Liberty Latin America Ltd. Q1 FY2024 earnings call

Management Statement and Operational Highlights

• Grew high-speed Internet and postpaid mobile basis by 45,000 subscribers in Q1.
• Repurchased about 5% of outstanding shares and a significant part of the 2024 convert, with Board authorizing $200 million buyback capacity to end 2026.
• Completed Puerto Rico mobile core and IT platform migration ahead of timeline.
• Cable & Wireless Caribbean had 3% rebased revenue growth, B2B and residential growth, and plans for further price increases and cost reductions.
• Cable & Wireless Panama saw 2% rebased revenue growth, B2B and fixed product growth, expecting subscriber add-driven improvement and price increases.
• Liberty Puerto Rico had fixed revenue growth but mobile impacted by migration and ECF withdrawal, expecting adjusted OIBDA expansion in second half.
• Liberty Costa Rica had 8% rebased revenue growth, mobile momentum, and 5G trials.
• Liberty Networks had Enterprise growth and network expansion in Central America.

Segment Performance

• Cable & Wireless Caribbean: Generated $364 million in Q1 revenue, reflecting 3% rebased growth. Adjusted OIBDA was $151 million, an 8% rebased growth. Driven by subscriber growth and ARPU increases post price hikes.
• Cable & Wireless Panama: Recorded $169 million in revenue and $57 million in adjusted OIBDA in Q1. Had 2% rebased revenue growth and 31% rebased adjusted OIBDA growth. B2B and fixed product growth drove results, with mobile impacted by prepaid losses but expecting improvement via subscriber adds.
• Liberty Puerto Rico: Q1 revenue was $327 million, a 10% rebased decline due to migration and integration costs. Adjusted OIBDA was $69 million, a 46% rebased decline. Fixed revenue grew, but mobile was hit by migration and ECF funding withdrawal.
• Liberty Costa Rica: Delivered $152 million in revenue and $58 million in adjusted OIBDA in Q1. 8% rebased revenue growth and 18% rebased adjusted OIBDA growth, driven by mobile revenue growth.
• Liberty Networks: Generated $109 million in revenue (3% rebased decline). Adjusted OIBDA margin above 50%. Enterprise grew 9% rebased, wholesale revenue steady, and expanded network in Central America.

Guidance

• Reiterated guidance for 2024-2026, with focus on $45 million monthly adjusted OIBDA in Puerto Rico's second half.
• Maintained stock buyback authorization of $200 million to end 2026.
• Anticipated adjusted OIBDA expansion in Puerto Rico's second half due to cost savings and top-line growth.

Risks

• Impact of migration and integration costs in Puerto Rico on Q1 results.
• Potential effects of Affordable Connectivity Program (ACP) shutdown in Puerto Rico, though exposure is low.
• Vendor financing impacts and one-time tax and VAT impacts from tower transaction.

Question and Answer

• Q: Break out restructuring and integration costs in Puerto Rico and context of $45 million monthly adjusted OIBDA. A: TSA costs, integration costs, and labor savings contribute. $45 million monthly target is from cost take-out, price increases, and mobile recovery.
• Q: Confirm guidance for next 3 years and prepaid dynamics in Panama. A: Guidance maintained, Panama prepaid dynamics improving with pre-to-post migration and execution of strategies.
• Q: Impact of Affordable Connectivity Program (ACP) in Puerto Rico. A: Low exposure, over 95% ACP customers already opted to stay, partial subsidy end in May but low risk.