassure everybody on this call.
Speaker Change: Telefonica, Peru asset.
Speaker Change: As a lot of tax liabilities, it's an insolvency right now it's not one that.
Speaker Change: This of any interest to us.
Speaker Change: And the second one Argentina.
Speaker Change: Listen.
Speaker Change: You can put any debt in Argentina, and its all going to be in U S dollars and can't hedge it so.
Speaker Change: Clearly in a levered equity model that doesn't work for us so.
Speaker Change: Hopefully that.
Speaker Change: And specifically.
Speaker Change: Understood. Thank you.
Speaker Change: Okay.
Balan Nair: We've got the costs really well on fiber to the home. Like I said, it's cheaper on HFC because there's no drops.
Speaker Change: Our next question will be from the line of Matthew Harrigan with Benchmark Company. Please go ahead. Your line is open.
Speaker Change: Alright, thank you notwithstanding.
Matthew Harrigan: Thanks, Bal, and I'm glad you realize it's not a good time to sell the Puerto Rican operation. Have a great year.
Speaker Change: More moderate approach from the Capex side, you've got a fair amount.
Speaker Change: FTE th in place and I know, it's early but can you talk empirically about what do you think are the benefits on a long term pricing and the functionality of it.
Balan Nair: Thanks.
Operator: As a reminder, for any further questions regarding the company's operations, please press star one now. Our next question will be from the line of Matthew Robillard with Barclays. Please go ahead. Your line is open.
Speaker Change: The network and the cost improvements that you see.
Speaker Change: I assume you'd have more durable.
Speaker Change: Reliable networks clearly over a period of time and then how much does it cost to actually connect.
Matthew Robillard: Good morning, and thank you for the presentation. I had two questions. One is around Puerto Rico, but not about all the questions that have been asked before, but really about the EchoStar integration. How is it going? I think at the Q3 call, you had flagged that you may have to face some interoperability issues between the handsets of the customers that you acquired and your technology. If you can clarify that and how it's going. Then just a very quick one on guidance. I realize you reiterated guidance, but can you confirm that the ranges and the numbers that you've put in your Q4 '23 presentation are still valid? Because maybe I missed it, but I haven't seen it anywhere in the Q4 '24 docs. Thank you.
Speaker Change: Customers relative to what you have on the traditional.
Speaker Change: HFC topology. Thank you.
Matt: Sure Hey, Matt.
Matt: Two things on pricing I would say pricing is really in many ways.
Matt: Not related to the network, it's really related to how many people operate in that market.
Matt: Where we had challenges in pricing I can go back to Chile.
Matt: Nothing to do with our network and if anybody else had fiber to the home remember we competed with three other fiber to the whole network for years.
Matt: We will find its been the fifth six operators showed up and started playing the price game, that's when we had problems.
Matt: Now back to our business today.
Matt: Panama, It's a duopoly.
Balan Nair: Sure. I think let me answer your second question first. As Chris indicated, we are reconfirming our guidance on free cash flow. If you recall, we had originally guided to greater than $1 billion in free cash flow. What we're saying, it's going to be about $1 billion. The difference is, like Chris said, 2024 was a challenging year for us in Puerto Rico. Now, I'll tell you, when I put a guidance out, we don't just put the $1 billion out. We actually have buffers against that $1 billion. I must say that the challenges in Puerto Rico in 2024 pretty much ate up most of my buffers. The path to $1 billion in free cash flow is still clear to us. The other parts of the guidance, the EBITDA was supposed to be in the mid-single digit mid to high single digit.
Matt: In Puerto Rico, it's a duopoly on the fixed network.
Matt: Most of all the Caribbean it to do.
Matt: Roughly in.
Matt: In Costa Rica, I indicated earlier, we have a lot of lot of fixed operators, there, but we started the consolidation process.
Matt: With the <unk> in this coming together and I hope that this is not a wave of consolidation in Costa Rica.
Matt: And Thats, how we stabilized pricing and then you would get pricing power. It's the number of competitors not so much the network, having said that we.
Matt: Also have the best network.
Matt: No.
We had a very good position and one thing that I am very happy with.
Matt: Our strategy over the last four years have been on volume not on price. So.
Matt: Actually do have a nice positive price arbitrage against our competitors.
Matt: In most markets.
Matt: We do have pricing power now and we do actually have room between us and our competitors and we fully intend to take advantage of it and we've talked about price increases already so we focus a lot on volume and then now we are pivoting to volume and price and I think that strategy is working and you can see you.
Balan Nair: We are going to be around the hoop there on those numbers. You'll see 2025 performance and 2026 performance. It will come in around that guidance. Finally, on CapEx, as Christopher Noyes indicated, we're going to drop our CapEx. We originally were planning on 16%. We did spend a little north of 16% in 2024. We expect to spend 14% in 2025 and probably come in around 14% in 2026 as well. That's where it's going to lay out in the guidance. On Puerto Rico, in the EchoStar integration, I'll tell you, Eduardo, our lead in Puerto Rico, our general manager, he's got a full handle on this. Remember, he came to us from TracFone, where he did a huge prepaid migration between TracFone and Verizon. He's assembled a team that helped him do that migration in Puerto Rico.
Can see really the deal wins that came into 'twenty, four and now coming into 'twenty five.
Matt: And so this is the flywheel that we were looking for and it is working.
Matt: So I feel really good about pricing going forward and the market structures everywhere we operate.
Speaker Change: Your second question was on connecting and the cost to connect clear.
Speaker Change: Clearly an HFC the cost to connect a lot lower only because it's a plant that before and we already have drops to most phones.
Speaker Change: The cost to get a new customer in fiber to the home is a little bit higher right now because it's a newer networks and when a customer calls us for service more often than not we have to pull that dropped to the home.
Balan Nair: Because remember, the EchoStar migration here from Boost, it's all prepaid. Prepaid is a lot easier to migrate than postpaid. That's why when you look at our Puerto Rico migration from AT&T, our prepaid business, our NPS has remained high. Those customers have come in. We're actually growing that business. It was the postpaid that we ran into issues. In the EchoStar integration, I feel a lot more confidence because one, it's prepaid, and two, I have Eduardo there and the team that he's built around it. The issue on handset interoperability remains. There will be handset interoperability. We have budgeted in our plans a migration of handsets. People would come into our stores, or as people upgrade or change plans, they would get a new handset. That is in our budget already.
Speaker Change: So it's a dropdown one interesting data point for you would be Matt would be that.
Speaker Change: The cost of CPE.
Speaker Change: In fiber to home is actually now a lot less than it is an HFC who would have thought.
Speaker Change: So it's the cost of drop and then now the CPE and the CPE is much lower cost.
Speaker Change: And there are reasons for that we can get into with Broadcom and the chips and all that but we are not sitting a lot better and it's a much more competitive market in <unk> and fiber to the home.
Speaker Change: With our vendors so we've got the costs really well.
Speaker Change: On fiber to home and.
Speaker Change: And like I said, it's cheaper on HFC ecosystem no drops.
Balan Nair: We do have a good plan on how we would do that operationally for our customers. As you can see right now, most of our customers that come in on prepaid, when they upgrade, we put them on our platform as opposed on the existing platform. We've already started the work, and a lot more work will happen in the Q2 and Q3 this year, and we expect to get it all mostly completed in the Q4 of this year. Hopefully that answers your question.
Speaker Change: Thanks, Paul and I'm glad you I realize it was not a good time to solve the Puerto Rican operation.
Speaker Change: Have a great year.
Paul: Hey, thanks.
Speaker Change: As a reminder for any further questions regarding the company's operations. Please press star one now and our next question will be from the line of Matthew <unk> with <unk>.
Speaker Change: Barclays. Please go ahead your line is open.
Speaker Change: Good morning, and thank you for the presentation.
Matthew Robillard: Thank you very much. Absolutely. Thanks.
Speaker Change: I have two questions one is around Puerto Rico, but not about.
Operator: That will conclude today's question and answer session. I'd like to hand back to Balan Nair for any additional or closing remarks.
Speaker Change: All the questions I've been asked before but truly about the echostar integration how is it going.
Speaker Change: <unk> kept the Q3 call.
Balan Nair: Yeah. Well, a few things I want to say. Thank you so much, operator. Firstly, you saw that we have a lot of challenges in Puerto Rico, and it is a cloud on not only how the business performed and our equity, but also, I guess, on the management team. A lot of us take this very seriously. This was something we know we've let you down on in 2024. I am focused 100% in 2025 to fix a lot of the challenges we had in 2024. We've built a strong team. We've made a number of changes in Q4 and earlier this year as well in the team to put us on a different trajectory in 2025. I must also point out to you, we have a great business.
Speaker Change: You had flagged that you may have.
Speaker Change: Some inter operability issues between.
Speaker Change: The handsets of the customers that you acquired.
Speaker Change: Our technology.
Bob Howard: If you can clarify Bob Howard.
Speaker Change: And then just a very quick one on guidance I realize you reiterated guidance.
Bob Howard: But can you confirm that the ranges in the numbers.
Bob Howard: In your Q4 2023 presentation are still valid because maybe I missed it but I haven't seen it anywhere in the country for docs. Thank you.
Speaker Change: Sure I think let me answer your second question first as Chris indicated right.
We are reconfirming, our guidance on free cash flow if you recall.
Speaker Change: We had originally guided to greater than $1 billion in free cash flow and what we're saying it's going to be about a $1 billion.
Balan Nair: The cloud on Puerto Rico has somehow distorted the fact that the rest of our business are killing it. Costa Rica, Panama, the Caribbean Islands, our Subsea networks business. A lot of those businesses, if you remember when we started this journey, were not where they are today. Panama missed their budget every year for 5 years in a row. We've turned that business around. It is a strong business. We fixed the market structure, put in great management. It is running really well. It's a good flywheel. Costa Rica, who would have thought? We integrated a whole business there from Telefónica smoothly without much disruption to our customers. It is now a good growth in a highly competitive market. We're growing a fixed business, and we were number three in mobile in Costa Rica, and we are now number one. We know how to operate businesses.
Speaker Change: And.
Speaker Change: And the difference is.
Speaker Change: Like Chris said 24 was a challenging year for us in Puerto Rico now I'll tell you when I put a guidance out we don't just put the $1 billion out we actually have buffers against that $1 billion and I must say that the challenges in Puerto Rico in 2024 pretty much eat up most of my buffers.
Speaker Change: But the path to a 1 billion in free cash flow is still clear to us.
Speaker Change: And the other parts of the guidance. The EBITDA was supposed to be in the mid single digit mid to high single digit.
Speaker Change: Going to be around the hoop there on those numbers youll see.
Speaker Change: 25 performance in 'twenty six performance that will come in around around that.
Speaker Change: That guidance and finally on Capex as Chris indicated we're going to drop our Capex. We originally planned.
Speaker Change: Planning on 16%, we did spend a little north of 16% in 2024.
Balan Nair: The Caribbean Islands, this was one that from way back when we bought this, have never achieved its full potential. Today, it is more than exceeded the potential that we even thought for it. Our management team there is doing a great job. The flywheel is great. If you look at the string of competitors that compete with this, many of them have challenges. Some of them have gone bankrupt. Some of them are no longer in business. We are strong. We know what we're doing. We had a hiccup in Puerto Rico. We're going to fix it. 2025 is when we are going to show you that we will fix it. I am eternally optimistic about this business. The rest of our business is going great. I just need to fix Puerto Rico, and I tell you, this business will do very well.
Speaker Change: We expect to spend 14% in 'twenty, five and probably come in around 14% in 2006, as well and Thats kind of where it's going to lay out in the guidance.
Speaker Change: On Puerto Rico in the <unk>.
Speaker Change: Costar integration.
Speaker Change: I'll tell you Eduardo ill.
Speaker Change: Lead in Puerto Rico, our general manager He's got a full handle on this and remember he came to us from Tracfone, where he did a huge prepaid migration between Tracfone and Verizon.
Speaker Change: And he's assembled a team that help them do that migration in Puerto Rico, and because remember the echostar migration here from boost it's all prepaid.
Speaker Change: Prepaid is a lot easier to migrate them postpaid that's why when you look at our Puerto.
Puerto Rico migration from AT&T prepaid business NPS has remained high.
Balan Nair: I thank you for your support and your patience with this. This management team is going to work really hard for you. Thank you.
Speaker Change: Customers have come in we actually growing that business.
Speaker Change: He was the postpaid that we ran into issues. So in the Echostar integration I feel a lot more confidence because one it's prepaid and do I have to do out of that and the team that he has built around it and.
Operator: Ladies and gentlemen, this concludes Liberty Latin America's full year 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: And the issue enhances <unk> ability remains.
Speaker Change: They will be handset interoperability, we have budgeted in our plants.
Speaker Change: Our migration of handsets people would come into our stores.
Speaker Change: As people upgrade or change plans, they would get a new handset and that is in our budget already so and we do have a good plan on how we would do that operationally for our customers.
Speaker Change: As you can see right now most of our customers that come in on prepaid rent when the upgrade we put them on our platform as opposed to on the existing platform. So if you've already started to work and a lot more with what's happened in the second and third quarters. This year and we expect to get it almost completed in the fourth quarter of this year.
Speaker Change: Hopefully that answers your question. Thank you very much.
Absolutely. Thanks.
Speaker Change: That will conclude.
Today's question and answer session I would like to hand back to Pat <unk> for any additional or closing remarks.
Pat: Yes, well a few things I wanted to say thank you so much operator.
Speaker Change: Firstly.
Speaker Change: You saw that we have a lot of challenges in Puerto Rico and it is a cloud on not only.
Speaker Change: How the business performed.
Speaker Change: And our equity, but also I guess on the management team a lot of US take this very seriously. This was something we know we've let you down on in 2024.
Speaker Change: I am focused.
Speaker Change: Hundred percent in 2025 to fix a lot of the challenges we had in 'twenty four we built a strong team we've made a number of changes in the fourth quarter and earlier this year as well in.
Speaker Change: And the team to put us on a different trajectory in 2025, but I must also point out to you.
Speaker Change: Great business.
Speaker Change: Cloud on Puerto Rico, it somehow distorted the fact that the.
Speaker Change: The rest of our business, killing it.
Speaker Change: Costa Rica, Panama, the Caribbean Islands, our subsea networks business.
Speaker Change: A lot of those businesses.
Speaker Change: You remember when we started this journey.
Speaker Change: We're not ready yet to date.
Speaker Change: Panama missed their budget every year.
Speaker Change: Five years in a row.
Speaker Change: We've turned that business around.
Speaker Change: It is a strong business, we fixed the market structure.
Speaker Change: Put in Great management, it is running really well and it's a good flywheel Costa Rica, who would have thought.
Speaker Change: Integrated hold business, there from telefonica smoothly without much disruption to our customers. It is now.
Speaker Change: Good growth.
Speaker Change: Highly competitive market, we are growing our fixed business and we were number three in mobile in Costa Rica, and we are now number one.
Speaker Change: We know how to operate businesses.
Speaker Change: Caribbean Islands. This.
Speaker Change: This was one that from way back when we bought this has never achieve its full potential but today. It is more than exceeded the potential that we even talked with our management team that's doing a great job.
Speaker Change: The flywheel is great and if you look at the string of competitors that compete with US many of them have challenges some of them gone bankrupt some of them are no longer in business.
Speaker Change: We are strong we know what we're doing we had a hiccup in Puerto Rico, we're going to fix it.
Speaker Change: And 25 is when we are going to assure you that we will fix it.
Speaker Change: <unk>.
Speaker Change: I am.
Italy optimistic about this business.
Speaker Change: The rest of our business is growing great I, just need to fix Puerto Rico and I tell you. This business will do very well.
Speaker Change: So I. Thank you for your support and your patience with this.
Speaker Change: This management team is going to work really hard for you.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, this concludes Liberty Latin America's full year 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 Dot.
Speaker Change: Dot com that you can.
Speaker Change: Can also find a copy of today's presentation materials.