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ITWeb Africa

Wednesday, Feb 26th

Millicom’s African EBITDA shrinks 6% year-on-year

Millicom’s African EBITDA shrinks 6% year-on-year.

Emerging market telecoms and media firm Millicom says its African revenues have grown by 14.6% year-on-year for the second quarter of 2014 but that its earnings for the period have fallen by 6% compared to the previous year.

This is according to the company second quarter results, published on Wednesday, 16 July.

Millicom operates through their brand, Tigo, in what the firm describers as “mainly high-risk, high-return markets in Latin America and Africa.”

African countries where Tigo operates includes the likes of Tanzania, Rwanda, Chad and Ghana. Millicom also has a 50% stake in Mauritius’ Emtel, but the company on Wednesday announced it is selling this share to its partner Currimjee Jeewanjee & Co.

“In Q2, I was particularly pleased to see that our African business grew strongly – up 14.6% year-on-year,” said Hans-Holger Albrecht, president and CEO, Millicom International Cellular S.A.

“We are taking market share in Africa and I expect that to continue,”said Albrecht.

Financial results from the company illustrate that its African revenues grew close on 15% to reach $244 million. In comparison, its South American market grew 14% to hit revenues of $593 million while its Central American operations grew 3% to level out at $610 million. Total revenues for the group during the period stood at $1.447 billion.

The group has further said that the double-digit revenue growth in Africa has mainly been driven by Chad, Ghana and Rwanda.

But the group’s African business shrunk 6% in terms of EBITDA (earnings before interest, taxes, depreciation, and amortisation) from $67 million in Q2 of 2013 to $63 million in Q2 of 2014.

Total EBITDA for the group also fell from $495 million in Q2 2013 to $479 million in Q2 2014.

On the subscriber front, Millicom’s fortunes are more positive as the group recorded 644,000 net mobile subscriber additions in Africa to top 22,492,000 connections on the continent. Millicom in total has 52,315,000 subscribers in all its markets.

“Most of the growth came from Africa (Tanzania in particular) and South America (Colombia notably), while the customer base in Honduras saw a net drop in subscribers due to a clean-up of the base,” says Millicom in its report.

Figures from Millicom also illustrate how its mobile Average Revenue Per User (ARPU) is falling across all its African markets in particular.

In Africa, Millicom’s ARPUs fell from $3.5 in Q1 2014 to $3.3 in Q2 2014. But in South America and Central America, Millicom’s ARPUs respectively increased in the quarter from $11.2 and $9.8 to $11.3 and $10.

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