Millicom 2006 earnings hit US$169mn

Luxembourg-based mobile holding company Millicom Cellular International (Nasdaq: MICC) posted profits of US$169mn for 2006 compared to US$10.3mn the year before, the company said in its annual earnings report. In the fourth quarter, net income reached US$49.9mn compared to US$16.1mn in 4Q05. Revenues for the year came in at US$1.58bn, a 71% increase over US$923mn in 2005. During the fourth quarter, revenues nearly doubled to US$544mn against US$273mn in the same period of 2005. Subscriber increases, particularly in Central and South America, were key drivers of revenue growth, the company said. Millicom's Central American operations, where it has wholly owned units in El Salvador and majority shares of units in Guatemala and Honduras, provided the most revenues by region in Q4 at US$250mn, a 77% increase against the same period the previous year. South America provided the strongest revenue growth, mainly due to Millicom's August acquisition of Colombia Móvil, which it operates under the Tigo brand. That region grew 305% year-over-year to US$162mn in fourth quarter revenues. Ebitda in 2006 rose 64% to US$717mn over the previous year and carried a margin of 46%. SUBSCRIBER INCREASES At the end of the fourth quarter the number of Millicom subscribers had increased 99% compared to end-2005, reaching 14.9mn through its operations in Central and South America, Africa and Asia. Central American units posted strong subscriber growth, ending 2006 at 5.16mn, an 89% jump compared to end-2005. In both El Salvador and Honduras, Millicom is the largest operator with 1.39mn and 1.55mn subscribers, respectively. The number of South American subscribers rose 224% by the end of last year to 4.33mn mainly through the Colombian acquisition, which accounted for 2.1mn users. Figures for North America were not provided. CONTINUED CAPEX INCREASES The company's total capital investments reached US$247mn in Q4, and although detailed figures were not provided, Millicom CEO Marc Beuls said in a conference call that the Colombian unit saw more investment than any other single country, focused on infrastructure upgrades. Previously the company said it would invest US$200mn in 2007 in its Colombia unit. The annual global capex figure for 2006 was US$616mn. Beuls said that in 2007 Millicom will focus on further capital investments which should reach around US$800mn for the entire year and the company will also seek to expand its ownership of current joint ventures rather than look for new markets to enter through acquisitions.