Millicom, the international telecommunications company headquartered in Stockholm and Luxembourg, has released its 2015 Q2 figures this morning, which show a 17.8% increase in revenue, totalling $1.70 billion.

This figure excludes UNE, Group revenue of $1.43 billion, resulting in an organic growth of 9.0%. The quarter also experienced adverse currency movements that impacted growth. EBITDA was at $561 million, a margin of 32.9% and a service revenue margin of 35.7%. This excludes UNE, EBITDA of $480 million (33.6% margin); it was partly due to a reduction of Group corporate costs for the fourth consecutive quarter. Also highlighted were increased synergies identified in Colombia business (upgraded NPV from $600 million to $750 million), a strong quarter for mobile net adds (mobile customer base up 1.9 million) and a strategy refocused on monetising the Digital Lifestyle, cable expansion and profitable growth.

Latam: Revenue at $1,464 million grew by 21.7% (7.7% organic ex UNE) compared to Q2 2014 and 1.6% up on Q1 2015. EBITDA of $564 million was up 16.1% (11.1% organic ex UNE) on strong performance from Colombia, Guatemala and Bolivia. Latam EBITDA grew 1.2% sequentially. Mobile data (+37%) and Cable (+25%) were the main growth drivers respectively supported by smartphone adoption and demand for fixed broadband and DTH.

Africa: Revenue grew to $240 million, an organic growth rate of 15.3% on Q2 2014 and 2.4% up on Q1 2015. EBITDA was $52 million, a year on year fall of 17.5%, primarily on difficult trading conditions in Chad and adverse currency movement particularly in Tanzania. Excluding the currency impact, EBITDA was 1.8% lower than in the same quarter last year.

Corporate Costs: A continued reduction in the corporate costs to $55 million in Q2 compared to $59 million in Q1 and $73 million in Q2 2014: (a) Organic growth represents year-on year-growth in local currency (excludes the impact of exchange rate changes) and excludes UNE; (b) Basic EPS adjusted for non-operating items see page 14 for reconciliation

Mauricio Ramos, CEO, Millicom International Cellular S.A., talked about the comopany's good performance with a focus on profitable growth. He stated “Millicom is a growth story and in the second quarter we delivered strong underlying organic revenue and EBITDA, which rose 9.0% and 9.3% respectively. We continue to demonstrate excellent momentum within our key markets. Mobile saw growth driven by data whilst both Cable and MFS performed very strongly.

Smartphone adoption is our winning card and drives increasing levels of data usage. In this quarter, we added 1.9 million new mobile customers and we now have a total of almost 60 million mobile subscribers. Yet barely more than just over a quarter of our customers have switched to smartphones. So our prize is to continue to expand our customer base and convert customers who have yet to upgrade to smartphones and data packages.

In our fast-growing Cable business, we continue to see very positive trends in all key metrics and importantly in the adoption of multiple services per household. For example, more than half of our households now take two or three services from us. We closed Q2 with over 7.2 million homes passed and 4.9 million cable RGUs. And we have only just begun. We are swiftly seizing the opportunity to grow to 10 million homes passed in Latin America over the next three years, largely through organic growth, to become the second largest cable operator in the region.

Since joining Millicom I have been impressed by the range of Digital Lifestyle services we offer to our customers. For instance, Mobile Financial Services is another key component of our Digital Lifestyle offer, strengthening customer loyalty whilst supporting wider financial inclusion targets. In this quarter, we reached the milestone of more than ten million MFS customers.

We have some excellent businesses.  The Latin America businesses move from strength to strength; we saw strong performances from Colombia, Guatemala and Bolivia which drove another quarter of headline revenue growth. Further progress has been made in the recovery in Paraguay returning to revenue and EBITDA growth although, like many of our businesses, this was adversely affected by currency movements. 

In Africa, we focus on growing both volume and value. Underlying revenues have shown further improvements and there is positive momentum, although we saw challenging trading conditions in some markets, especially Chad where the security situation and economic condition has deteriorated. In this quarter we agreed to acquire an 85% stake in Zanzibar’s leading mobile operator, complementing our existing business. This acquisition will strengthen our overall position in Tanzania, delivering further growth prospects for the Group. We are currently awaiting regulatory approval on this transaction.

Despite strong underlying growth, there were severe foreign exchange devaluations across many of our countries and this negatively impacted our reported growth. Whilst this is a fact of life working in emerging markets, Q2 was particularly severe, reducing like for like revenue growth by more than 10%.  We are taking firm actions to mitigate the impact of the currency fluctuations by continuing to focus on operational efficiencies and tightly managing the Group’s margins, which is why we were still able to post positive like for like EBITDA growth despite the currency impact on our revenues. We have also continued our focus on reducing corporate costs, which fell for the fourth consecutive quarter.

Having completed my first 100 days as CEO I am convinced we are on the right track. The Digital Lifestyle is a great concept and we have articulated it further by more clearly defining an inspiring vision: to empower our customers to advance and enjoy life.  We have mapped out a clear and detailed operational strategy for how we will achieve our goals, converting potential into profits and increasing the cash flow.

We now have a roadmap to focus on two phases of opportunity in our fast growth emerging markets; building customer focused mobile products and services that can be monetised; and expanding our cable footprint to capture the emerging opportunity.

Our strong and improving business performance demonstrated in this period and throughout the first half of the year is testament to the drive and commitment of our people.

Millicom couldn’t be better placed to provide every aspects of the Digital Lifestyle to our customers who have an ever-expanding appetite and enjoyment of innovative mobile, social and content services. This opportunity, combined with our clear strategic plan to build and monetise the Digital Lifestyle, will deliver profitable growth. We have the firm foundations in place to continue to deliver customer and shareholder value.”