Liberty Latin America Reports First Quarter 2021 Results

Rhea-AI Summary

Liberty Latin America Ltd. (NASDAQ: LILA, LILAK, OTC Link: LILAB) announced its Q1 2021 results, reporting $1.2 billion in revenue, a 25% increase year-over-year. The company added 76,000 RGUs, a 25% increase from last year, driven by strong performance in Puerto Rico and mobile operations. Adjusted OIBDA rose 23% to $449 million, with operating income reaching $178 million. The company successfully refinanced over $1 billion in debt, enhancing financial stability. Despite ongoing pandemic challenges, LLA anticipates improved regional conditions as vaccinations increase.

Positive

• 76,000 RGU additions in Q1, a 25% increase YoY.
• $1.2 billion in revenue, up 25% YoY.
• Adjusted OIBDA growth of 23%, reaching $449 million.
• Operating income doubled to $178 million YoY.
• Successful refinancing of over $1 billion in debt, improving leverage.

Negative

• Continued adverse impact of COVID-19 on mobile and B2B operations.
• Revenue declines in C&W Panama and VTR segments.
• Challenges in tourism and government restrictions affecting growth.

Liberty Latin America Ltd. (“Liberty Latin America” or “LLA”) (NASDAQ: LILA and LILAK, OTC Link: LILAB) today announced its financial and operating results for the three months (“Q1”) ended March 31, 2021.

CEO Balan Nair commented, “We had a strong start to the year as our focus on volume resulted in record Q1 RGU additions of 76,000, over 25% higher than the prior year, as well as continued recovery in our mobile operations. Overall, our markets are beginning to recover from the worst impacts of the pandemic, however, the operating environment remains challenging given reduced tourism and government imposed lockdowns and restrictions continuing during the quarter.”

“Fixed subscribers grew across all of our markets, with particularly strong performance in Puerto Rico where we maintained momentum from 2020 and saw close to three times as many RGU additions in the first quarter as compared to the prior-year period. There remains a significant broadband penetration opportunity across our region and during the first quarter we added or upgraded approximately 130,000 homes using fiber technologies to bring high-speed connectivity to more customers. Mobile additions were also particularly strong for the first quarter, driven by over 60,000 adds in Panama.”

“We reported $1.2 billion in revenue, $178 million of operating income and $449 million in Adjusted OIBDA in the first quarter. Despite the ongoing impact of the pandemic on our financial performance, particularly across our mobile and B2B operations, we delivered rebased Adjusted OIBDA growth of 3%, our strongest result in a year. Furthermore, we had a record Q1 in terms of cash flow from operations and Adjusted Free Cash Flow, posting $204 million and $58 million, respectively.”

“As part of our proactive balance sheet management, we successfully refinanced over $1 billion of our debt across Puerto Rico and Chile in March. These financings improved our average debt tenor, reduced our borrowing costs, and added $250 million of incremental capital to our corporate balance sheet.”

“Overall, we started the year well and anticipate that the regional operating environment will improve as vaccination rates increase and local economies recover in the coming months and quarters. In addition to our organic growth opportunities, we continue to drive the integration of AT&T's Puerto Rico and USVI operations and are working towards a summer completion of the acquisition of Telefónica's Costa Rica assets.”

Business Highlights

• C&W Caribbean & Networks: strong operating and improving sequential financial results
  • Record Q1 additions of 28,000 RGUs, up 12% YoY, driven by broadband
  • Continued mobile recovery with Q1 additions higher YoY, led by Jamaica
• C&W Panama: resilient operating metrics
  • Robust RGU additions of 10,000 and record Q1 mobile subscriber additions of 61,000
  • Investing in fixed connectivity opportunity, added / upgraded over 20,000 homes
• Liberty Puerto Rico: strong start to year; first full quarter including Liberty Mobile
  • Continued broadband demand drove record Q1 RGU additions of 25,000
  • Strong reported and rebased Adj. OIBDA growth of 197% and 26%, respectively
• VTR: COVID-19 mobility restrictions and 2020 subscriber losses set up challenging start to year
  • Improved subscriber results in Q1, RGU adds following two consecutive quarters of loss
  • Added over 75,000 new build / upgraded homes in the quarter
• Cabletica: positive opening to 2021 with continued growth in subscribers and financial results
  • RGU additions 9% higher YoY, driven by broadband
  • Reported and rebased Adj. OIBDA growth of 6% and 14%, respectively

Organizational Update

As a result of organizational changes during the first quarter of 2021, VTR and Cabletica are now separate operating and reportable segments. Accordingly, as of March 31, 2021, our reportable segments are as follows:

• C&W Caribbean & Networks
• C&W Panama
• Liberty Puerto Rico
• VTR
• Cabletica

Additional information, including historic quarterly revenue, adjusted OIBDA and P&E additions under our updated reporting segments, can be found on our website at https://www.lla.com/investors.

Financial and Operating Highlights

Financial Highlights		Q1 2021				Q1 2020				YoY Growth			YoY Rebase Growth1
(USD in millions)
Revenue		$	1,160			$	931			25	%		—	%
Adjusted OIBDA2		$	449			$	364			23	%		3	%
Operating income		$	178			$	108			65	%
Property & equipment additions		$	152			$	133			15	%
As a percentage of revenue		13.1		%		14.3		%
Adjusted FCF3		$	58			$	(49)
Cash provided by operating activities		$	204			$	115
Cash used by investing activities		$	(126)			$	(147)
Cash provided by financing activities		$	333			$	455

Operating Highlights4		Q1 2021				Q1 2020				YoY Growth			YoY FX-Neutral Growth5
Total Customers		3,217,400				3,177,900				1	%
Organic customer adds		12,800				31,100
Total RGUs		6,262,300				6,101,600				3	%
Organic RGU adds		76,000				60,000
Broadband		34,000				48,400
Video		6,100				4,600
Telephony		35,900				7,000
Mobile subscribers*		4,506,200				3,619,800				24	%
Organic mobile adds (losses)		54,900				(38,700)
Fixed ARPU		$	49.58			$	47.61			4	%		1	%
Mobile ARPU		$	19.51			$	12.60			55	%		55	%

* Q1 2021 figure includes 1,020,700 mobile subscribers related to operations in Puerto Rico and USVI. These operations were acquired on October 31, 2020 and therefore not included in Q1 2020 subscriber data.

Revenue Highlights

The following table presents (i) revenue of each of our segments and corporate operations for the periods indicated, and (ii) the percentage change from period-to-period on both a reported and rebased basis:

	Three months ended								Increase/(decrease)
	March 31,
	2021				2020				%			Rebased %
	in millions, except % amounts
C&W Caribbean & Networks	$	429.8			$	452.0			(5)			(4)
C&W Panama	122.0				138.3				(12)			(11)
Liberty Puerto Rico	361.3				104.6				245			14
VTR	210.3				206.4				2			(8)
Cabletica	36.2				33.7				7			15
Corporate	5.4				—				N.M.			N.M.
Eliminations	(5.1)				(4.0)				N.M.			N.M.
Total	$	1,159.9			$	931.0			25			—

N.M. – Not Meaningful.

• Our reported revenue for the three months ended March 31, 2021 increased by 25%.
  • Reported revenue growth was driven by (1) the addition of $240 million from Liberty Mobile, which was acquired on October 31, 2020, (2) double-digit growth in our legacy Liberty Puerto Rico operations, and (3) a net positive foreign exchange ("FX") impact of $11 million. These increases were partially offset by organic declines across C&W Panama, VTR and C&W Caribbean & Networks.

Q1 2021 Revenue Growth – Segment Highlights

• C&W Caribbean & Networks: revenue declined on a reported and rebased basis by 5% and 4%, respectively. The higher reported decline was primarily driven by adverse currency movements.
  • B2B revenue declined 4% on both a reported and rebased basis, as compared to the prior-year period. The year-over-year decline continued to be driven by reduced or suspended service across our markets as a result of a decline in economic activity following COVID-19 restrictions. Our subsea network performance was also lower in the quarter, primarily due to revenue recognized on a cash basis for services to a significant customer in the prior-year period.
  • Fixed residential revenue was 2% lower on a reported basis and flat on a rebased basis, as compared to the prior-year period. Rebased performance was driven by the addition of 106,000 RGUs in the past twelve months, of which 66,000 were broadband subscribers as customers sought improved connectivity to support work and education from home. Volume growth was offset by lower ARPUs primarily across telephony and video products and by a decline in non-subscription revenue due to lower interconnect volumes.
  • Mobile revenue declined 10% on a reported basis and 8% on a rebased basis, as compared to the prior-year period. The decrease was driven by lower average numbers of mobile subscribers due to COVID-19 impacts, including reduced retail and acquisition activities, and lower ARPU from mobile services as lockdowns and travel restrictions reduced outbound roaming and usage.
• C&W Panama: revenue declined by 12% on a reported basis and 11% on a rebased basis as our operations in Panama continued to be impacted by COVID-19. Sequential performance was relatively stable, excluding the impact of reduced non-recurring B2B revenue in Q1 2021 as compared to a strong performance in Q4 2020.
  • B2B revenue was 13% lower on a reported basis, primarily due to reduced non-recurring revenue compared to the prior-year period where we secured some notable Government-related projects.
  • Fixed residential revenue was 9% lower on a reported basis. Subscription revenue declined as volume growth across all products was offset by lower ARPU in telephony and video services. Non-subscription revenue drove the overall decline, primarily due to lower payphone usage.
  • Mobile revenue declined 11% on a reported basis, driven by continued reduction in recharge activity and fewer subscribers year-over-year following COVID-19 lockdowns.
• Liberty Puerto Rico: revenue grew by 245% and 14% on a reported and rebased basis, respectively. Reported growth benefited from the inclusion of Liberty Mobile in the quarter. Our legacy Puerto Rico business delivered double-digit revenue growth driven by 136,000 RGU additions and increased ARPU over the last twelve months.
• VTR: revenue increased by 2% on a reported basis and declined by 8% on a rebased basis. The higher reported growth as compared to the prior-year period was driven by a 10% depreciation of the U.S. dollar relative to the Chilean peso. Despite fixed additions in the current quarter, carryover effects from subscriber losses during the second half of 2020 continue to impact rebased revenue performance. Increased competitive intensity has further led to discounting of bundles and associated lower ARPUs.
• Cabletica: revenue grew by 7% and 15% on a reported and rebased basis, respectively. This was driven by increased broadband subscribers and overall ARPU growth over the year.

Operating Income

• Operating income was $178 million and $108 million for the three months ended March 31, 2021 and 2020, respectively.
  • We reported higher operating income during Q1 2021, as compared with the corresponding period during 2020, primarily due to the net effect of (i) an increase in Adjusted OIBDA as further discussed below, (ii) an increase in depreciation and amortization expense and (iii) a decrease in impairment, restructuring and other operating items, net.

Adjusted OIBDA Highlights

The following table presents (i) Adjusted OIBDA of each of our reportable segments and our corporate category for the periods indicated and (ii) the percentage change from period-to-period on both a reported and rebased basis:

	Three months ended								Increase (decrease)
	March 31,
	2021				2020				%			Rebased %
	in millions, except % amounts
C&W Caribbean & Networks	$	181.3			$	187.0			(3)			(2)
C&W Panama	44.0				45.8				(4)			(3)
Liberty Puerto Rico	149.9				50.5				197			26
VTR	70.5				80.1				(12)			(20)
Cabletica	14.1				13.3				6			14
Corporate	(10.5)				(12.8)				18			18
Total	$	449.3			$	363.9			23			3
Operating income margin	15.4		%		11.6		%
Adjusted OIBDA margin	38.7		%		39.1		%

• Our reported Adjusted OIBDA for the three months ended March 31, 2021 increased by 23%.
  • Reported Adjusted OIBDA increase in Q1 2021 was largely driven by (1) the addition of $86 million contributed by Liberty Mobile, (2) strong growth in our legacy Liberty Puerto Rico operations, and (3) a net positive FX impact of $3 million. These increases were partially offset by declines in VTR, C&W Caribbean & Networks and C&W Panama.

Q1 2021 Adjusted OIBDA Growth – Segment Highlights

• C&W Caribbean and Networks: Adjusted OIBDA declined on a reported and rebased basis by 3% and 2%, respectively. Our rebased performance was driven by the aforementioned rebased revenue decline, partly offset by lower costs. Direct costs were lower due to reduced wholesale call volumes. Other operating costs and expenses were lower as (i) reduced personnel costs due to ongoing restructuring activities and (ii) lower travel and entertainment and marketing costs given COVID-19 related mobility restrictions were partly offset by increased network maintenance costs as usage increased.
• C&W Panama: Adjusted OIBDA declined by 4% on a reported basis and 3% on a rebased basis. Performance was driven by the aforementioned revenue decline, partly offset by lower direct and operating costs. Direct costs decreased due to certain non-recurring projects that have been put on hold due to economic uncertainty related to COVID-19, and lower handset sales due to lockdown restrictions. Other operating costs and expenses were lower year-over-year, due to (i) the benefits of certain ongoing restructuring activities, (ii) reduced bad debt provisions, and (iii) lower network maintenance costs due to the renegotiation of certain vendor contracts and reduced expense as we upgrade legacy networks.
• Liberty Puerto Rico: reported and rebased Adjusted OIBDA growth of 197% and 26%, respectively. Reported growth was driven by the inclusion of Liberty Mobile in the quarter. For our legacy operations, rebased growth was driven by the previously mentioned revenue growth, partly offset by (i) annual increases in programming rates and a higher number of video subscribers, and (ii) higher labor and commercial costs, including commissions associated with increased sales. Liberty Mobile also posted strong rebased Adjusted OIBDA growth driven by higher gross profit due to improved equipment sales margins and higher net roaming income.
• VTR: Adjusted OIBDA declined on a reported and rebased basis by 12% and 20%, respectively. The lower reported year-over-year decline was driven by a depreciation of the U.S. dollar relative to the Chilean peso. The rebased Adjusted OIBDA decline was driven by the aforementioned revenue impacts and higher other operating costs and expenses, slightly offset by lower direct costs driven by lower interconnect rates and equipment sales. Other operating costs and expenses were higher in the quarter, primarily due to increased network and commercial activities.
• Cabletica: reported and rebased Adjusted OIBDA growth of 6% and 14%, respectively. Rebased growth was driven by the previously mentioned revenue growth and stable Adjusted OIBDA margin of 39%.

Net Earnings (Loss) Attributable to Shareholders

• Net earnings (loss) attributable to shareholders was $88 million and ($181 million) for the three months ended March 31, 2021 and 2020, respectively. 

Property & Equipment Additions and Capital Expenditures

The table below highlights the categories of the property and equipment additions (P&E Additions) for the indicated periods and reconciles to cash paid for capital expenditures.

	Three months ended
	March 31,
	2021				2020
	in millions, except % amounts
Customer Premises Equipment	$	73.6			$	67.1
New Build & Upgrade	25.5				28.2
Capacity	17.1				6.1
Baseline	26.9				19.6
Product & Enablers	9.3				11.9
Property & equipment additions	152.4				132.9
Assets acquired under capital-related vendor financing arrangements	(18.8)				(23.6)
Changes in current liabilities related to capital expenditures	2.0				39.9
Capital expenditures	$	135.6			$	149.2

Property & equipment additions as % of revenue

13.1

%

14.3

%

Property & Equipment Additions:
C&W Caribbean & Networks	$	49.6			$	57.3
C&W Panama	10.7				13.2
Liberty Puerto Rico	33.7				13.3
VTR	46.7				40.9
Cabletica	7.3				4.0
Corporate	4.4				4.2
Property & equipment additions	$	152.4			$	132.9

Property & Equipment Additions as a Percentage of Revenue by Reportable Segment:
C&W Caribbean & Networks	11.5	%		12.7	%
C&W Panama	8.8	%		9.5	%
Liberty Puerto Rico	9.3	%		12.7	%
VTR	22.2	%		19.8	%
Cabletica	20.2	%		11.9	%

New Build and Homes Upgraded by Reportable Segment:
C&W Caribbean & Networks	21,000			17,200
C&W Panama	21,500			25,200
Liberty Puerto Rico	2,100			7,200
VTR	76,700			29,300
Cabletica	6,600			1,500
Total	127,900			80,400

Q1 2021 Property & Equipment Additions and Capital Expenditures – Segment Highlights

• C&W Caribbean & Networks: the year-over-year decrease was mainly driven by (i) the Bahamas hurricane Dorian recovery capex spend in the prior-year period and (ii) the impact of COVID-19 restrictions on sales in certain markets.
• C&W Panama: P&E additions were lower year-over-year due to (i) reduced CPE expenditures as gross adds declined and unit pricing and installation efficiency improved.
• Liberty Puerto Rico: the year-over-year increase in expenditure and decline in P&E additions as a percentage of revenue was driven by the inclusion of Liberty Mobile in Q1 2021.
• VTR: P&E additions were higher year-over-year driven by increased CPE, new build activity and capacity investments.
• Cabletica: P&E additions increased as compared to the prior-year period due to higher CPE costs related to sales and higher cost of new set-top boxes.

Summary of Debt, Finance Lease Obligations, Cash and Cash Equivalents & Restricted Cash

The following table details the U.S. dollar equivalent balances of the outstanding principal amounts of our debt and finance lease obligations, and cash, cash equivalents and restricted cash at March 31, 2021:

	Debt			Finance lease obligations			Debt and finance lease obligations				Cash and cash equivalents
	in millions
Liberty Latin America1	$	404.8		$	1.1		$	405.9			$	557.1
C&W	4,193.9			1.2			4,195.1				474.7
Liberty Puerto Rico	2,610.0			10.8			2,620.8				128.1
VTR	1,597.4			—			1,597.4				138.5
Cabletica	119.7			—			119.7				7.2
Total	$	8,925.8		$	13.1		$	8,938.9			$	1,305.6
Consolidated Leverage and Liquidity Information:							March 31, 2021				December 31, 2020
Consolidated gross leverage ratio2							5.0x				4.8x
Consolidated net leverage ratio2							4.3x				4.3x
Average debt tenor3							6.5 years				6.2 years
Fully-swapped borrowing costs								6.0%				6.3%
Unused borrowing capacity (in millions)4							$	1,219.7			$	1,172.9

1. Represents the amount held by Liberty Latin America on a standalone basis plus the aggregate amount held by subsidiaries of Liberty Latin America that are outside our borrowing groups.
2. Consolidated leverage ratios are non-GAAP measures. For additional information, including definitions of our consolidated leverage ratios, required reconciliations and the impact of Liberty Mobile on the ratios, see Non-GAAP Reconciliations below.
3. For purposes of calculating our average tenor, total debt excludes vendor financing and finance lease obligations.
4. At March 31, 2021, the full amount of unused borrowing capacity under our subsidiaries' revolving credit facilities was available to be borrowed, both before and after completion of the March 31, 2021 compliance reporting requirements. For information regarding limitations on our ability to access this liquidity, see the discussion under “Material Changes in Financial Condition” in our recently filed Quarterly Report on Form 10-Q.

Quarterly Subscriber Variance

	Fixed Subscriber Variance Table — March 31, 2021 vs December 31, 2020
	Homes Passed			Two-way Homes Passed			Fixed-line Customer Relationships			Video RGUs			Internet RGUs			Telephony RGUs			Total RGUs				Total Mobile Subscribers
C&W Caribbean & Networks:
Jamaica	7,400			7,400			6,600			1,900			9,100			11,000			22,000				10,100
The Bahamas	—			—			(500)			600			1,400			(700)			1,300				(1,000)
Trinidad and Tobago	600			600			500			—			1,400			1,100			2,500				—
Barbados	—			—			200			700			900			(100)			1,500				(3,700)
Other	1,900			1,900			(2,200)			(3,000)			3,200			200			400				(3,300)
Total C&W Caribbean & Networks	9,900			9,900			4,600			200			16,000			11,500			27,700				2,100
C&W Panama1	16,200			16,200			3,900			1,400			5,100			3,500			10,000				61,100
Total C&W	26,100			26,100			8,500			1,600			21,100			15,000			37,700				63,200
Liberty Puerto Rico2,3	2,300			2,300			11,800			3,200			15,200			6,200			24,600				(1,900)
VTR	76,000			77,000			(10,500)			1,700			(8,200)			13,000			6,500				(6,400)
Cabletica4	6,600			6,600			3,000			(400)			5,900			1,700			7,200				—
Total Net Adds	111,000			112,000			12,800			6,100			34,000			35,900			76,000				54,900

	Mobile Subscriber Variance Table — March 31, 2021 vs December 31, 2020
	Consolidated Operating Data — March 31, 2021									Q1 Organic Subscriber Variance
	Prepaid			Postpaid			Total			Prepaid			Postpaid			Total
C&W Caribbean & Networks:
Jamaica	977,200			25,200			1,002,400			7,200			2,900			10,100
The Bahamas	147,400			32,700			180,100			(3,400)			2,400			(1,000)
Barbados	84,100			30,800			114,900			(4,300)			600		{ "@context": "https://schema.org", "@type": "FAQPage", "name": "Liberty Latin America Reports First Quarter 2021 Results FAQs", "mainEntity": [ { "@type": "Question", "name": "What were Liberty Latin America's Q1 2021 revenues?", "acceptedAnswer": { "@type": "Answer", "text": "Liberty Latin America's Q1 2021 revenues were $1.2 billion, a 25% increase year-over-year." } }, { "@type": "Question", "name": "How many RGUs did Liberty Latin America add in Q1 2021?", "acceptedAnswer": { "@type": "Answer", "text": "Liberty Latin America added 76,000 RGUs in Q1 2021, which is a 25% increase compared to the prior year." } }, { "@type": "Question", "name": "What is the stock performance of Liberty Latin America?", "acceptedAnswer": { "@type": "Answer", "text": "Liberty Latin America's stock is traded under the symbols LILA, LILAK, and LILAB." } }, { "@type": "Question", "name": "Was there an increase in operating income for Liberty Latin America in Q1 2021?", "acceptedAnswer": { "@type": "Answer", "text": "Yes, Liberty Latin America's operating income increased to $178 million in Q1 2021, compared to $108 million in Q1 2020." } }, { "@type": "Question", "name": "What is the status of Liberty Latin America's debt?", "acceptedAnswer": { "@type": "Answer", "text": "Liberty Latin America successfully refinanced over $1 billion of its debt in March 2021, improving its average debt tenor and reducing borrowing costs." } } ] } FAQ What were Liberty Latin America's Q1 2021 revenues? Liberty Latin America's Q1 2021 revenues were $1.2 billion, a 25% increase year-over-year. How many RGUs did Liberty Latin America add in Q1 2021? Liberty Latin America added 76,000 RGUs in Q1 2021, which is a 25% increase compared to the prior year. What is the stock performance of Liberty Latin America? Liberty Latin America's stock is traded under the symbols LILA, LILAK, and LILAB. Was there an increase in operating income for Liberty Latin America in Q1 2021? Yes, Liberty Latin America's operating income increased to $178 million in Q1 2021, compared to $108 million in Q1 2020. What is the status of Liberty Latin America's debt? Liberty Latin America successfully refinanced over $1 billion of its debt in March 2021, improving its average debt tenor and reducing borrowing costs. Liberty Latin America Ltd. NASDAQ:LILA LILA Rankings #2285 Ranked by Market Cap N/A Ranked by Dividends LILA Latest News Nov 6, 2024 Liberty Latin America Reports Q3 2024 Results Oct 29, 2024 LIBERTY LATIN AMERICA SCHEDULES INVESTOR CALL FOR THIRD QUARTER 2024 RESULTS Oct 16, 2024 SPARKLE TO PARTNER WITH LIBERTY NETWORKS AND GOLD DATA IN NEW PAN-REGIONAL SUBSEA CABLE SYSTEM Sep 4, 2024 LIBERTY LATIN AMERICA COMPLETES ACQUISITION OF ECHOSTAR’S MOBILE SPECTRUM AND PRE-PAID SUBSCRIBERS IN PUERTO RICO AND THE USVI Aug 6, 2024 Liberty Latin America Reports Q2 & H1 2024 Results LILA Stock Data Market Cap 1.39B Float 155.37M Insiders Ownership 23.49% Institutions Ownership 66.11% Short Percent 0.54% Industry Telecom Services Sector Cable & Other Pay Television Services Website Link Country United States of America City DENVER Explore About Rhea-AI Sitemap Legal Terms of Use Cookie Notice Privacy Policy Links RSS feed Patreon Discord Server Facebook Reddit Google News © 2020-2024 StockTitan.net