Earnings call transcript Q2 2023

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Today's call is being recorded. I'll now turn the call over to Steven Price, Country Manager of Jamaica.

Stephen Price

Good morning, and welcome to Liberty Latin America's Second Quarter 2023 Investor Call. At this time, all participants are in listen mode only. can America's under website materials of Investors presentation Latin Liberty at formal be the found section Today's www.lla.com.

Following be today's given will for a formal question-and-answer session. presentation, instructions

available being As website. and a call Investors is reminder, will of this be under our the section recorded

implied results may those statements, are including these not and by to outlook expectations respect the that expressed include forward-looking remarks and growth statements prospects company's may historical future its from and Today's differ or Actual materially with fact. statements. other information

For update please in to on in statements risk any Liberty with quarterly any based. press to reflect most expectations information the Latin and along its such reports SEC, any is XX-Q report the XX-K more forward-looking conditions Latin filed release. statement obligation associated Liberty on recently refer information, change the factors or in filed America or the on disclaims Form America's discussed most information Form which or with the recently to any

In GAAP accessible addition, are of most presentation, appendices is refer this the to Investors reconciled the can to this measures comparable will non-GAAP to financial our certain measures, found in website. which which which be the call, section under financial on we

to I Mr. Balan over would Nair. now turn to like call the our CEO,

Balan Nair

your segment. performance. our to get reporting Thank the company's highlights by and of to welcome, we quarter of After questions. follow Noyes, Liberty with operating with everyone, that, will I'll will you, then results begin group review and results an Stephen, Latin our financial America's straight presentation. a second our CFO, overview Chris

the contribute prepared executive I during my Q&A as region, and to our invite always, As will am I by following team the needed them remarks. from joined across

slides, can which As both of on working at website we will find you www.lla.com. our housekeeping, from be a point

XX,XXX highlights momentum in subscribers with and mobile second continued another for adding on and quarter; postpaid, broadband base. Starting the we quarter solid X our to Slide our our operational

Another Panama. solid X in increase year. in & both performance of penetration the FMC by Wireless, half & Jamaica percentage Cable positive Wireless Caribbean, are The on of driven the and especially in Cable first Panama a in focus quarter results with point and in Jamaica our

We in one growth in American among fixed grower are the the operators. leading top and and of RGUs LatAm broadband North

QX a by our This some operators by of representing We have reach 'XX, of of end the are We QX X% OIBDA telecom year-over-year reported this Sequentially, $XXX revenue our XX% the currently as X% the [ph] percentage our adjusted growth, ready, of discussed X also quarter. the financial the substantial is the business made numbers goal a progress for These with XX%, year-over-year last best XX% year. adjusting for underpinned the in the home by quarter. slightly pass is initiative. increase positive reflecting gig OIBDA negative group, for to point transit margin the among of increase. rebased grew base momentum. of Giga versus and discontinuation quarter adjusted million are

margin and OIBDA now the as by with shown OIBDA at operating is revenue our addition, XX%, In growth. leverage,

by year, reduced significant the in million below balance made bond the outstanding currently the million quarter convertible $XXX quarter. buyback, equity our $XX the We and of beginning our shares and $XXX forward million. of with equity steps across repurchasing the Since have in convert we amount repurchased

Rico, well. work In to Rica Puerto Puerto has forward continued integration our Rico progressing and mobile close with finalize operational. our core and Finally, XG stack new Panama move IT and Costa are to now

first have postpaid of migrating base, the the prepaid started we We migrated XX,XXX have X/X already customers, customers. representing and

with leading global for Ericsson the to and Salesforce create We cutting-edge market. infrastructure suppliers are working as such

solid The operating performance. our begin Wireless, segment's QX QX, Caribbean. in our this of continuing supporting rebound the Turning to I'll in we continued X. and trend Slide with observed tourism review in islands & Cable

slide, we contributor an Jamaica. and additions. XX%. of Internet of of left The the display mobile increase On our was X,XXX the nearly positively compared main postpaid Internet year-over-year, representing additions

growth landed on in However, strategic fruit. of bearing product market by good mobile, price Jamaica Bahamas the percentage The markets, is implemented terms performance mobile fastest-growing was with the increases XX% which X% quarter FMC mainly and is sequentially adds with well, postpaid continued material in no impact XX,XXX we fixed in to driven with and have subscriber year. the focus postpaid as Across planned since several churn. and beginning this

center this chart and the Organic higher. growth would fix, basis driven FMC our revenue fixed & the XXX to the consumer with have and rebased Wireless and been the the BXB Mobile. higher largest product; by volume the subscription increased quarter. revenue, revenue by by well-diversified for followed points sequential slide in revenue both flat revenue, driven growth by ARPU. mobile was nature of and discontinuation Cable of of penetration. Year-over-year, Moving Consumer and elements subscription reported pie growth in We business, mobile fixed from Adjusting transit both was the depicts here Caribbean's benefiting the

RGU year. Moving segment. with QX versus the higher slide; XX% our X prior Panama adds the on in were to in left Slide of and Starting C&W Internet the line

the and strategy year, base our beginning we delivered mobile, of as since on momentum. focusing supporting high-value our subscriber and increase of In a losses financial lower were modest in is yielding Our is prepaid the base results postpaid prepaid year-over-year. positive postpaid up sequentially X% and

X% revenue bundles. the fixed high ARPU and and contracting strong respectively. higher BXB recorded supported by our the by QX, both rebased by Growth but one BXB. product growth in increases Fix product. broadband driven posting fixed by in area, center positive the to plans year-over-year, in is revenue rebased momentum and second Panama, largest our was of X% of P -- and following customers the higher-tier the fastest-growing Moving of smallest and the mobile slide products quarter, revenue are revenue In

decommissioning we levels acquisition recharge on-track network and end are copper and Panama are in and the usage progress in we making for have improved our year. We to in and catch completed prepaid lower saw this good In discounts post. by next of also mobile,

Finally, outlined the right the slide. in of lower integration to update our

We operations. QX planning Claro integration network integration coverage. expand The focus are good implementing of the our and making defining modernize Panama's and client infrastructure in strategy progress and was capacity and with our migration to

are also track Given these growth which deliver our our objectives, half. with synergy we progress on the underpins in second initiatives, to

This increases the X of March Slide single largest we well reported to market. left on our Liberty fiber strong Internet our our and year, service X%. landed reliability by about at a quarter Since is increased and our network investments with stable Next fiber-to-the-home. to the testament we Rico, as XX%. our of homes last churn price slide; in QX another customer Puerto Starting by adds underpinned

our X.X. addition, our speed using across In and of take majority HFC successfully DOCSIS our footprint gigabit X upgrades rate have exceeded The launched we expectations.

Turning to mobile. while similar stayed in prepaid. losses Sequentially, flat, experienced of our base relatively we level postpaid a

market will enable we hard and stilts bundles Beatport platforms this market. for We the commercial as launch the offering through completed. plan value the and our Puerto USVI to migrations us custom to effective are phase. with working of We transitional soon and a in in are In specifically our are partners, revamp customer-centric as build customer prepaid FMC that Rico regard more propositions be help postpaid strategy to

XX%. the slide; at of center total under Consumer This the the in XX% followed to fixed In is sequentially. of fixed was our our X% Rico, Moving of driven steady X/X Puerto revenue. Mobile by BXB and by with Mobile revenue broadband product our up in subscription representing flat this largest year-over-year, revenue base. remained our just is growth business, QX,

However, it was year-over-year. lower

are to our update the new migrate our slide, to right we on Finally, platforms. continuing to prepaid lower integration our of the customers

the will customers coming bring just side, have On and of months. ramp the in batches migration first started and weeks our postpaid up rate the we across to

are We integration the Apple partners, AT&T and end finalize of year. by with expect closely and the working to including

first However, being are foremost complex, we priority. clearly customer proceeding and the experience with is process a and

our following May. left mobile, recorded quarter, Rica. prepaid latest our reconfirm remained market subscriber QX a postpaid price of Slide the in in report on slide, points strong a with postpaid in share X Turning Costa In to the share we flat and with strategy. percentage to we increase migration versus small XX% base to Liberty postpaid churn in additions the the regulator increase fixed According in Starting market by X XXXX, by driven increasing our of broadly the leadership XXXX. with

operations. of center XX% followed just slide; is but fixed fast-growing largest close to and the the our our Moving This is share of product over small business, representing BXB revenue. consumer Mobile XX% Consumer a by then to with

be to lower to integration of the in Finally, integration continue track. right slide, our the activities update on

million We year. target TSA rate our by of the expect the end run hit the $XX roll to synergy off and of

from are competitive and new on brand the segment. our innovation, from to our fresh Finally, of enterprise, single which announce successfully brand QX, of Slide edge Starting across The we and look C&W the slide, reliability scale completed with the in providing foundations performance creative across to Network I segments. to am wholesale in messaging growth on consistency its Networks that potential. pleased and networks, and rebranding a left-hand base X our Liberty Liberty side multiple centricity, customer

industry hello Caribbean, in this inaugural year our We segment discussed event are XXX and and this of leaders LatAm customers, in topics earlier with region impact technology global and the AI as fintech and thought driving disruption. such -- Top we in where hot the Linx Mexico leadership the

on the high capacity half, and growth, and segment's the and for CapEx of conversion. flow X% by low requirements wholesale Running increases accounting and the sales. side X/X new capacity slide; in enterprise driven through customers of revenue existing mainly Steady wholesale the U.S. our revenue mostly the upselling underpins highlights delivered cash dollar-denominated right-hand first growth

relation in multi-ring networks remains in for to reliability. differentiating region factor Our other unique synonym infrastructure a and a the

cross driven remaining enterprise, On higher active by a churn revenue services. of value-added increase, for representing the upselling right, connectivity, and quarter posted our demand XX% management of the and bottom

come. cash rebranding, to finalization another and our its from the progress move projects months a solid new solid in commercial free half anticipate our of to we quarter pipeline and of QX generation. expect Following as was perspective. integration we in more greater convert operational And the our flow customers drive to year the we Overall, second

to through program. our value plan shareholders delivering also our to buyback equity continue We

pass Financial before financial I'll that, we Chris questions. Noyes, through you to your Officer, Chris? you take With talk Chief who our will our performance over

Christopher Noyes

financial I'll Balan. our through in performance of on XX. the side take Slide now with greater Thanks, detail, starting you performance sequential left-hand our

progress. a adjusted business Panamanian our had in feeling on in and quarter U.S. basis have revenue reported OIBDA second step-up QX grew the good by and X% the by we with to XX% as operating momentum dollars, Sequentially, integration our compared as

all performance, to sequential HX improved growth. to OIBDA of our look segments we As contributed adjusted

to year-over-year side on the performance right-hand of slide. the Moving

As our reminder, a start deconsolidated of we at the QX Chilean XXXX. business

of include our So reported results XXXX in not the results ETR. do operating

Additionally, Panama, results QX. them XXXX include began of do as results Claro but not in our consolidation the QX XXXX last year's in we include

moving a revenue stable but with performance on pieces, rebased X% So OIBDA. overall, number a solid of growth adjusted and

revenue next a As QX basis grown for XXXX, which will Caribbean noncore discontinue QX on by was revenue of and legacy QX the rebased mentioned X% year-over-year. by we move 'XX this, have decision each transit million have reported quarter, BXB Adjusting was impacted similar of business for year. start QX impact and accounting $XX to in in a our lapping last voice about quarterly until would C&W revenue a arrangement

For the for full LLA. continue adjusted we single-digit target growth rebased OIBDA mid- high to to XXXX, year

higher $XXX rebased XX impact in $XXX year the Adjusting OIBDA, revenue rebased resulting of an period, of reflecting the our X% segment million growth. in reported results. in flat a QX, prior on been would Beginning basis. have X% adjusted the Caribbean, Slide C&W we with and transit million revenue highlights performance for left on

Our of expansion through higher roaming. was residential service growth and mobile postpaid revenue led primary with inbound our efforts by driver

over XXX across and including quarter. We strong our basis XX%, quarter the adjusted margin more operating OIBDA than with the higher many leverage islands. year Our programming rebased prior direct costs, lower fueled than improved growth finished of by largely was points a

Panama rebased Moving residential driven Panama, to grew X% contributed and line we value $XXX reflecting from growth Wireless rebased growth revenue Claro by adjusted OIBDA XX% revenue strongly Cable OIBDA in and $XX as and million adjusted million & Rebased captured CWP of fixed BXB. QX top of growth. was Adjusted in OIBDA the QX, integration.

by Turning a our in growth a we we rebased services. managed million to and driven Liberty growth within was revenue for recognized connectivity reported basis, X% enterprise-related and rebased growth on Networks; across revenue rebased in significant middle strong column, operations wholesale or adjusted $XX decline. the Year-over-year is $XXX generated a OIBDA customer million X% that while cash

OIBDA Balan costs. in part year-over-year decline experienced highlighted, software and due licenses increased lower capitalizable adjusted to As as rebased a cost higher

Importantly, for our cash a our adjusted the robust OIBDA very margin flow was margin free operating stood and revenue. above XX% quarter, at XX% of

seasonality to roaming was ARPU in QX levels decline lowered the Rico our robust, be back past continued from year-over-year due rebased reduction a to by increases impacted over by in X%. gains continued factors. right; decreased revenue were Puerto Mobile Residential mobile to Sequentially, lower revenue on was while equipment mobile and a March. Residential million, ARPU, revenue, Liberty prepaid subsidy the Second equipment lower driven delivering in the and volume growth subsidies in as part XX implemented decline price $XXX and reduced lower be fixed sales total months sales a of revenue stable, service reflecting and year-over-year subscribers. of

Adjusted quarters perspective is we OIBDA contributed decline million consumer in and a around and period bulk we from X% a the critical decline migration this the an increased next us as AT&T, migration the over next the activity service year-over-year anticipate the operating are QX for as the as of costs over occur we to to months. including to cut from to second several look X which HX expected QX and integration in costs. from in as mobile The decline, increased $XXX several reflected factors We of revenue delivered XXXX. higher aforementioned rebased compared quarter,

Wrapping year-over-year up of Revenue we $XX was growth million reflecting performance on significantly retention of lower caused we of expanded Rican ARPU U.S. and OIBDA with costs declines the ARPU adjusted discounts by delivered revenue in impacted $XXX OIBDA of X% year-over-year, revenue rebased strengthening million, and the integration Adjusted dollar higher benefiting as Costa right, rebased spend far colon QX adjusted in to XX%. have declines from dollars. OIBDA of certain by the increased U.S. Rica a Costa decline in plans. and and denominated the

our Caribbean revenue. to XXX,XXX. results P&E year reiterates of led Slide and additions quarter, figure second In incurred additions and and we We our million our FCF XX half taking the $XXX homes and/or the highlights P&E outlook. quarter, Panama, by FCF or the upgraded built for in XXXX in adjusted XX,XXX of over XX% activity

build program, are year. on of part copper track the and As also are our to upgrade decommissioning and by new of this we complete plant end next

in During the HX. quarter, and CapEx integration and we elevated incurred about throughout remain $X million of Puerto integration to CapEx Panama mainly expect Rico

Finally, year-to-date, CapEx we track revenue. XX% target remain was percentage of and our a to deliver of XXXX our on as revenue XX%, of

free we partners adjusted flow, quarter where In local of markets our terms in million to distributions XXX% the of $XX not before cash we million certain $XX in own do or businesses. posted

government partners to $XX Our Panama of distributions Bahamas. our went in and million

in of we progress the for million meeting this year full and continue guidance to our Our approximately improvement QX, half pre-distributions. expect $XXX second towards QX from cash represents an flow we as

flows given been will us the capital typical continue to QX, heavily and last QX performance adjusted over for has strong Our swings. to working OIBDA cash favorable weighted XXXX years, be as

a or interest result lines. Turning of Important rates. to long our $X of end beyond that of liquidity sheet, due QX for our to and in fixed interest with fixed $X significant structure million availability and is and debt, the maturity The coupled under balance the a debt billion we our XXXX revolving robust stack XX% XX% capital group. Slide features At on in consolidated cash XX. has over of of credit total of had $XXX basis, note billion

reducing good first made the progress have in levels we leverage, of half. terms In

have growth, net from June continuing X.Xx principally equity. OIBDA adjusted to reduced aggressively X.Xx at Through also while year-end our to leverage consolidated we at XX, our repurchase

our slide, growth OIBDA should expansion repurchase coming over adjusted of In our leverage convertible right over and the cash it Continued flow ratio time. the net further shows bottom free the and activity quarters. improve equity

rate, $XXX in This facilitated borrowings purchases in convert includes QX we The million in highlighted repurchased Balan were QX. at par. reduce the combined to our QX to as $XXX million to to balance a able X.X% attractive repurchase outstanding compelling have further $XX $XX we HX, at fixed Since million been and million. applied million, discounts proceeds quarter end, a convert by in below the earlier. X-year -- we the In $XXX and

to Moving and our slide the final remarks. closing

top Internet to business the and building postpaid while execution executed also We with growth, in both operating continue further good BXB Integration our corporate progression. of in and for focus markets our local broadband focus add volume teams. key have a should our areas price continues be quarter. second Selective in subscribers increases strategic form line for together a foundation and been to mobile, primary

are number seek to a a in across reporting as projects We next our goals period deliver key to call. and we of reaching the forward capture value earnings further progress look

capital to both significantly second opportunities notes were pricing us deploy of accretive our thought and our the capital. equity quarter we market provided allocation; activity Turning equity what to the as excess in increased we highly convertible with

We will adjusted adjusted delivering HX. free these continue we cash CapEx in to confident we evaluate in finally, flow our progress remain and XXXX. on for targets And OIBDA, as opportunities

it operator, for that, please questions. up With open

Operator

[Operator comes Instructions] first from Tomita today question Goldman from The Vitor Sachs.

Vitor Tomita

Two questions from our side.

you second The any that that a seems Rico. cites be handset subsidy Puerto give strategic over to cash adjusted some regarding on earnings on shift me reduction in results handset on it? And free in factor Could is and would been one drivers for have question first significant color The release a levels there. subsidies flow.

on to QX. it seasonality, color just seasonality and in could comes give a working capital you benefiting more the particular, bit drivers If us when

Balan Nair

questions. the for Thanks

to who jump Puerto first as Rico, So one Naji our operations runs here ask in well, the and there. on I'll

levels of got see significant handsets the Puerto the of as year, year, subsidy of we you from towards was As we've Rico in well. probably U.S.A., promotional kind In year it, experimenting of with second around that send the we now bled analyzing which and of of first the activity been and looked as actually subsidies, of around going been different retention. the the half the We've results. demographic the levels. handset slightly our to the And on playing first promotional at that the can than mostly mostly into end subsidy the reduced there of kind activity in we've half year studying the plans and kind repeat is in our we've last with mainland to subsidies. numbers fine-tune kind half be And

also like you Verizon mainland, levels a little the bit. decline the starting seem Timo quarter, see are can AT&T, from it as But the to would results for the [ph] second subsidy

You've ridiculous to of got levels towards some year. end the last

so more on And be going it. to we're nimble

want to you And add Naji, any that. comments more maybe if to

Naji Khoury

Thank part have and promotion you. The to is that our higher-end end. providing the the of the lot add comment to plan pool only shifted promotion of optimizing less I lower would we a subsidy, of

to allowed the able move dynamic well change to mentioned, the strategic enter for that us of manage will So approaching as as end be HX, the subsidies. sure. that But year, before Joan we

Balan Nair

first you you've like in and the first the jump here think, then in as that vendors I'll the capital on flow, a well. lot working to itself the Thanks, half kind in of lot the Naji. second a you reversals And costs I there's in half. half, of cash reverses the second in that half Chris But of because usually, got hit pay ask free to

[ph]. want more little maybe color to bit Chris, give you a

Christopher Noyes

be Certainly, addition, of to collections strong QX. the in kind And CapEx in of in what end tend large of weighted expense the towards would key lowest of our later I fourth number the mean fairly said, and be And tends for the of a of in kind is also couple point, Balan last factors. us year. of accounts say the OIBDA a QX I to Interest happen year. year. the to tends the other quarter adjusted Marin

of first the trade So part when in one. that into working year the rolls capital

the factors. the been be if years. cash the look several you over years, back the would has those for for But us So sort of really generative QX quarter

Vitor Tomita

Thanks, Chris.

Operator

from New Soomit from next The comes Research. Street Datta question

Soomit Datta

from couple me, a Just please.

the confirm contributed First on can that been case. there has this cash into that It of all, the quarter? Chile, doesn't no you JV appear is

infer was Panama, How the running question, in on have far? of How think synergy funding full was, be And how for $XX see about from announced that that I US$XXX equity is much like, then really future would Is much first assume of come of in you of good JV. Should the context can And That run anything as guidance, market is we through the which And we've on year? million much that got please. million. so nothing coming Liberty? there expectations? of broadly more which the round, we rate if recently can of ahead And profitability, half ownership you secondly, more highlighted. that this the seen a so around second basis. we the we

Balan Nair

convent Soomit, some thanks. of confirm that not mostly to that. -- But be can disclosing, that can't be of and at we cash down sitting see the -- with any most the other it's business. will you in business remains that say, can XX-XX, the in equity from involved format are as later, quite we Chile, And did, we point partners you in the reporting we we it. on that we ownership put contributions our did In

role On some the you continue came just big larger. of we and rest it it, contribute out contribute came they'll will synergies or than a even it's we XX%, to more not what but like reported, of the look become the year synergies that margin in XX%, on, and But synergies worked expansion efficiencies and really where Panama from. part, that if this hard XXXX it at the played that's is from to savings

the so. we're migration in the next actually or As closures, days store full we doing XX a network customer migration, finish

of is good our a a got And to work But really good more and ground. the also expansion that really on happening, in we've lot one there. teams the in lot is harvest operating margins more news so activity by

Soomit Datta

Okay, great.

So like sort ahead the guided of incremental sounds synergies? it of there's savings to

Balan Nair

Yes.

Operator

question next Andres comes from Scotiabank. The from Coello

Andres Coello

follow-up Chile. question on a the on Just

there the I be press release is what injection that [indiscernible] So that. Chile a you XX% cash will in [ph], and million understood €XXX between from America will and of pay that

that? So something to is to like €XXX EPR? there is contributing it different Or million

Balan Nair

So the at not published, the that share put contribution a it. the €XXX but other we you million is can way equity I the conclusion contribution this business. paper. not did numbers that's is it to I And And from look that our the put probably of contribution been into additional debt to an is just in think release, look think if our the piece come you that is at

definitive I couple gives that suspect the the a side. understand especially look in And be years, the to ratings. on so operating next to it, take everybody chance both it, And at of more a business, on it, contribute study we'll

Operator

Instructions] next question Benchmark. The [Operator comes Matthew Harrigan from from

Matthew Harrigan

I I think answered. know some has is hot your one were new I in-house. of questions in know my in for top PCs there. to that you prefer loves potential But things is venture venture bed nonetheless, exactly is billion there created weren't and it value plus activity the on invest incubated Europe Mexico. not Chile $X in Latin America over a about sister company side. But the of

have I TMT infrastructure they're clearly, it's from initiatives small, number various lot number X. know or thought interesting that And to you of think was point -- I but a in it an I and advance. X benefit

Balan Nair

Sure.

makes -- me in You I let a this that see way answer if sense.

that venture to couple could mostly very made to investments, us. have of beneficial We support small be start-ups a

some made is used but a them and a So we the business finish made we provide to to we story It's alternative a technologies can that access would in think It's driver But part this for core our interesting in a investments where them energy, don't notate and that. growth our separate and region, development, growth -- us. this we in need as wireless there's for of consider fixed at really relatively or we look support be small. driver. unit, funding investments they're not and

Our It fixed try is going to is what are we and in broadband, mobile, communications. to business in stay it in we're to at. very really is close good

Matthew Harrigan

because for content that say, a departure is really leveraging considerable would to last infrastructure, bucket in your needless assume? existing the be probably invest I And you'd

Balan Nair

would a that good be think very I very, assumption.

Matthew Harrigan

Okay. Appreciate it.

Operator

will I'd back That conclude for Balan like or today's session. additional to hand any remarks. question-and-answer closing to

Balan Nair

everybody, Thank you, morning operator, thanks, our taking the time call. on and this for

we over last And can progress. top as you I we first You and have I suspect, are see be even here a should And years half at the neighbourhood, making the more of think exciting look few the path therapy second good now. the than half.

Have a So thank your great you so support. day. for much

Operator

XXXX this investor Latin second call. Liberty America's quarter gentlemen, concludes and Ladies

reminder, will you the Investor section today's Liberty available As of materials. call of be America's website at presentation also Latin Relations the can find a There of a copy replay a in www.lla.com.

disconnect now your may You lines.

Liberty Latin America (LILA) 9 Aug 232023 Q2 Earnings call transcript