Reporting season roundup: Millicom, Comcast, Equinix
Major companies are reporting their Q1 results.
Millicom: strategic investments paying off
At the group level Millicom reported stable year on year revenue, "reflecting a recovery to pre-Covid activity levels in Q1". Net profit turned positive and at $42 million over the quarter, up from a net loss of $122 million in Q1 2020. Other highlights included "very robust" customer net additions in both the cable and mobile businesses, and "solid new account wins" in B2B.
Millicom CEO Mauricio Ramos said: “Our operational focus and strategic investments over the past year are paying off. After an incredibly strong Q1, we now have more customers, and we are generating more revenue, more EBITDA and more OCF than we did one year ago, before the start of the pandemic. We did not just recover; we are now above pre-Covid levels on most of our operational and financial KPIs."
In Latam – Guatemala and Honduras JVs reported as if fully consolidated – service revenue growth was up 1.3% year-on-year, with strong momentum across all businesses and markets. "Record" customer adds in the home segment reached 166,000 and, combined with stable ARPU, saw service revenue growth of 6.5%. Mobile, net additions reached 1.1 million. EBITDA grew 6.3%, the strongest performance in more than five years, which reflected the "improved top line performance and sustained cost control", the company said.
As Capacity reported in April, Millicom sold Tigo Tanzania and Zantel and last year sold its JV in Ghana, Airtel Tigo, to the government. Millicom recorded a $25 million charge in Q1 as part of the latter transaction and the completion of both remains subject to regulatory approvals.
"The Tanzania sale was the culmination of a structured and competitive process with multiple bidders. We are very pleased with the outcome, and plan to use the proceeds to reduce our net debt. Our strong Q1 and these disposals give us increased flexibility to resume share buybacks later this year," Ramos said.
At March-end underlying gross debt was $6.1 billion, reduced $281 million over the quarter. This was inclusive of Guatemala and Honduras, at $748 million gross debt and a decrease of $2 million over the quarter. Around 3% of the company's total debt is in Africa and 38% at the corporate level.
Comcast: Off to a great start, CEO notes
At Comcast, revenue from cable communications increased 5.9% to $15.8 billion in the first quarter, driven by increases in broadband, wireless, business services and advertising revenue, partially offset by decreases in other and voice revenue.
Broadband revenue increased 10% due to an increase in the number of residential broadband customers and an increase in average rates. Wireless revenue increased 49.7% due to an increase in the number of customer lines and an increase in device sales.
Business services revenue increased 6.1%, reflecting an increase in average rates and an increase in the number of customers.
Total Customer Relationships increased by 380,000 to 33.5 million over the quarter. Residential customer relationships increased by nearly 370,000 and business customer relationships increased by nearly 11,000. Total broadband customer net additions were 461,000, total video customer net losses were 491,000 and total voice customer net losses were 106,000. In addition, Cable Communications added 278,000 wireless lines in the quarter.
However, voice revenue decreased 3.1%, primarily reflecting a decrease in the number of residential voice customers. Other revenue decreased 6.7%, primarily reflecting lower revenue from security and automation services as well as a decrease in what was termed "certain billing and collection fees". Video revenue was consistent with the prior year period, reflecting a decrease in the number of residential video customers offset by an increase in average rates.
Chairman and CEO of Comcast Corporation, Brian L. Roberts, said: “We are off to a great start in 2021. Our entire company performed well across the board, highlighted by another strong performance from cable, which posted its third consecutive quarter of double-digit Adjusted EBITDA growth, while adding the most quarterly customer relationships in our company’s history. Outside of cable, I was also very pleased by the persistent recovery and increasing momentum at NBCUniversal and Sky.
"At Sky, customer relationship additions increased by 221,000, marking the best first quarter result in six years despite the lockdowns imposed throughout Europe. Across all parts of the company, our teams are executing at a high level and collaborating to drive growth and innovation, and I couldn’t be more excited about our future," commented Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation.
Equinix: solid sales and profit growth
Equinix reported a 10% annual increase in first quarter revenues to US$1.6 billion, in a year it expects to be “one of the most active build years ever”.
Announcing the results Thursday, the company said it has 36 major projects underway across 28 markets and 19 countries. For the quarter ending 31 March 2021, the adjusted EBITDA was $773 million – up 13% year-on-year – helped by lower than expected utilities and repairs and maintenance expenses following disruption during the pandemic.
The net income was $156 million, an annual jump of 32%. The company's current annual guidance for 2021 is revenue of between $6.5 and $6.6 billion, which would be an increase of between 9 and 10% over the previous year.
Charles Meyers, president and CEO of Equinix, said: “We had a great start to the year, and as businesses continue to navigate towards a post-pandemic world Equinix is uniquely well-positioned. “Digital transformation continues to accelerate and businesses across a broad range of verticals are recognising that their infrastructure can be a key source of competitive advantage in an increasingly digital world.”
He added: “Q1 marked a milestone for Equinix as we are now the market leader in retail colocation in all three regions of the world, taking the number-one spot in Asia-Pacific for the first time.”
For more Q1 results, click here.