Millicom (Tigo) announces new shareholder remuneration policy

Rhea-AI Summary

Millicom (TIGO) has announced a new shareholder remuneration policy that includes the resumption of regular cash dividends. The company's Board of Directors aims to sustain or grow cash dividends annually while maintaining a prudent capital structure with a long-term leverage target range of 2.0-2.5x.

Following the recent $1.00/share interim dividend paid on January 10, the Board plans to approve an additional $0.75/share interim dividend after Q4 2024 results, payable in April 2025. Furthermore, the Board will propose a $3.00 per share dividend at the May 21, 2025 Annual General Meeting, to be paid in four quarterly installments of $0.75/share from July 2025 through April 2026.

This policy reflects the company's commitment to returning capital to shareholders while considering the capital-intensive nature of the business and Latin American market volatility.

Positive

• Implementation of new regular cash dividend policy
• Total proposed dividend of $4.75 per share for 2025-2026 period
• Commitment to sustain or grow cash dividends annually
• Clear dividend payment schedule with quarterly distributions

Negative

• Exposure to Latin American political and macroeconomic volatility
• Capital-intensive business model requiring significant ongoing investment

Insights

Financial Analyst

The announcement of Millicom's new shareholder remuneration policy represents a significant strategic shift with substantial implications for investors. The total dividend commitment of $4.75 per share over the next 15 months ($0.75 in April 2025 plus $3.00 in quarterly installments) translates to an impressive forward dividend yield of approximately 11.4% based on current market prices.

The company's commitment to maintaining a leverage ratio between 2.0-2.5x demonstrates a balanced approach between shareholder returns and financial stability. This range is particularly prudent given the inherent volatility in Latin American markets and the capital-intensive nature of telecommunications infrastructure.

Breaking down the dividend schedule: the $1.00 interim dividend already paid, plus $0.75 planned for April 2025, combined with the proposed $3.00 annual dividend represents a substantial cash return to shareholders. For retail investors, this structured approach provides predictable quarterly income streams while allowing for portfolio planning.

The policy's emphasis on sustaining or growing dividends annually signals management's confidence in future cash flow generation and operational stability. However, investors should monitor the company's ability to maintain this generous payout while managing capital expenditure requirements in their Latin American markets.

Market Research Analyst

This dividend policy announcement strategically positions TIGO in the Latin American telecommunications sector. The structured quarterly payment system mirrors practices of mature telecom operators while offering superior yields compared to regional peers. This could attract both income-focused investors and institutional players seeking exposure to Latin American markets with reduced volatility.

The timing of this announcement is particularly noteworthy as it coincides with increasing investor interest in emerging market dividend stocks as alternatives to traditional fixed-income investments. The commitment to regular, growing dividends could help reduce the typical volatility premium associated with Latin American stocks, potentially leading to a more stable valuation multiple.

The policy acknowledges regional risks while providing a framework for consistent returns - a rare combination in emerging markets. This balanced approach could attract a new class of investors, potentially improving trading liquidity and market sentiment. The focus on maintaining prudent leverage targets while delivering substantial shareholder returns demonstrates sophisticated capital management that should resonate well with institutional investors.

Millicom (Tigo) announces new shareholder remuneration policy

Luxembourg, January 14^th, 2025 – Millicom International Cellular S.A. ("Millicom" or the “Company”), today announced that the Company’s Board of Directors (the “Board”) has approved a new shareholder remuneration policy under which it proposes to:

• resume regular cash dividends;
• sustain or grow cash dividends every year; and
• maintain a prudent capital structure, with a long-term leverage target range of 2.0-2.5x

With this policy, the Board aims to return capital to shareholders from the cashflow generation of the Company in a consistent and prudent manner that reflects the capital-intensive and highly-regulated nature of the business, as well as the Latin American region’s elevated political and macroeconomic volatility.

Following the interim dividend of $1.00/share paid on January 10, the Board intends to approve an additional interim dividend, after Millicom publishes its Q4 2024 results, as follows:

• $0.75/share to be paid in April 2025

Furthermore, the Board intends to propose for the approval of the Annual General Meeting of its shareholders to be held in Luxembourg on May 21, 2025, a dividend of $3.00 per share payable in four equal quarterly installments, as follows:

• $0.75/share in July, 2025
• $0.75/share in October, 2025
• $0.75/share in January, 2026
• $0.75/share in April, 2026

Regulatory Statement

This information was prior to this release inside information and is information that Millicom is obliged to make public pursuant to the EU Market Abuse Regulation.  This information was submitted for publication, through the agency of the contact person set out below, at 22:30 CET on January 14, 2025.

-END-

For further information, please contact

Press: Sofía Corral, Director Corporate Communications press@millicom.com

Investors: Michel Morin, VP Investor Relations investors@millicom.com

About Millicom

Millicom (NASDAQ U.S.: TIGO, Nasdaq Stockholm: TIGO_SDB) is a leading provider of fixed and mobile telecommunications services in Latin America. Through our TIGO® and Tigo Business® brands, we provide a wide range of digital services and products, including TIGO Money for mobile financial services, TIGO Sports for local entertainment, TIGO ONEtv for pay TV, high-speed data, voice, and business-to-business solutions such as cloud and security. As of September 30, 2024, Millicom, including its Honduras Joint Venture, employed approximately 15,000 people, and provided mobile and fiber-cable services through its digital highways to more than 46 million customers, with a fiber-cable footprint of about 14 million homes passed. Founded in 1990, Millicom International Cellular S.A. is headquartered in Luxembourg.

Forward-Looking Statements

Statements included herein that are not historical facts, including without limitation statements concerning the payment of the interim dividend and the timing of such payment, the payment of the dividend in four quarterly instalments and the timing of such payments, and the proposal to sustain or grow cash dividends every year and the proposal to maintain a prudent capital structure are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. Moreover, the proposals to sustain and grow cash dividends are dependent in particular upon the performance of the Company which is subject to risks and uncertainties. In the event such risks or uncertainties materialize, Millicom’s results and its ability to pay the interim dividend or the dividend, or to sustain and grow the dividend, could be materially adversely affected. A list and description of such risks, uncertainties and other matters can be found under the heading “Risk Factors” in Millicom’s Annual Report on Form 20-F for the year ended December 31, 2023, which is available on the website of the U.S. Securities and Exchange Commission at www.sec.gov.

All forward-looking statements attributable to Millicom or any person acting on its behalf are expressly qualified in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Except to the extent otherwise required by applicable law, Millicom does not undertake any obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

FAQ

What is Millicom's (TIGO) new dividend payment schedule for 2025-2026?

TIGO will pay $0.75/share in April 2025 as an interim dividend, followed by four quarterly payments of $0.75/share each in July 2025, October 2025, January 2026, and April 2026, subject to shareholder approval.

What is TIGO's total dividend amount for 2025-2026?

The total dividend amount is $4.75 per share, consisting of a $1.00 interim dividend paid in January 2024, a $0.75 interim dividend in April 2025, and four quarterly payments of $0.75 totaling $3.00.

What is Millicom's (TIGO) new leverage target range?

TIGO has set a long-term leverage target range of 2.0-2.5x as part of its prudent capital structure strategy.

When will TIGO shareholders vote on the new dividend proposal?

Shareholders will vote on the dividend proposal at the Annual General Meeting in Luxembourg on May 21, 2025.