Liberty Latin America(LILA) - 2020 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported Q4 revenue of $1.1 billion, including $174 million from Liberty Mobile, compared to $975 million for Q4 2019, reflecting a modest 1% year-over-year rebased decline [47] - For the full year, revenue was $3.8 billion, representing an annually rebased decline of 3% [47] - Adjusted OIBDA for Q4 was $428 million, a 4% rebased decline, while the full year adjusted OIBDA was $1.5 billion, a 2% rebased decline [48] Business Line Data and Key Metrics Changes - In the Cable & Wireless Caribbean & Networks segment, Q4 revenue was $428 million, with a 4% year-over-year decline, while adjusted OIBDA was $182 million, reflecting a 10% decline [53] - The new segment, Cable & Wireless Panama, reported Q4 revenue of $131 million and adjusted OIBDA of $51 million, both down 19% and 13% year-over-year respectively [55] - VTR in Chile and Cabletica in Costa Rica reported Q4 revenue of $244 million, a 3% rebased decline, with adjusted OIBDA of $89 million, down 15% year-over-year [57] Market Data and Key Metrics Changes - Liberty Puerto Rico had a strong Q4 with $296 million in revenue and $116 million in adjusted OIBDA, achieving double-digit rebase growth rates [59] - The broadband base in Puerto Rico grew by nearly a quarter in 2020, significantly outperforming competitors like Charter and Comcast [34] Company Strategy and Development Direction - The company plans to build approximately 600,000 homes in 2021, a substantial increase over 2020, focusing on fiber-to-the-home technology [50][42] - The strategic focus for 2021 includes recovering and growing across markets, product innovation, and expanding broadband penetration [41][42] - The company is also focused on integrating the assets acquired from AT&T and closing the acquisition of Telefónica's Costa Rica business [44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovery in 2021, despite ongoing challenges from COVID-19, and highlighted the importance of cash collection and cost management [119] - The company anticipates generating approximately $200 million in adjusted free cash flow in 2021, representing a more than 30% increase over 2020 [51][72] Other Important Information - The company reported total debt of $8.5 billion and cash of $900 million at year-end, with no significant maturities over the next five years [64][66] - The integration of Liberty Mobile is expected to incur operating costs of $35 million to $40 million and CapEx of $25 million to $30 million in 2021 [62] Q&A Session Summary Question: Update on subsea business and Panama structure change - Management highlighted the subsea business as a strong OIBDA generator with $400 million in revenue and expressed excitement about the Panama market, emphasizing the need for focused management [76][77] Question: Overall strategy and geographic evolution - Management is pleased with current geographic presence and sees growth opportunities in broadband and B2B sectors, with a focus on network expansion and margin improvement [81][82] Question: Chile expansion and home penetration - Management noted promising opportunities in Chile, particularly in underserved neighborhoods, and plans to continue building fiber-to-the-home [87][89] Question: Puerto Rico OIBDA annualization - Management advised against annualizing the two months of Liberty Mobile contribution, citing the need for integration costs and standalone operational expenses [91] Question: Mobile consolidation in Panama and M&A strategy - Management remains optimistic about mobile consolidation in Panama but noted challenges in convincing sellers to agree on reasonable prices [102] Question: Strategic value of subsea business - Management acknowledged the subsea business as a strategic asset with significant growth potential and plans to provide clearer visibility on its value [114]