Q1 2025 Liberty Latin America Ltd Earnings Call
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Speaker Change: Good morning, ladies and gentlemen, and thank you for standing by. Today's call is being recorded. I'll now turn all over to Sean Fitzgerald, VP of Tax of Liberty Latin America.
Speaker Change: Good morning and welcome to Liberty Latin America's first quarter 2025 Investor Call. 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.la.com. Following today's formal presentation, instructions will be given for a question and answer session.
As a reminder, this call is being recorded.
Speaker Change: Today's remarks may include forward-looking statements, including the company's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical facts.
Speaker Change: Actual results may differ materially from those expressed or implied by these statements.
Speaker Change: For more information, please refer to the risk factors discussed in Liberty Latin America is most recently filed annual report on form 10K, and quarterly report on form 10K, along with the associated press release.
Speaker Change: Liberty Latin America disclines any obligations to update any forward-looking statements or information to reflect any change in its expectations or in the conditions on which any such statement or information is based.
Speaker Change: In addition, on this call, we will refer to certain non-GAAP financial measures.
which are reconciled to the most comparable GAAP financial measures.
Speaker Change: which will be found in the appendices to this presentation which is accessible into the investors' section of our website.
Speaker Change: I would now like to turn the call over to our CEO , Mr. Balan Nair.
Balan Nair: Thank you Sean, and welcome everyone to Liberty Latin America's first quarter 2025 results presentation.
Speaker Change: A begin with a group highlighting an overview of our operating results by credit silo. Credit noise, 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: As always, I've joined by my executive team from across our operations, I'll invite them to contribute as needed during the Q&A, following our prepared remarks.
Speaker Change: At the point of housekeeping, we will both be working from slides which you can find on our website at www.alla.com
Starting at Slide 4, in a high light for the year.
Speaker Change: In the first quarter, we added 44,000 broadband and post-paid mobile subscribers in Doodle. We saw notable progress on post-paid mobile in Costa Rica, as well as across our Caribbean operations.
Speaker Change: A broadband and post-speed strategy remains underpinned by our fixed mobile convergence efforts across the group. In our more successful markets, FMC penetration is now over 30%. This is drawing a lower chance and a more predictable revenue profile.
Speaker Change: Re-reported group on adjusted or even a rebate growth of 8% year-over-year in Q1.
Speaker Change: This was driven by double digit growth in CNW Caribbean, and CNW Panama, contributing to a very strong performance for CNW silo. Our cost management efforts created a flywheel in driving margin expansion across the company.
Speaker Change: At the full year results, we discussed an outlook for lower capital and intensity across the group in 25 and 26.
Speaker Change: And we are starting to see this coming true as well with lower P&E editions in Q1 and prior years period driving growth of adjusted or even less P&E editions of 20% year over year.
Speaker Change: Tending to slide six, I'll begin our operating review with our Kivalen Wireless Credit Silo, which had a very solid water.
Speaker Change: Our CNW credit house composed of CNW Caribbean, CNW Panama, and our Liberty Network's segment.
Speaker Change: Looking first at CNW Caribbean, where we deliver good operating momentum and very strong financial execution.
Speaker Change: Starting on the left of the slide with our subscriber additions.
Speaker Change: Having been negatively impacted by Hurricane Verald during the last two quarters of 24, primarily in Jamaica, in Q1 we saw a return to growth as we began to add back fixed prop and RGUs.
Speaker Change: In mobile, we continue to drive positive post-pay performance in Q1, adding 15,000 subscribers.
Speaker Change: C&W Caribbean represents a proof point of the successful execution of our FMC strategy with strong KPIs being delivered alongside a 4% increase in FMC penetration year over year to over 35%.
Speaker Change: We are also launching loyalty programs across the region with the goal of reducing chain by rewarding the long-term customers.
Speaker Change: Moving to the center of the slide in our revenue by product.
Speaker Change: The pie chart depicts the well-diversified nature of CNW Caribbean revenue with consumer fix and B2B, the largest elements followed by consumer mobile.
Speaker Change: Across the NW Caribbean, Market Structures are constructive as we primarily compete in Duopolys where operators are rational and focus on their customers.
Speaker Change: Year-over-year rebate revenue growth has muted in the quarter partly due to lower B2B project revenues, but we continue to steadily grow our aggregate broadband and mobile service revenue with 3% year-over-year rebate increasing Q1.
Speaker Change: A focus on productivity, network efficiencies, and constant good soil has increased operating leverage.
Speaker Change: Chris recovered the very strong cross-management in the Caribbean which led us to report a record-adjusted
Speaker Change: Moving to slide 7 in our CNW Panama segment Starting in the left of the slide, we continue to see fixed growth in the first quarter, adding not just broadband additions but also video
Speaker Change: In mobile, we continue to grow our post-paid base as we drive pre-paid to post-paid migration.
Speaker Change: The launch of Jamaica, Panama's another stand-up market for FMC Repenetration that's expanded by 4 percentage points year over year to over 30%.
Speaker Change: Moving to the center of the slide and our revenue streams which can aggregate to draw our top line 5% higher in the quarter on a rebate basis.
Speaker Change: C&W Tanama was the fastest-growing segment in our group, this quarter in film of revenue.
Speaker Change: Cross was driven by residential mobile which is up 16% while fixed crew by 3% both on a rebased basis year over year.
Speaker Change: Mobile growth benefited from a larger subscriber base and pricing actions we took throughout 2024, leveraging off the current market structure we saw consolidation from 42 players in the past few years and subsequent market repair.
Speaker Change: This continues to be a great business for us, with the exceptional US dollar 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 business lines.
Speaker Change: Paul Shale had a very strong quarter with higher lease capacity and project revenue more than offsetting non-cash IRU declines. Adjusting for IRU's rebate growth was 7% year over year.
Speaker Change: Enterprise continues to perform well, growing 4% year-over-year on a rebase basis, driven by growth in IT as a service, and connectivity especially in Colombia and the Dominican Republic.
Speaker Change: Meanwhile, we are now at the contract with Subcom for the design, manufacture and installation of the Manta Subsea Cable System.
Speaker Change: It's investment of within our Capac's envelope and provide opportunities for strong future revenue growth.
Speaker Change: Even with the P&E additions in the new fiber routes of Montana Q1, our adjusted Oybeda Les P&E margin is still at an exceptional 36%.
Speaker Change: Turning to slide 10 in our next credit site on Liberty Costa Rica.
Speaker Change: Starting on the left of the slide, we saw continued quarterly broadband additions in Q1 in what is our most competitive fixed market, which helped the party offset our food precious.
Speaker Change: We continue to future-proof our network and with our recent investments, almost half of our network is now on FTTH.
Speaker Change: In mobile, we were again successful in growing our base, adding 30,000 post-bed subscribers
Speaker Change: This was the most successful segment for Post-Paid ads in Q1. And once again, it's reflective of our focus on FMC. We saw penetration growth 6% each point year over year to almost 35%.
Speaker Change: Moving to the center of the slide, Consumer Mobile Remedies are largest revenue category representing over 60% share of our overall revenue in Costa Rica.
Speaker Change: This is followed by a consumer-fixed business representing just under 30% and then a small but fast growing B2B operation.
Speaker Change: Costa Rica's are most competitive fixed market with five nationwide plays. While in mobile, we compete against two other operators. [inaudible]
Speaker Change: Rhea has taken the first step in consolidating the fixed market draw announced J.B. with TIGO
Speaker Change: We still expect this to be close in the second half of this year.
Speaker Change: Overall, I'm very pleased with our performance and future prospects in Costa Rica and expect the integration with Tego to yield even more growth opportunities and rationalization of the market.
Speaker Change: Next, the Slide 12 and our third credit title, Liberty Puerto Rico.
Speaker Change: Starting on the left of the slide, in Q1, we lost 3000 fixed broadband customers, though some impact was anticipated following our annual pricing increase for the fixed space.
Speaker Change: It's typical to see a small-chern response to pricing lose. However, this is expected to underpin future revenue performance.
Speaker Change: Turning to mobile. On post-paid, we continue to make progress in lowering chain. We have seen voluntary chain for every month of the last six months, almost half the level is watching
Gross ads, however, will touch light in Q1, sequentially.
Speaker Change: Overall, progress in retaining the business to positive post-based ads is slower than we would like.
Speaker Change: Though we remain focused on improving the trends in coming months, as we refresh our customer value proposition and provide differentiated offering to customers.
Speaker Change: Across the group, we are focused on leveraging our capabilities with FMC solutions for our customers. And this is equally a goal for as important where we have a strong starting point to our best-in-class fixed and mobile networks.
Speaker Change: We are currently focusing amongst other things on new distribution channels, including our digital platform, the alternative source of incremental growth ads to accelerate the growth of our FNC proposition loop.
Speaker Change: In the center of the slide, we show the revenue makes him Puerto Rico, and our overall year over year top line rebase decline, which at 11% continues to be a headwind for the overall group.
Speaker Change: To address the margin compression we have begun a cost-getting exercise to reflect the lower revenue of the segment.
Speaker Change: This focus is on headquarters staff and minimizing the impact of our frontline team.
Speaker Change: We expect a second half of the year to reflect a lower cost structure and the beginning of positive growth in post-bake.
Speaker Change: We also expect to complete the boost vibrations in the second half.
Speaker Change: With that, I'll pass you over the Chris Noyes, a chief financial officer who will talk to you through our financial performance before we take your questions. Chris?
Chris Noyes: Thanks found. I'll now take you through our financial performance in greater detail, starting on slide 14.
Chris Noyes: Q1 Revenue was 2% lower on a rebase basis at $1.1 billion. We saw positive momentum in C&W Panama, Liberty Costa Rica, and Liberty Networks, which was more than offset by a decline in Liberty Puerto Rico.
Chris Noyes: In fact, our non-plurican operations, which accounts for over 70% of our consolidated revenue, grew revenue by 2% year-over-year collectively on a rebased basis.
Chris Noyes: Turning to adjusted Oivida, we reported a rebased increase of 8% to $407 million, with three of our five operating segments posting year-over-year rebase growth, including Liberty, Puerto Rico.
Supporting our growth is operating leverage as Balan flagged.
Chris Noyes: We have embarked upon a range of cost-out activities across each of our operations, and this has positively impacted our consolidated adjusted Oyba.margin, which increased over 300 basis points compared to Q1 2024.
Chris Noyes: In the third chart, we highlight an important metric for us, which is the Justin Oibidale's P&E Edition.
Chris Noyes: We increase this by $47 million to $286 million in Q1 or 26% of revenue as compared to 22% of revenue in last year's Q1.
Chris Noyes: The year-of-a-year improvement is reflective of the higher adjustment of Oibidob margin and lower P&E additions, which amounted to 11% of revenue in fuel.
Chris Noyes: Moving to the last section, adjusted SCF before partner distribution, was $46 million better, resulting in a negative $103 million for Q1 2025.
Chris Noyes: Combined with third party distributions to our partners, our reported adjusted FCF was a negative $133 million.
Chris Noyes: Our first quarter results are always impacted by seasonal working capital movements in part to the phasing of spend with our vendors.
Chris Noyes: Slide 15 recaps our CNW credit silo results for Q1, which consists of CNW Caribbean, CWP, and Liberty Networks.
Chris Noyes: Starting with C&W Caribbean, we reported $364 million of revenue in Q1 with flat rebase growth. This was a result of 5% growth in mobile offset by a reduction of 3% in B2B on a rebase basis.
Chris Noyes: The main drivers of higher residential mobile revenue were higher ARPU, resulting from price increases and post-paid subscriber growth driven by our successful FMC strategy.
Chris Noyes: We posted a just-it-oiba of $173 million representing 16% rebase growth largely fueled by reductions in indirect costs, especially with respect to facilities, staff, networks, and commercial costs. [inaudible]
Chris Noyes: As a result, adjusted Ovedom margin improved by over 600 basis points year-over-year to 48 percent.
Next, moving to cable wireless mechanical.
Chris Noyes: CWP generated $177 million of revenue, and $65 million of adjusted ove.inQ1. Reflecting 5% rebase revenue growth, and 15% rebased adjusted ove.inQ1.
Chris Noyes: Year-over-year rebased top line growth was driven by 16% growth in mobile and a 3% increase in residential 6, largely as a result of subscriber-based expansion over the last 12 months.
Chris Noyes: This was in part offset by 6% decline in B2B, primarily due to lower governmental projects.
Chris Noyes: Adjusted OIVA Dow Performance Year Over Year was driven by the aforementioned revenue expansion and operating leverage. This led to an adjusted OIVA Dow margin expansion to 30.
Chris Noyes: Turning to Liberty Networks, we generated $110 million in revenue, and $58 million in Adjusted Resulting in rebase growth in 3% revenue, and rebase decline of 2% in Adjusted
Chris Noyes: Topline Growth, Year of the Year, was driven by higher revenue in both wholesale and enterprise business lines, while adjusted Oivida was impacted by higher network maintenance expenses, in part due to the cost associated with a cable cut and higher interconnect costs.
Chris Noyes: Aggregating all three operating segments for the CNW credit silo, we generated $629 million in revenue and $296 million in AdjustmentWave.nq1 for the credit silo.
Chris Noyes: Importantly, these results reflect year-of-a-year re-based growth rates of 2% for revenue and an impressive 12% for adjusted employment time.
Chris Noyes: Moving to slide 16 and the Q1 results for our other two credit silos, Liberty Puerto Rico and Liberty Costa Rica.
on the left, Liberty Puerto Rican.
Chris Noyes: Q1 revenue was $298 million, reflecting at 11% rebase decline year-over-year. Residential fixed revenue declined 1% due to lower volume driven by the discontinuation of the ACP program and lower RPU due to retention discounts more than offsetting price increase. [inaudible]
Chris Noyes: Mobile residential revenue declined by 16% on a rebase basis driven by lower post-paid revenue post-migration.
Chris Noyes: On the other hand, Pepe Revenue remains stable during the period.
Chris Noyes: B2B and Revenue Declined, 22% on a rebase basis driven by lower mobile service revenue due to a decrease in the subscriber base impacted by migration-related churn, RPU declines, and the termination of the ECF program.
Chris Noyes: Adjusted Oyba-Dabra year-a-year as we reported $82 million, which reflected a rebased increase of 16% as compared to Q1 2021.
Chris Noyes: This improved adjusted orbit out performance was mainly driven by costs related to our integration and migration efforts reported in Q1, 2024, and lower equipment, labor, interconnect, and transition services costs in the current quarter.
Chris Noyes: Concluding with Costa Rica on the right, we delivered Q1 Revenue of 158 million dollars in adjusted of $59 million, reflecting 2% rebase revenue growth, and a 1% decline in rebase-adjusted
Fixed Revenue was down 7% year-over-year on a Revaid Spaces
Chris Noyes: with volume growth more than offset by lower ARPU, impacted by competition.
Chris Noyes: Mobile residential revenue increased 6% on a rebase basis driven by post-paid volume and equipment sales growth, and B2B revenue was up 7% year-over-year on a rebase basis mainly due to higher project
Chris Noyes: Adjust an oymida to climb slightly over year, doing part to higher equipment cost, and an increase in bad debt.
Chris Noyes: Turning to slide 17. At the end of Q1 on a consolidated basis, we had $8.2 billion of total debt with a net leverage of 4.6 times.
Chris Noyes: Our fully swapped borrowing cost was 6.5% with the weighted average light of over five years. As of March 2025, we have roughly $600 million of cash on balance sheet and $800 million of availability under our revolving credit lines.
Chris Noyes: Continuing to the bottom left of the slide, the three-time we've seen W. Lee Sinansi over the last nine months, which we highlighted on the Q4 earnings call, have significantly improved our maturity schedule with about 50% of our debt maturing in 2031 and beyond.
Chris Noyes: As it pertains to Liberty Puerto Rico, which has debt due in 2027 to 2029, we would target refinancing in mid to late 2026 as we provide the business with time to improve its financial results.
Chris Noyes: Firstly, each credit pool is an independent rain fence capital structure with no cross-guarantees across the faults. This approach enshrines the concept that each silo is self-standing and shields each of the credit pools from negative performance contamination from any of the other siloes.
Chris Noyes: We aim to maintain sustainable amounts of leverage in our businesses, and we expect our silos to naturally be levered through organic growth. Our medium-term leverage target is mid-3s for LLA on a consolidated basis.
Chris Noyes: In addition, we like to run a long-dated maturity profile and are always monitoring the markets to take advantage of the best issue with Windows possible, which we have been successful in accessing recently with Cable Wars.
Chris Noyes: We run a hedge balance sheet hedging both our floating rates and currency exposure when economically viable, and finally, we maintain a robust liquidity position with significant cash on balance sheet and committed revolving credit facility availability.
Chris Noyes: With respect to our stock buyback program, we have not been active for the last three quarters and have roughly 240 million dollars available under our authorization. We may look to be opportunistic as we return to our cash flow build cycle, which is always weighted to H2.
Chris Noyes: Moving to slide 18, and our conclusion. First, we had a very good start to the year with strong KPI performance on both post-paid mobile and broadband.
Chris Noyes: This flowed through into robust financials which led to high single-digit rebates adjusted to ova.gov in the quarter. This was driven by standout performances in the CNW silo where we recorded double-digit adjusted to ova.gov.
Chris Noyes: This was all supported by continued initiative to reduce P&E additions and intensity, hoping to underpin and improve trends in Casual.
Chris Noyes: In Puerto Rico, we are behind schedule due to the challenging migration in 2024 and a slower start to our recovery than hope for in 2025.
Chris Noyes: This is the principal reason for our decision to withdraw our three-year guidance from 2024 to 2026 for LLA today.
Chris Noyes: Our other operating businesses are performing largely as expected but collectively not able to overcompensate for the 2024 deficit and this lower recovery and Puerto Rico this year.
Chris Noyes: Now it was standing in Puerto Rico, we are seeing steady improvements in churn and have new CVPs in the market and are leaning into FMC where we have seen such success across the group. We anticipate better post-paid Molo KPI trends in the second half of 2025.
Balan Nair: Additionally, we are pursuing an aggressive reduction in costs as Balan highlighted and expect these to positively impact our run rate performance in H2.
Balan Nair: Building upon the steps in Puerto Rico, we continue to be very constructive on the outlook for the group. We are maintaining a strong focus on cost-out and P&E and adds efficiency across all the credit sales.
Balan Nair: We are positioning LLA for significant year-over-year growth in the Justin Oyveda and adjusted FCS before partner distributions in 2025.
And with that operator, happy to take questions.
Thank you for watching!
Speaker Change: The question and answer session will be conducted electronically. If you would like to ask a question regarding the company's operations, please do say by pressing star followed by one to ask a question or star followed by zero for operator assistance.
Balan Nair: In order to accommodate everyone, we request that you only ask one question with one follow-up if needed.
Speaker Change: If you are using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment.
Speaker Change: for just a moment to give everyone an opportunity to signal for questions.
Speaker Change: First question is from Vitor Tomita of Goldman Sachs. Your line is now open, please go ahead.
We're good morning all, and thanks for taking our questions.
Speaker Change: Two questions from our side. The first one is on Puerto Rico. If you could give us a bit more color on the competitive environment there, how aggressive competitors are being right now in terms of promotions and handsets discounts in particular. And our second question would be on Capix. You previously provided a guide and stuff.
Speaker Change: That was lowered to 14% capex in 2025 and in 2026. Do you still expect that's 14% capex yourselves? And could you give some more color on how that might be distributed across regions? Thank you very much.
Speaker Change: Sure, thanks for the question. I'll answer you a second question first on the CAPEX. The CAPEX of 14% is something that we will hit in 25 and 26. And it is quite equally distributed across the business. For many reasons, it wasn't just by luck that we did that's how it laid out, it's...
Speaker Change: The level of maturity in all of our businesses, where we are doing both our fiber to the firm upgrade and our mobile upgrades are reaching to the bar at the same point. So we are very confident on that 14%.
Thank you.
Speaker Change: on the competitive environment in Puerto Rico, essentially on the fixed side we compete with Claro, and on the mobile we compete with Claro and T-Mobile.
Speaker Change: And of all the three mobile operators here, clearly, T-Mobile is the most aggressive on their handsets, subsidies, and that's the case across mainland USA as well, the promotion sample to equal our stimulant.
Speaker Change: Our view is that, you know, and what we've seen is that they haven't gotten any more crashes than what they've been.
Speaker Change: And as a matter of fact, you know, I think with all the terrorist issues, people may, you know, dial it back a bit on subsidies, but we haven't seen that either. Right now, the subsidy issue is not what worries us at all. We're doing pretty well there. I think what we need to do is improve on both our customer service. We're doing pretty well. We're doing pretty well. We're doing pretty well. [inaudible]
Speaker Change: And as well as our cost structure here in Puerto Rico, that's what we are focused on.
and many more. Thank you. Thank you.
Clear, thank you very much.
Thank you.
Speaker Change: The next question is from Chris Hall of New Street Research. Chris, your line is now open. Please go ahead.
Speaker Change: Yeah, thank you, and thanks for the opportunity as well. Can I just follow up on the Capix questions specifically in Puerto Rico? I think, you know, your Capix there was down 30% on a year of year basis to sort of around 11% of service revenues, and I'm just wondering if that is a sustainable level for Puerto Rico going forward or whether it's going to trend back towards the kind of group average you talked about 14%. And then...
Just following up on that.
Speaker Change: You know, appreciate you're still sort of year 15 months away from the refinancing in Puerto Rico. But I just wonder if you can say anything about whether or not you see the opportunity to use any of the assets within Puerto Rico to help build a stronger balance sheet as you've head towards the refinancing.
Sure, on the first question on the CAPEX.
Speaker Change: You know, the way we report the segment CAPEX, it's CAPEX, it's actually spent by the local operating team here in Puerto Rico. We do have CAPEX spent
Speaker Change: for Porto Record at the group level. As an example, a digital platform to consume cat-packed as well is spent at the corporate level but allocated to Porto Record being done for Porto Record.
Speaker Change: Some other spends that we also do at the corporate level, like some of the centralized platforms on a wireless core networks, etc., Dan.
Speaker Change: are allocated outside of Puerto Rico, but really it's Puerto Rico Capac. So, if I look at the overall Capac for the, for the year, Puerto Rico is trending closer to them.
Speaker Change: Smith to a high 15% range. So we're not understanding in Puerto Rico where we're actually
Speaker Change: We're actually doing a pretty good job here, I think, especially in the mobile network. As a matter of fact, as you know last year, we bought the spectrum from Dish, and we're firing that up this summer, and all that 600 mega spectrum gets put into the network. And that also requires gap access, so we're not showing away from that.
Speaker Change: On your second question on the refinancing, I'm going to ask Chris to jump in here and give you some color.
Speaker Change: Yeah, I mean, I think as I mentioned, the focus in the business today is to improve the operations and the financial results, so we're best positioned
Speaker Change: in 26 and mid to late 26 to look to refinance the debt. Certainly the work that we're doing in both the mobile and the fixed business should help crystallize value and improve the value of each of those businesses.
Speaker Change: And I think that's the focus of the management team at this point.
Thank you.
Okay.
Speaker Change: The next question comes from Michael Rollins, a city group. Michael, your line is now open. Please go ahead.
and Daniel Nair. Thank you.
Jose Herrera: Hi, good morning. Thank you for taking the question. This is Jose Herrera on Mike Rollins' team.
Speaker Change: The first question was, within the prior multi-year guide provided, how much of that growth was coming from Puerto Rico relative to the rest of the asset portfolio? And then secondly, if the Puerto Rico business needs additional funding, will Liberty Line America fund the business from the parent balance sheet? Or does Puerto Rico need to fund it within its own capital structure? Thank you. Thank you.
Segment in our business.
Speaker Change: Suffice to say, you can see from the operating results that...
The rest of Liberty Latin America is on fire. And uh...
Speaker Change: You know, and so, if, when we did the guidance a year ago, we did not anticipate some of the challenges of Puerto Rico, and are at least to the extent that we actually experienced it.
Speaker Change: And then when we got into the end of the year, we kind of indicated that, you know, because we had a lot of buffers in our free cash flow beyond the billion dollars, but we thought kind of eaten up over the year in 24. And when we got into the beginning of the year, as we looked at our budgets, et cetera. Let's go.
Speaker Change: We were very close, so everything had to be priced to perfection and we came on to that, you know what, we still think it's right there.
Speaker Change: But then as the first quarter started to progress, we looked at some of the numbers and we tried to trajectory out the first quarter.
Speaker Change: When they add performance, we go, you know, everything needs to be price to perfection and it's not working to perfection here and for what they're equal. Not right now. We're still pretty optimistic in the second half of standing around a lot of things.
Speaker Change: But clearly, you know, having that information on where things are, what's the ritual we decided, you know?
Speaker Change: Let's pull the guidance, but I can tell you that the rest of our business, and even for the equal all the time, it's going to get better and the rest of the business is not throwing off cash. You can see that in our numbers.
Thank you.
Speaker Change: And your second question around the capital structure. Listen, we have the silos for a reason. We paid up for the silos.
Speaker Change: And we're going to treat these all as separate credit silos.
Speaker Change: And the parent will decide, you know, strictly on a capital allocation methodology that we have in the Liberty way, and then we'll make decisions on funding, whether it's a credit silo or funding a buyback or funding anything, basically on how we look at the different opportunities in front of us.
Speaker Change: And I know I'm being cryptic, but you should hang on to the fact that it is a separate credit silo and retweeted as such.
Thank you. Thank you. Thank you.
Thank you. Thank you.
All right.
Speaker Change: As a reminder to ask a question, it is star-solid by one on your telephone keypad.
Speaker Change: The next question is from Matthew Harrigan of the Benchmark Company. Matthew, your line is now open, please go ahead.
Matthew Harrigan: Thanks, Paul. I think a number of years ago, people were quite happy with how Puerto Rico was performing in the context of all the headlines on net migration and the dead issues and some of the Puerto Rico.
Matthew Harrigan: issues and I know you can't just do an econometric model on a country and figure out where our telecom business is going to fare but when you look at you know federal subsidies given everything going on with the Trump administration and that migration on the positive side, Puerto Rico has a very nice manufacturing base.
Matthew Harrigan: Related to some other, obviously it's a territory rather than the state, but you know, relative to other US States.
Hello.
Speaker Change: It helped or hindered are you by the macro outlook in Puerto Rico, and I suspect you're not going to give a definitive number, but in any sense for what you're trying to motivate your operating guys to achieve on a monthly EPA level, you know, aspirational, even if it's not guidance, you know, relative to where you were before. Thank you.
Speaker Change: Sure, thanks, Matt. Let's start with the Puerto Rico macros. It is actually a good market.
Speaker Change: You know, value and value creation type focus competitive. So you want to be in a market like that. It's all your
Speaker Change: Great functioning state of the United States, even though it's not formally a state. So all that good.
Speaker Change: Yeah. Good your question on you know back 21, 22 by the way the FCC had an a T N T. When we bought this business had a lot of FCC funding and that slowly you know declined over the last two three years. It fought a revenue decline.
Speaker Change: And so we do have some out of type funding, but we're putting in capital into that those projects. So in many ways great market, great macros, great competitive environment, we not too dependent on the government and the business is what it is today now what could it be would that kind of environment and by the way we have the best Mobile network here you go anywhere we have the best coverage and like I said 600, Megahood spectrum here in a couple of months will have even bigger penetration with with that spectrum. We have the best fixed network we.
Speaker Change: On a fixed network, it's one gigabyte everywhere highly competitive product and in fixed we have you know pretty much a split market 50, 50, 40, something like that with with this and the other guys, but we had we have a five handle on our market share in mobile.
Speaker Change: Okay with a lot of upside when we bought the business. It was about 26%. So we lost some share but remember even at 26% that's 74% of the island that we never served and we haven't even started our F. M. C. Here. So there's some upside and the reason we haven't done some of that because we have.
Speaker Change: Target form the management team here on monthly EBITDA and and we are focused on that and we're focused on getting the EBITDA right place as Chris pointed out earlier, it's all operations and you get EBITDA at the right place then by mid 26, you know you.
Speaker Change: You know some of the questions earlier on on a debt and that's how we're looking at it but like like Chris said this is an operational.
Speaker Change: Problem to solve both.
Speaker Change: Apart from the F. C C subsidies, which is which is you know it sounds like it's diminutive or not that big a deal at this point are you very concerned about the Trump administration withholding support you know for the economy of the island given.
Speaker Change: Maverick TR Trump can be I honestly don't know how much federal support there is to to Puerto Rico, not not an F. C C basis, but in terms of just upholding the general economy.
Speaker Change: You know, we don't see it here by the way the Governor of Puerto Rico is a strong Trump supporter I'm gonna be visiting with them here soon listen.
Speaker Change: That's a lot of things with the government that really I can't predict yeah, and I don't think anybody can they'll do what they need to do but I haven't heard anything officially or even enoughly. Other than you know rumors on the media about them.
Speaker Change: Wanting or not wanting to help Puerto Rico, we don't see that on the ground I'm here a lot and we don't see that nobody talked about it here on the ground either.
Speaker Change: So sorry, sorry, I'd try to make you play Treasury secretary or whatever thanks. Thanks.
Speaker Change: The next question is from Leonardo Curtador of Scotiabank Leonardo Your line is now open. Please go ahead.
Leonardo Curtador: Hi, Thank you for taking my questions I have two the first smirkers compensation was the 26% year over year at 34 million just wondering if you're expecting S. B C for the full year to trend in line with Q1, and if that will be some five so.
Leonardo Curtador: Shares. Additionally, my second question there was significant refinancing activity this quarter's and average foreign cost for slightly up through 6.5% from 6.2%.
Speaker Change: Medium cash interest expenses. This year comes under that it was close to 620 million last year. Thank you.
Leonardo Curtador: Yeah.
Speaker Change: Go ahead, yeah on the you know on the on the interest you know the weighted average is higher that reflects the refinancings. You know we did 3.3 billion of refinancing over the last nine months, including.
Speaker Change: Well to look at the swap portfolio. So we are hedged you know on Unfloating rate exposure and you can you can factor that in beyond just the cash interest there's an offset and then is it relates to stock.
Speaker Change: You know grants happened in in the first half of the year and I mean, what how I would look at it is you know continue to kind of you know run it out not just similar to prior years.
Speaker Change: Okay.
Speaker Change: Perfect. Thank you the important the refinancing is really the tenor and and you know the the Chris and the Treasury team have done a tremendous job pushing pushing the wall out.
Balan Nair: Any other today's question and answer a session I would like to hand back to Balan.
Balan Nair: Thank you operator, and thank you everybody on the call.
Speaker Change: The business is doing really well you can see from the numbers now we did pull guidance and I know that'll be a reaction to that but I think it's you know this is important first that when you know when we look at stuff and as soon as we know it we want to make sure our credit.
Balan Nair: To authenticate.
Balan Nair: That's been challenges in Puerto Rico business and and over the last year was very hard for us internally to predict some of the trajectory of that business, but we're getting a this is we getting a strong handle and everything here and now we see things very clearly and we see a very clear pass as well.
Balan Nair: We have to be patient and in Puerto Rico, It's gonna take time, but you can see from the rest of our businesses that was a time when Panama was not doing great, though cable and wireless the Caribbean Islands was doing great any one of our operations and we focused on it an operating wise ref.
Balan Nair: I'm really strong flywheels and I see the same thing here for Puerto Rico, Yes, we got into a jam, we're gonna get out of this jam and we're gonna really grow this business and I I'm quite positive about that so with that I want to thank you again for your support and we'll talk to Yo.
Balan Nair: [noise], ladies and gentlemen, this concludes the Liberty Latin America's first quarter 2025, Investigal as a reminder, a replay of the call will be available in the Investor Relations section of Liberty Latin America's website at W.
Balan Nair: L L. A dot com there you can also find a copy of today's presentation materials.