Liberty Latin America(US:LILA)2023-05-09 18:11Financial Data and Key Metrics Changes - The company reported consolidated revenue of $1.1 billion for Q1 2023, reflecting a $59 million increase over Q1 2022, after excluding $171 million of revenue generated by VTR in the prior year quarter [36] - Adjusted OIBDA was $407 million, resulting in a $17 million increase over Q1 2022, with a rebased growth of 4% [39] - The company targets mid- to high single-digit rebased adjusted OIBDA growth for 2023, with expectations for growth to be weighted towards the second half of the year [40] Business Line Data and Key Metrics Changes - C&W Caribbean reported $354 million in revenue for Q1, reflecting a 1% rebased decline, while adjusted OIBDA grew by 8% [41] - C&W Panama contributed $165 million in revenue and $44 million in adjusted OIBDA, reflecting 4% rebased revenue growth and 16% rebased adjusted OIBDA growth [44] - Liberty Puerto Rico's Q1 revenue was $366 million, reflecting flat year-over-year rebased growth, while adjusted OIBDA decreased by 4% compared to Q1 2022 [48][49] - Liberty Costa Rica delivered Q1 revenue of $129 million and adjusted OIBDA of $45 million, reflecting strong rebased revenue growth of 4% and rebased adjusted OIBDA growth of 28% [50] Market Data and Key Metrics Changes - The company added 65,000 subscribers across high-speed fixed Internet and mobile postpaid in Q1, with strong Internet additions led by improved performance in C&W Caribbean [6] - In Panama, Internet RGU additions showed healthy growth, with all products in Panama showing growth, particularly B2B which grew by 7% [17] - In Puerto Rico, the mobile postpaid base remained steady with low churn levels around 1% per month, while prepaid subscribers declined due to integration constraints [23] Company Strategy and Development Direction - The company is focused on integration activities in Puerto Rico, Panama, and Costa Rica, with 2023 being a key year for delivering significant value for stakeholders [8] - The company has authorized an additional $200 million for share buybacks, reflecting confidence in its capital allocation strategy [9] - The company is testing modest price increases across various markets to gauge customer response and prepare for future traditional price increases [85][88] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of economies in the Caribbean post-COVID, with expectations for continued growth in subscriber volumes and revenue [9][96] - The management team highlighted the importance of integration execution as a primary focus for both corporate and local operating teams, with the next three quarters being critical for achieving value capture goals [60] - Management noted that while competition remains, the company is well-positioned to create value through innovative products and improved cost structures [99][102] Other Important Information - The company incurred $145 million in P&E additions, representing 13% of revenue, and expects to ramp up spending over the next three quarters [52] - At the end of Q1, the company had $8 billion in total debt and $700 million in cash, with gross leverage of 4.9x and net leverage of 4.5x [55] Q&A Session Summary Question: How is the TSA migration process going in Puerto Rico? - Management indicated that the TSA migration has started and is progressing well, although there are some disruptions for customers due to older handsets not operating on the new network [65][66] Question: Are there any signs of FWA emerging in Puerto Rico or other markets? - Management noted that FWA has not taken off in their markets due to strong existing fixed networks and ubiquitous coverage, but there may be niche cases for FWA [70] Question: How sustainable are the new margin levels in Costa Rica? - Management acknowledged that some margin expansion in Costa Rica is driven by synergies that will end this year, but they remain optimistic about growth prospects [75] Question: What is the state of competition in Chile after the joint venture? - Management sees potential for mobile pricing growth in Chile, with expectations for stability in the fixed business, but acknowledges structural challenges remain [78] Question: What is the competitive landscape in the Caribbean? - Management expressed positivity about the Caribbean business, noting economic recovery and innovative FMC products driving growth [96][99]