* Q1 EBITDA $509 mln vs f'cast $486 mln
* Ups 2011 guidance
* Increases size of planned buyback, no big acquisitions
* Shares rise 6.1 percent
(Adds CEO, analyst comment)
By Simon Johnson
STOCKHOLM, April 19 Record top line growth
boosted first-quarter results at Millicom MICC.O (MICsdb.ST)
and the emerging markets telecoms firm raised its guidance for
the year, sending its shares higher.
The Latin America and Africa-focused operator also said it
planned no big acquisitions but would expand a share buyback
programme to around $800 million for this year up from the
previously announced $300 million.
Millicom has traditionally relied on new subscribers to
drive growth, but has shifted focus recently to higher paying
It said the focus on value-added services -- like money
transfer -- had helped drive first-quarter revenues up 13.4
percent to $1.1 billion, in line with forecasts. In local
currencies, revenue growth was the highest since 2008.
"Given our strong performance in Q1 and our confidence in
the business outlook for 2011, we are raising our EBITDA margin
guidance to above 45 percent for the full year and our operating
free cash flow margin guidance to the high teens," the company
It had previously forecast an EBITDA margin in the
mid-forties and operating free cash flow in the mid-teens.
Millicom's core operating margin, at 47.1 percent in the
first quarter, was higher than forecast although the firm said
this could be a high water mark due to increased investment in
value-added services this year.
Earnings before interest, tax, depreciation and amortisation
(EBITDA) were $509 million versus a mean forecast in a Reuters
poll of $486 million and $451 million in the year-ago quarter.
Shares were up 6.1 percent in Stockholm at 629.50 crowns by
1149 GMT, outperforming a broadly flat European telecoms market
"It was a good report, in particularly the EBITDA result was
5 percent higher than we had expected," Jan Dworsky, analyst at
"Central America has returned to good organic growth --
that's something that sticks out. In the light of the first
quarter, there is room for upside in my own and consensus
forecasts for 2011."
Average revenue per user (ARPU) turned positive in Central
America -- Millicom's largest market area -- for the first time
in several years and the decline in ARPU in Africa slowed.
The company said it saw ARPU stabilising in the coming
quarters after a long decline.
"That's basically our ambition -- to hold or grow ARPU,"
Chief Executive Mikael Grahne said.
Millicom has said in recent quarters it would hold on to
some cash as it eyed acquisitions. But the decision to increase
the buyback is a sign that there are few opportunities at the
right price and Grahne said that the company was better focused
trying to grow its existing business.
"There is less likelihood of an acquisition," he said.
"There could be something small, but nothing substantial."
Millicom also said it planned to delist in the United States
with its shares traded in Stockholm. It said this would simplify
its regulatory tasks.
(Editing by Jon Loades-Carter)