NEW YORK, LONDON, and BERTRANGE, Luxembourg, Oct. 23, 2002 (PRIMEZONE) -- Millicom International Cellular (Nasdaq:MICC):
- 15% Annual Increase in EBITDA*, EBITDA Margin of 46% in Q3 - Quarterly Revenue of $155.8 Million(a) - 61% Annual Growth in Prepaid Minutes(a) - 15% Increase in Quarterly Revenue in Asia from Q3 2001 - 36% Increase in Quarterly EBITDA in Asia from Q3 2001 - 28% Annual Increase in Total Subscribers(a)
Financial summary for the quarters ended September 30, 2002 and 2001
Sept 30 Sept 30 Change
2002 2001
Worldwide subscribers (i)
(a) 2,823,223 2,267,810 24%
- proportional cellular 3,970,101 3,098,321 28%
- gross cellular
U.S. $ '000
Revenues(a) 155,826 147,180 6%
Operating profit before
depreciation and 71,089 61,623 15%
amortization, EBITDA(ii)*
EBITDA margin* 45.6% 41.9% -
Profit before financing, 21,449 16,876 27%
taxes and disposal of
investments
Loss for the period (72,358) (3,172) -
Loss per common MIC share (1.48) (0.06) -
(U.S.$)
Weighted average number of 48,860 48,865 -
shares (thousands)
(i)Subscriber figures represent the worldwide total number of
subscribers of cellular systems in which MIC has an ownership
interest. Subscriber figures do not include divested operations or
the subscribers of Tele2 AB, in which MIC has a 9.3% interest at
October 23,2002.
(ii) EBITDA; operating profit before interest, taxation, depreciation
and amortization, is derived by deducting cost of revenues, sales
and marketing costs, and general and administrative costs from
revenues.
(a) Excluding El Salvador and divested operations
N.B. Due to local issues in El Salvador, MIC has discontinued consolidating El Salvador on a proportional basis with effect from May 2001. All comparatives in this press release, other than those noted in the appendices, exclude divested operations and El Salvador in respect to subscribers and for financial results, up to and including EBITDA.
Marc Beuls, MIC's President and Chief Executive Officer stated: "Millicom has continued to see strong growth in subscribers during the quarter with an annual increase of 28%. During 2002 we have remained focused on marketing pre-paid services across our operations and as a result we have managed to grow pre-paid minutes by 61% in the first nine months. At the same time by increasing operating efficiency and cutting costs the cellular EBITDA margin has increased to a record 47%. We believe that Millicom will continue to maintain this strong growth trend in minutes and that we will be able gradually to increase margins so maintaining the high level of profitability across our operations. In Asia MIC achieved 15% growth in revenue and 36% growth in EBITDA, with Asia overtaking Latin America for the first time in terms of EBITDA. Cash upstreaming continued to be strong across the Group with $81 million upstreamed in the first nine months. During the summer Millicom announced the proposed sale of MIC Systems and this is now in the final stage of the bidding process with more than one interested buyer and an announcement will be made when this transaction is completed."
FINANCIAL AND OPERATING SUMMARY
Following the tragic death of Jan Hugo Stenbeck on August 19th, MIC announced the appointment of Hakan Ledin as Chairman of the Board on August 22nd 2002 and, recently, Vigo Carlund was appointed to the Board
Subscriber growth:
An annual increase in worldwide gross cellular subscribers of 28% to 3,970,101 as at September 30, 2002
An annual increase in worldwide proportional cellular subscribers of 24% to 2,823,223 as at September 30, 2002
In the third quarter of 2002 MIC added 221,827 net new gross cellular subscribers
An annual increase in proportional prepaid subscribers of 35% to 2,458,804 as at September 30, 2002
Financial highlights:
Revenue for the third quarter of 2002 was $155.8 million, an increase of 6% from the third quarter of 2001
EBITDA increased by 15% in the third quarter of 2002 to $71.1 million, from $61.6 million for the third quarter of 2001
The Group EBITDA margin was 46% in the third quarter of 2002 a quarterly record, increasing from 42% in the third quarter of 2001
Excluding the high-speed wireless data businesses, the Group EBITDA margin is 46% year-to-date and 47% in the third quarter of 2002 (both record results)
Total cellular minutes increased by 32% on an annual basis for the nine months ended September 30, 2002, with prepaid minutes increasing by 61% in the same period
$81 million has been upstreamed from operations in the first three quarters of 2002
Net operating debt reduced by $15.6 million in the quarter
On August 29 and September 25, 2002 MIC sold respectively 538,000 and 1,376,039 B shares in Tele2 AB to Industriforvaltnings AB Kinnevik
Following the exercise of an option, MIC's interest in the operation in Vietnam was reduced from 90% to 80% in August
Liberty Broadband Ltd, the high-speed wireless data business in the UK, was sold in September
MIC sold its GSM wireless telephony license in the Democratic Republic of Congo to a previous joint venture partner, Orton Investment Holdings Limited in September
REVIEW OF OPERATIONS
SUBSCRIBER GROWTH
At September 30, 2002, MIC's worldwide cellular subscriber base increased by 28% to 3,970,101 from 3,098,321 at September 30, 2001. Particularly significant annual percentage increases were recorded in Sri Lanka, Cambodia, Pakistan, Vietnam and Central America. MIC's proportional cellular subscriber base increased by 24% to 2,823,223 at September 30, 2002, from 2,267,809 at September 30, 2001.
Within the 2,823,223 proportional cellular subscribers reported at the end of the third quarter, 2,458,804 were prepaid customers, representing a 35% increase on the 1,823,487 proportional prepaid subscribers recorded at the end of September 2001. Prepaid subscribers currently represent 87% of gross reported proportional cellular subscribers. Asia and Central America recorded annual growth in pre-paid subscribers of 54% and 60% respectively.
FINANCIAL RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002
Total revenues for the three months ended September 2002 were $155.8 million. MIC's operations in Asia recorded revenue growth of 15% on an annualized basis, with Vietnam and Mauritius both producing growth of over 20% from the third quarter of 2001. Revenues for MIC Systems for the third quarter increased by 26% from the same period last year and in Africa, an increase of 25% was recorded, following the successful launch of GSM services in Ghana.
The volatile economic situation in Latin America is reflected in the 6% decrease in third quarter revenues relative to 2001. Currency weakness hides the true underlying regional performance, which approximated a 4% revenue increase. Paraguay and Bolivia saw annualized quarterly revenue reductions of 27% and 12% respectively, although, had it not been for the severe currency devaluation, Paraguay's revenues would have increased. Colombia however, reported an annualized increase in revenue of 9%. In the Central American market Guatemala and Honduras respectively produced annualized revenue increases of 11% and 9% from the third quarter of 2001.
EBITDA for the three months ended September 30, 2002 was $71.1 million, an increase of 15% from September 30, 2001. EBITDA for Asia increased by 36% in the quarter on an annualized basis reflecting the buoyancy of this market and the impact of stringent cost cutting measures. The key market of Vietnam itself growing 31% and establishing itself as the Group's largest EBITDA contributor. MIC Africa saw growth in EBITDA of 22% relative to the quarter ended September 2001, reflecting the benefit of cost cutting measures but also the rapid development of the operations in Senegal and Sierra Leone.
The positive impact of cost cutting in Latin America was reflected in the EBITDA for the region, which increased slightly from the second quarter of 2002 despite the adverse currency movement. The main contributors to EBITDA were Colombia and Honduras, which recorded increases of 20% and 21% respectively in the quarter, relative to the third quarter of 2001.
MIC Systems recorded an annualized increase in EBITDA of 59% and continued to develop strongly its high margin Interfact business.
The EBITDA margin for MIC was a record 46% for the quarter. The main regional contributor at 54% was Asia, up from 46% at the third quarter of 2001, but at 44%, Latin America's margin is holding up strongly despite regional economic difficulties.
FINANCIAL RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002
Total revenues for the nine months ended September 30, 2002 were $450 million with year-to-date revenues for Africa and Asia increasing by 14% and 9% respectively. Revenues for MIC Systems also increased by 14% relative to the nine months ended September 30, 2001. Revenues for Latin America for the same period decreased by 7%, due significantly to currency devaluations. Had exchange rates held at September 2001 levels, revenue growth for Africa, Asia and Latin America would have been approximately 21%, 10% and 5% respectively.
EBITDA for the nine months to September 2002 was $199.1 million. Most notably MIC Systems recorded a 38% increase in EBITDA for the period from the same period last year. The respective increases for Asia and Africa were 23% and 13%. All regions benefited from additional cost cutting measures. The EBITDA margin for the nine months to September 30, 2002 was 44.3%.
Had exchange rates held at September 2001 levels, Group EBITDA growth would have approximated 17%, with EBITDA growth for Asia, Africa and Latin America being 25%, 19% and 4% respectively.
Total minutes for the nine month period to September 2002 relative to the same period of 2001 showed growth of 32%. Significantly both Asia and Latin America increased at similar rates, 33% and 34% respectively. Main increases came in the pre-paid area with 61% Group-wide growth, with Asia at 74% and Latin America at 64% being the key regions.
The high-speed wireless data operations in Peru and Argentina recorded year-to-date EBITDA margins of 21% and 17% respectively.
SUBSEQUENT EVENTS
Since October 1 2002 MIC has sold 1,826,087 B-shares in Tele2 AB to Industriforvaltnings AB Kinnevik.
Millicom International Cellular S.A. is a global telecommunications investor with cellular operations in Asia, Latin America and Africa. It currently has a total of 18 cellular operations and licenses in 17 countries. The Group's cellular operations have a combined population under license (excluding Tele2) of approximately 444 million people. In addition, MIC operates the world's largest GSM clearing house, provides high-speed wireless data services in seven countries. MIC also has a 9.3% interest in Tele2 AB, the leading alternative pan-European telecommunications company offering fixed and mobile telephony, data network and Internet services to over 16 million customers in 21 countries. The Company's shares are traded on the Nasdaq Stock Market under the symbol MICC.
Visit our web site at http://www.millicom.com
CONFERENCE CALL DETAILS
A conference call to discuss the results will be held at 17:00Luxembourg time / 11:00 New York time, on Wednesday, October 23, 2002.The dial-in number is: +44 20 8781 0579 and participants should quoteMillicom International Cellular. A live audio stream of the conferencecall can also be accessed at www.millicom.com. Please dial in / log on 5minutes prior to the start of the conference call to allow time forregistration. A recording of the conference call will be available for48 hours, commencing immediately after the live call has finished, on+44 20 8288 4459, access code: 774742.
APPENDICES
Consolidated statements of profit and loss for the three months endedSeptember 30, 2002and 2001
Consolidated statements of profit and loss for the nine months endedSeptember 30, 2002 and 2001
Consolidated balance sheets as at September 30, 2002 and December 31,2001
Consolidated statements of cashflows for the nine months ended September30, 2002 and 2001
Consolidated statements of changes in shareholders' equity for the ninemonths ended September 30, 2002 and 2001
MIC quarterly analysis by region
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