Business Context and Reporting Period
Company: Millicom International Cellular S.A. (Tigo)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Six months ended June 30, 2025 (H1 2025) and Quarter ended June 30, 2025 (Q2 2025)
Filing Date: August 8, 2025
Business Overview: Millicom is a leading provider of fixed and mobile telecommunications services in Latin America, operating in Guatemala, Colombia, Panama, Honduras, Bolivia, Paraguay, El Salvador, Nicaragua, and Costa Rica.
Key Financial Metrics
| Metric (in millions USD) | H1 2025 | H1 2024 | Q2 2025 | Q2 2024 |
|---|---|---|---|---|
| Revenue | $2,746 | $2,945 | $1,372 | $1,458 |
| Operating Profit | $780 | $669 | $357 | $345 |
| Net Profit (Attributable to Owners) | $869 | $170 | $676 | $78 |
| Earnings Per Share (Basic) | $5.17 | $0.99 | $4.05 | $0.46 |
| Adjusted EBITDA | $1,277 | $1,266 | $641 | $634 |
| Equity Free Cash Flow (EFCF) | $395 | $269 | $218 | $268 |
| Net Debt | $4,655 | $5,650 | $4,655 | $5,650 |
| Leverage Ratio (Net Debt/EBITDA) | 2.18x | 2.77x | 2.18x | 2.77x |
| Cash and Cash Equivalents | $1,283 | $792 | $1,283 | $792 |
Material Changes vs. Prior Period
- Revenue Decline: Group revenue decreased 6.8% year-on-year in H1 2025 to $2.746 billion. This was primarily driven by weaker foreign exchange rates in Bolivia (55% devaluation due to IAS 21 amendment adoption), Colombia, and Paraguay. Organic service revenue growth was flat at 0.2%.
- Profit Surge: Net profit attributable to owners jumped to $869 million in H1 2025 from $170 million in H1 2024. This increase is largely attributable to a one-time gain of $604 million from the partial closing of the sale of Lati International (towers) to SBA Communications and the sale of Lati Paraguay to Atis Group.
- Cost Reduction: Operating expenses decreased 11.3% year-on-year to $838 million, driven by currency impacts and the completion of the "Everest" cost reduction project.
- Balance Sheet Strengthening: Net debt decreased by $620 million quarter-over-quarter to $4.655 billion, reducing leverage to 2.18x. Cash balances increased significantly due to infrastructure transaction proceeds ($542 million).
Guidance, Outlook, and Risks
Guidance and Outlook
- 2025 Targets: Management maintains a target of approximately $750 million in Equity Free Cash Flow (EFCF) for the full year 2025 and year-end leverage below 2.5x.
- Dividends: On August 6, 2025, the Board approved a special interim dividend of $2.50 per share, payable in two installments of $1.25 on October 15, 2025, and April 15, 2026. This is in addition to the regular quarterly dividend of $0.75 per share.
- Strategic Acquisitions: Millicom has signed definitive agreements to acquire Telefonica's operations in Uruguay ($440 million) and Ecuador ($380 million), subject to regulatory approval.
Risks and Contingencies
- Foreign Exchange Volatility: Significant devaluation in Bolivia (55% YoY) and depreciation in Colombia and Paraguay continue to impact reported results. Inflation in Bolivia reached 24.0%.
- Legal and Regulatory: The Group faces a DOJ subpoena regarding operations in Guatemala. Additionally, there are outstanding claims totaling $212 million related to the termination of the Telefonica Costa Rica acquisition in 2020, with $94 million provisioned.
- Macroeconomic Conditions: Risks include global economic instability, supply chain disruptions, and competitive pricing pressures in Latin American markets.
Investor Verification Checklist
- One-Time Gains: Verify the sustainability of the $604 million gain from infrastructure sales (Lati International/Paraguay) and its impact on the reported net profit surge.
- FX Impact: Assess the sensitivity of future earnings to continued currency devaluation in Bolivia, Colombia, and Paraguay, particularly given the adoption of IAS 21 amendments.
- Dividend Coverage: Confirm that the announced special dividend ($2.50/share) and regular dividends are fully covered by the projected $750 million EFCF target for 2025.
- Acquisition Integration: Monitor the regulatory approval status and integration costs for the pending acquisitions of Telefonica's assets in Uruguay and Ecuador.
- Legal Provisions: Review the adequacy of the $94 million provision for the Costa Rica litigation and potential exposure from the DOJ investigation in Guatemala.