UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF THE

SECURITIES EXCHANGE ACT OF 1934

For the month of February, 2023.

Commission File Number: 001-38763

MILLICOM INTERNATIONAL CELLULAR S.A. 

(Exact Name of Registrant as Specified in Its Charter)

2, Rue du Fort Bourbon,

L-1249 Luxembourg

Grand Duchy of Luxembourg

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  ☒       Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ☐       No ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ☐       No ☒

MILLICOM INTERNATIONAL CELLULAR S.A.

INDEX TO FURNISHED MATERIAL

Item
______

Item 1

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

Millicom International Cellular S.A.

For the three-month period and year ended December 31, 2022

February 10, 2023

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

Unaudited interim condensed consolidated statement of income for the three-month period and year ended December 31, 2022

(i)  Re-presented for discontinued operations (see note 4)

(ii)  Tigo Guatemala is fully consolidated since the acquisition of the remaining 45% shareholding on November 12, 2021. See note 3 for further details. As a result, numbers are not directly comparable with December 31, 2021 figures.

(iii)  2021 comparatives have been restated as a result of the completion of the rights offering (see note 7)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

Unaudited interim condensed consolidated statement of comprehensive income for the three-month period and year ended December 31, 2022

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

Unaudited interim condensed consolidated statement of financial position as at December 31, 2022

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

Unaudited interim condensed consolidated statement of financial position as at December 31, 2022 (continued)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

Unaudited interim condensed consolidated statement of cash flows for the year ended December 31, 2022

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

Unaudited interim condensed consolidated statements of changes in equity for the year ended December 31, 2022

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

Notes to the unaudited interim condensed consolidated statements

1. GENERAL INFORMATION

Millicom International Cellular S.A. (the “Company” or “MIC SA”), a Luxembourg Société Anonyme, and its subsidiaries, joint ventures and associates (the “Group” or “Millicom”) is a provider of cable and mobile services dedicated to emerging markets in Latin America. Millicom provides high speed broadband and innovation around The Digital Lifestyle® services through its principal brand, TIGO.

On November 12, 2021, Millicom acquired the remaining 45% equity interest in its business in Guatemala (collectively, "Tigo Guatemala") and since that date owns 100% equity interest and fully consolidates Tigo Guatemala (see note 3). As a consequence this affects the comparability of the statements of income and cash flows in these unaudited interim condensed consolidated financial statements and the statement of financial position has been restated as a result of the finalization of the purchase accounting (refer to note 3).

On March 10, 2022, our operations in Tanzania, our last remaining operations in Africa, were classified as discontinued operations in the statement of income and as assets held for sale in the statement of financial position after the Group obtained all necessary approvals to conclude the announced divestiture. The sale was completed on April 5, 2022. As a result, the numbers in the statement of income have been re-presented for all periods shown (see note 4).

On February 9, 2023, the Board of Directors authorized these unaudited interim condensed consolidated financial statements for issuance.

2. SUMMARY OF ACCOUNTING POLICIES

These interim condensed consolidated financial statements of the Group are unaudited. They are presented in US dollars ($) and have been prepared in accordance with International Accounting Standard (“IAS”) 34 ‘Interim Financial Reporting’ as issued by the International Accounting Standards Board ("IASB") and as adopted by the European Union ("EU"). In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments that are necessary for a proper presentation of the results for interim periods. Millicom’s operations are not affected by significant seasonal or cyclical patterns.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2021, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the IASB and in conformity with IFRS as adopted by the EU. These financial statements are prepared in accordance with consolidation and accounting policies consistent with the December 31, 2021 consolidated financial statements, except for the changes described below.

We have made rounding adjustments to reach some of the figures included in these unaudited interim condensed consolidated financial statements. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them and percentage calculations using these adjusted figures may not result in the same percentage values as are shown in these unaudited interim condensed consolidated financial statements.

Inflation in many countries globally has been rising during 2022 due to a variety of factors, including significant disruptions to the global production and distribution of energy and food commodities caused by Russia’s invasion of Ukraine as well as the global response to that invasion. As a result, global economic prospects have been severely affected, including in our Latin America markets, a situation that is expected to continue at least throughout the beginning of 2023. During the year, the Group took meaningful steps to mitigate the impact of raising costs, including the implementation of numerous price increases, and cost efficiency initiatives which position us to drive healthy service revenue growth and margins going forward.

Although the macro-economic backdrop has become more challenging, business and financial performance for 2022 was broadly in line with our plans.

The Group continues to monitor the developments of the aforementioned events and their potential impact on performance and accounting considerations.

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

2. SUMMARY OF ACCOUNTING POLICIES (Continued)

The following changes to standards have been adopted by the Group and did not have any significant impact on the Group’s accounting policies or disclosures and did not require retrospective adjustments:

Amendments effective for annual periods starting on or after January 1, 2023 that are not expected to have a significant impact on the Group consolidated financial statements:

The following changes to standards are effective for annual periods starting on January 1, 2024 and their potential impact on the Group consolidated financial statements is currently being assessed by Management:

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

3. ACQUISITION AND DISPOSAL OF SUBSIDIARIES, JOINT VENTURES, ASSOCIATES AND OTHER NON-CONTROLLING INTERESTS

Acquisitions for the year ended December 31, 2022

As of June 14, 2022, the Group received the formal notification from the minority shareholders of Cable Onda S.A. confirming the exercise of their put option right to sell their remaining 20% shareholding to Millicom for an amount of approximately $290 million. The transaction closed on June 29, 2022 and the payment was applied against the already recorded put option liability of $290 million.

As a result, the non-controlling interests' carrying value of $78 million have been transferred to the Group's equity.

Acquisitions 2021

On November 12, 2021, Millicom announced that it had closed the agreement to acquire the remaining 45% equity interest in its joint venture business in Guatemala (collectively, "Tigo Guatemala") from its local partner for $2.2 billion in cash. The acquisition was initially financed through a bridge facility (see note 11).

As of June 30, 2022, Millicom had finalized the purchase accounting and determined the fair values of Tigo Guatemala's identifiable assets and liabilities and comparative figures as of December 31, 2021 have been restated accordingly. The finalization of the purchase accounting had an effect on the following financial position line items previously reported as of December 31, 2021:

The impact of the finalization of Tigo Guatemala's purchase accounting on the 2021 Group statement of income is immaterial. Therefore, no adjustments were made in that respect on comparative figures.

Further details of Tigo Guatemala acquisition are provided on the following page.

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

3. ACQUISITION AND DISPOSAL OF SUBSIDIARIES, JOINT VENTURES, ASSOCIATES AND OTHER NON-CONTROLLING INTERESTS (continued)

The table below shows the changes in fair values compared to the values reported as of December 31, 2021.

a) the customer lists for an amount of $514 million, with estimated weighted average useful lives of 9.3 years.

b) the spectrum and licenses held by Tigo Guatemala for $51 million, with a remaining useful life of 11 years.

c) the trademarks and brand held and operated by Tigo Guatemala for $62 million, bringing its carrying value to $910 million. Management determined that the latter have indefinite useful lives.

The goodwill is attributable to the workforce and the high profitability of Tigo Guatemala. It is currently not expected to be tax deductible. From November 12, 2021 to December 31, 2021, Tigo Guatemala contributed $223 million of revenue and $28 million of net profit to the Group. If Tigo Guatemala had been acquired on January 1, 2021, incremental revenue for the year 2021 would have been $1.38 billion and incremental net profit for the same period of $147 million. Acquisition related costs included in the statement of income under operating expenses were immaterial.

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

3. ACQUISITION AND DISPOSAL OF SUBSIDIARIES, JOINT VENTURES, ASSOCIATES AND OTHER NON-CONTROLLING INTERESTS (continued)

Disposals 2021 - Ghana

On October 13, 2021, Millicom, along with its joint venture partner Bharti Airtel Limited, closed the disposal of AirtelTigo Ghana to the Government of Ghana. As part of the closing conditions, each partner committed up to $37.5 million for the reimbursement of certain local bank facilities.

Disposals 2022 - Tanzania

On March 10, 2022, Millicom obtained the final necessary regulatory approvals to sell its operations in Tanzania. The transaction was completed on April 5, 2022 (see note 4).

4. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

Discontinued operations-Tanzania

As from March 10, 2022, and in accordance with IFRS 5, all assets and liabilities of our operations in Tanzania were classified as held for sale and their results have been removed from the results of continuing operations and are shown as a single line item on the face of the statement of comprehensive income under 'Profit (loss) from discontinued operations, net of tax'. Comparative figures of the statement of income have been re-presented accordingly.

On April 5, 2022, Millicom completed the sale for an initial cash consideration of approximately $101 million (subject to final price adjustment). As per the sale agreement, the initial sale price is adjusted to consider some outstanding tax and legal contingencies which management believes is sufficient to cover any future claims on pre-closing matters. Should the price adjustments not be sufficient, Millicom might be liable and need to make additional provisions that are not covered by the latter. In addition, the agreement also provides an IPO¹ adjustment clause valid until April 5, 2024, whereby Millicom would reimburse the buyer for any negative difference between the share price per share on the IPO date and the one implied by this sale. As of December 31, 2022, no additional provisions have been made by management in respect of the aforementioned items.

(a)   The net assets de-consolidated on the date of the disposal, as well as the gain on disposal, were as follows:

(b)  The operating results and cash flows of the discontinued operation for the years ended December 31, 2022 and December 31, 2021 are set out below. The figures shown below are after inter-company eliminations.

¹ The Tanzanian government implemented in 2016 legislation requiring telecommunications companies to list their shares on the Dar es Salaam Stock Exchange and offer 25% of their shares in a Tanzanian public offering. The ´Tanzania Communications Regulatory Authority´ (TCRA) ordered the Tanzanian operations to complete such public offering by December 31, 2025, at the latest.

 13

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

4. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Continued)

 

Results from Discontinued Operations (in millions of U.S. dollars)	Twelve months ended December 31, 2022	Twelve months ended December 31, 2021	Three months ended December 31, 2022	Three months ended December 31, 2021
Revenue	88	357	—	92
Cost of sales	(26)	(104)	—	(27)
Operating expenses	(27)	(131)	—	(37)
Depreciation and amortization	(21)	(83)	—	(20)
Other operating income (expenses), net	4	1	—	—
Gain/(loss) on disposal of discontinued operations	120	—	—	—
Other expenses linked to the disposal of discontinued operations	(11)	—	—	—
Operating profit (loss)	127	39	—	9
Interest income (expense), net	(12)	(36)	—	(12)
Other non-operating (expenses) income, net	—	(1)	—	—
Profit (loss) before taxes	116	3	—	(3)
Credit (charge) for taxes, net	(3)	(31)	—	(13)
Net profit/(loss) from discontinued operations	113	(28)	—	(16)

 

 

Cash flows from discontinued operations (in millions of U.S. dollars)	Twelve months ended December 31, 2022	Twelve months ended December 31, 2021
Cash from operating activities, net	18	87
Cash from (used in) investing activities, net	10	(46)
Cash from (used in) financing activities, net	(9)	(35)
Net cash inflows	19	5

 

5. SEGMENT INFORMATION

 

Management determines operating and reportable segments based on the reports that are used by the chief operating decision maker to make strategic and operational decisions from both a business and geographic perspective. The Millicom Group’s risks and rates of return for its operations were predominantly affected by operating in different geographical regions. Until the divestiture of our Tanzania business, as discussed above, the Millicom Group had businesses in two main regions, Latin America and Africa, which constituted our two reportable segments. As a result of the sale of the Tanzania business and its classification as a discontinued operation, we no longer report an Africa segment in our unaudited condensed consolidated financial statements and will no longer report it in our consolidated financial statements for future periods. The Group now only operates in a single region, Latin America.

 

As a result, the Group now reports a single segment, called the ‘Group Segment’, which includes the results of our Latin American operations, and regional and central corporate costs. Group segment figures will continue to include our Honduras joint venture as if it was fully consolidated, as this reflects the way management reviews and uses internally reported information to make decisions about operating matters and to provide increased transparency to investors on those operations. Group segment figures also include our operations in Guatemala as if they were fully consolidated for all comparative periods, for the same reasons. On November 12, 2021, we acquired the remaining 45% equity interest in our Guatemala joint venture business, and we now fully consolidate our operations in Guatemala. Prior to this date, we held a 55% stake in our operations in Guatemala and accounted for it using the equity method of accounting, along with our operations in Honduras.

 

Revenue, operating profit (loss), EBITDA and other segment information for the three- month periods and years ended December 31, 2022 and 2021, are shown on the following pages.

 

 

 14

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

5. SEGMENT INFORMATION (Continued)

 

Twelve months ended December 31, 2022 (in millions of U.S. dollars)	Group Segment (viii)	Honduras (vii)	Eliminations and transfers	Group
Mobile revenue	3,392	(436)	1	2,957
Cable and other fixed services revenue	2,247	(108)	7	2,145
Other revenue	73	(5)	—	69
Service revenue (i)	5,712	(549)	8	5,171
Telephone and equipment revenue	491	(37)	—	454
Revenue	6,203	(586)	8	5,624
Operating profit (loss)	1,004	(121)	32	915
Add back:
Depreciation and amortization	1,454	(112)	1	1,344
Share of profit in joint ventures (viii)	—	—	(32)	(32)
Other operating expenses (income), net	(1)	3	(1)	2
EBITDA (ii)	2,457	(230)	1	2,228
EBITDA from discontinued operations	24	—	—	24
EBITDA incl discontinued operations	2,482	(230)	1	2,252
Capital expenditure (iii)	(1,042)	85	—	(957)
Spectrum paid	(93)	—	—	(93)
Changes in working capital and others (iv)	(95)	(26)	—	(121)
Taxes paid	(365)	49	—	(316)
Operating free cash flow (v)	887	(122)	1	765
Total Assets (vi)	14,543	(1,004)	660	14,198
Total Liabilities	11,097	(603)	70	10,565

(i)

Service revenue is revenue related to the provision of ongoing services such as monthly subscription fees for mobile and broadband, airtime and data usage fees, interconnection fees, roaming fees, mobile finance service commissions and fees from other telecommunications services such as data services, short message services, installation fees and other value-added services excluding telephone and equipment sales.

 

(ii)

EBITDA is operating profit excluding impairment losses, depreciation and amortization and gains/losses on the disposal of fixed assets.

 

(iii)

Excluding spectrum and licenses.

 

(iv)

‘Changes in working capital and others’ include changes in working capital as stated in the cash flow statement as well as share based payments expense.

 

(v)

Operating Free Cash Flow is EBITDA less capex, less spectrum paid, less change in working capital, other non-cash items (share-based payment expense) and taxes paid. From 2022, the Group changed the definition of Operating Free Cash Flow to include spectrum paid in response to feedback from users of our financial statements who prefer a more comprehensive view of our cash flow generation.

 

(vi)

Segment assets include goodwill and other intangible assets.

 

(vii)

Including eliminations for Guatemala (prior to acquisition) and Honduras as reported in the Group Segment.

 

(viii)

As further explained above, Group Segment numbers include Guatemala (until acquisition in November 2021) and Honduras as if they were fully consolidated, and excludes Africa.

 

 15

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

5. SEGMENT INFORMATION (Continued)

 

Twelve months ended December 31, 2021 (in millions of U.S. dollars)	Group Segment (viii)	Guatemala and Honduras (vii)	Eliminations and transfers	Group
Mobile revenue	3,372	(1,372)	—	2,000
Cable and other fixed services revenue	2,273	(334)	—	1,938
Other revenue	68	(8)	—	60
Service revenue (i)	5,712	(1,715)	—	3,997
Telephone and equipment revenue	503	(240)	—	263
Revenue	6,216	(1,955)	—	4,261
Operating profit (loss)	983	(574)	210	619
Add back:
Depreciation and amortization	1,516	(403)	—	1,113
Share of profit in joint ventures	—	—	(210)	(210)
Other operating expenses (income), net	(5)	—	—	(5)
EBITDA (ii)	2,494	(977)	—	1,517
EBITDA from discontinued operations	121	—	—	121
EBITDA incl discontinued operations	2,615	(977)	—	1,638
Capital expenditure (iii)	(1,065)	238	—	(827)
Spectrum paid	(59)	22	—	(37)
Changes in working capital and others (iv)	(51)	(13)	—	(65)
Taxes paid	(271)	143	—	(127)
Operating free cash flow (v)	1,169	(587)	—	582
Total Assets (vi)	15,484	(6,432)	6,088	15,141
Total Liabilities	12,934	(1,763)	1,229	12,401

 16

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

5. SEGMENT INFORMATION (Continued)

 

Three months ended December 31, 2022 (in millions of U.S. dollars)	Group Segment (viii)	Honduras(vii)	Eliminations and transfers	Group
Mobile revenue	846	(112)	—	735
Cable and other fixed services revenue	551	(28)	2	525
Other revenue	18	(2)	—	17
Service revenue (i)	1,416	(142)	3	1,276
Telephone and equipment revenue	115	(10)	—	105
Revenue	1,530	(152)	3	1,381
Operating profit (loss)	261	(32)	8	238
Add back:
Depreciation and amortization	351	(29)	1	322
Share of profit in joint ventures(viii)	—	—	(7)	(7)
Other operating expenses (income), net	(4)	1	(1)	(5)
EBITDA (ii)	608	(60)	—	548
EBITDA from discontinued operations	—	—	—	—
EBITDA incl discontinued operations	608	(60)	—	548
Capital expenditure (iii)	(199)	19	—	(180)
Spectrum paid	(18)			(18)
Changes in working capital and others (iv)	105	(23)	—	81
Taxes paid	(107)	13	—	(94)
Operating free cash flow (v)	389	(52)	—	338

 17

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

5. SEGMENT INFORMATION (Continued)

 

Three months ended December 31, 2021 (in millions of U.S. dollars)	Group Segment(viii)	Guatemala and Honduras (vii)	Eliminations and transfers	Group
Mobile revenue	863	(236)	—	627
Cable and other fixed services revenue	577	(64)	—	513
Other revenue	17	(2)	—	16
Service revenue (i)	1,457	(302)	—	1,155
Telephone and equipment revenue	139	(39)	—	100
Revenue	1,595	(341)	—	1,254
Operating profit (loss)	270	(92)	25	203
Add back:
Depreciation and amortization	362	(64)	—	297
Share of profit in joint ventures	—	—	(25)	(25)
Other operating expenses (income), net	(14)	—	—	(14)
EBITDA (ii)	618	(157)	—	461
EBITDA from discontinued operations	28	—	—	28
EBITDA incl discontinued operations	647	(157)	—	490
Capital expenditure (iii)	(290)	42	—	(248)
Spectrum paid	(12)	—	—	(12)
Changes in working capital and others (iv)	104	8	—	112
Taxes paid	(72)	24	—	(48)
Operating free cash flow (v)	377	(82)	—	295

 

 

6. OTHER NON-OPERATING (EXPENSES) INCOME, NET

 

The Group’s other non-operating (expenses) income, net comprised the following:

 

in millions of U.S. dollars	Twelve months ended December 31, 2022	Twelve months ended December 31, 2021 (i)	Three months ended December 31, 2022	Three months ended December 31, 2021 (i)
Change in fair value of derivatives (Note 13)	12	3	—	1
Change in fair value in investment in Milvik	(6)	—	(6)	—
Change in fair value in investment in Helios Towers (ii)	—	18	—	—
Change in value of call option and put option liability (Note 3)	(1)	(31)	—	(5)
Exchange gains (losses), net	(84)	(42)	(31)	(9)
Other non-operating income (expenses), net	1	2	1	—
Total	(78)	(49)	(36)	(13)

(i)

Re-presented for discontinued operations (see note 4).

 

(ii)

In June 2021, Millicom disposed of its remaining shareholding in HT.

 

 18

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

7. EARNINGS PER COMMON SHARE

 

Earnings per common share (EPS) attributable to owners of the Company are comprised as follows:

 

in millions of U.S. dollars	Twelve months ended December 31, 2022	Twelve months ended December 31, 2021 (ii) (iii)	Three months ended December 31, 2022	Three months ended December 31, 2021 (ii) (iii)
Basic and Diluted
Net profit (loss) attributable to equity holders from continuing operations	64	618	57	659
Net profit (loss) attributable to equity holders from discontinued operations	113	(28)	—	(16)
Net profit (loss)  attributable to all equity holders to determine the basic profit (loss)  per share	177	590	57	643
in thousands
Weighted average number of ordinary shares for basic and diluted earnings per share	139,049	128,571	170,883	127,519
Potential shares as a result of long term incentive plans	640	549	587	619
Weighted average number of ordinary shares (excluding treasury shares) adjusted for the effect of dilution (i)	139,690	129,120	171,471	128,138
in U.S. dollars
Basic
Earnings (loss) per common share for profit (loss) from continuing operations attributable to owners of the Company	0.46	4.81	0.33	5.17
Earnings (loss) per common share for profit (loss) from discontinued operations attributable to owners of the Company	0.81	(0.22)	—	(0.13)
Earnings (loss) per common share for profit (loss) for the period attributable to owners of the Company	1.27	4.59	0.33	5.04
Diluted
Earnings (loss) per common share for profit (loss) from continuing operations attributable to owners of the Company	0.46	4.79	0.33	5.15
Earnings (loss) per common share for profit (loss) from discontinued operations attributable to owners of the Company	0.81	(0.22)	—	(0.13)
Earnings (loss) per common share for profit (loss) for the period attributable to owners of the Company	1.27	4.57	0.33	5.02

(i)

For the purpose of calculating the diluted earnings (loss) per common share, the weighted average outstanding shares used for the basic earnings (loss) per common share were increased only by the portion of the shares which have a dilutive effect on the earnings (loss) per common share.

 

(ii)

Re-presented for discontinued operations (see note 4).

 

(iii)

As required by IAS 33 ‘Earnings per share’ the impact of the bonus element included within the rights offering (see note 14) has been included in the calculations of the basic and diluted earnings per share for the current year/period and comparative figures have been re-presented accordingly.

 

 19

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

8. INVESTMENTS IN JOINT VENTURES

 

Joint ventures are businesses over which Millicom exercises joint control as decisions over the relevant activities of each, such as the ability to upstream cash from the joint ventures, require unanimous consent of shareholders. Millicom determines the existence of joint control by reference to joint venture agreements, articles of association, structures and voting protocols of the board of directors of those ventures.

 

At December 31, 2022, the equity accounted net assets of our joint venture in Honduras totaled $401 million (December 31, 2021: $406 million). These net assets do not necessarily represent statutory reserves available for distribution as these include consolidation adjustments (such as goodwill and identified assets and assumed liabilities recognized as part of the purchase accounting). Out of these net assets, $3 million (December 31, 2021: $3 million) represent statutory reserves that are unavailable to be distributed to the Group. During the year ended December 31, 2022, Millicom's joint venture in Honduras repatriated cash of $88 million in the form of management fees, dividend advances and repayment of a shareholder loan. For the same period last year, Millicom's joint ventures in Guatemala and Honduras repatriated cash of $62 million, out of which $13 million represented dividends and dividends advances paid to the Company.

 

At December 31, 2022, Millicom had $48 million payables to Honduras joint venture which were mainly made up of loan advances (December 31, 2021: $69 million). In addition, as of December 31, 2021, Millicom had a total receivable from Honduras of $62 million, mainly composed of shareholder loan (representing a sale consideration following a shareholding restructuring in 2020, which was payable in several installments with an expected final settlement in November 2023). During 2022, our operations in Honduras early repaid the related outstanding amount of this loan in its entirety. At December 31, 2022, a total of $13 million corresponding to other operating receivables remain outstanding.

 

The table below summarizes the movements for the year in respect of the Group's joint ventures carrying values:

 

in millions of U.S. dollars	2022
	Honduras (i)
Opening Balance at January 1, 2022	596
Results for the period	32
Dividends declared during the period	(35)
Currency exchange differences	(7)
Closing Balance at December 31, 2022	590

(i)

Share of profit is recognized under ‘Share of profit in the joint ventures’ in the statement of income for the period ended December 31, 2022.

 

9. PROPERTY, PLANT AND EQUIPMENT

 

During the year ended December 31, 2022, Millicom added property, plant and equipment for $823 million (December 31, 2021: $787 million) and received $21 million from disposal of property, plant and equipment (December 31, 2021: $11 million).

 

10. INTANGIBLE ASSETS

 

During the year ended December 31, 2022, Millicom added intangible assets for $345 million of which $195 million related to spectrum and licenses, and $150 million to additions of other intangible assets (December 31, 2021: $164 million of which $29 million related to an adjustment on spectrum and licenses and $135 million to additions of intangible assets) and did not receive any proceeds from disposal of intangible assets (December 31, 2021: nil).

 

During the year ended December 31, 2022, Millicom early terminated an IT software contract and also decommissioned the existing software. As a result, Millicom recorded a settlement provision of $7 million under operating expenses and recorded a decommissioning cost of this software for a total amount of $12 million, as accelerated amortization and impairment charges.

 

 20

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

11. FINANCIAL OBLIGATIONS

 

A. Debt and financing

 

The most significant movements in debt and financing for the year ended December 31, 2022 were as follows. When applicable, local currency amounts are translated in USD using the exchange rate at the time of obtaining them.

 

Luxembourg

 

On January 10, 2022, Millicom placed a SEK 2.2 billion (approximately $239 million) senior unsecured sustainability bond (the "Bond") within its Sustainability bond framework. The Bond is due on 2027 and carries a floating coupon priced at 3m Stibor+300bps, the Bond is listed on the Nasdaq Stockholm sustainable bond list. On January 13, 2022, Millicom executed a swap on the principal amount to hedge it to USD (see note 13).

 

On April 13, 2022, Millicom repaid $100 million of the bridge loan with the proceeds received from the disposal of our operations in Tanzania. The remaining balance of $350 million was repaid in June 2022 with the proceeds of the rights offering (see note 14).

 

Colombia

 

On January 21, 2022, Colombia Movil S.A. repaid $100 million of the outstanding amount of the Syndicated Loan Agreement dated June 8, 2017. On January 19, 2022, the respective cross currency swaps with Bancolombia and JP Morgan for $25 million, each, were terminated.

 

On October 5, 2022 UNE EPM Telecomunicaciones S.A. entered into a credit loan with Bancolombia for COP 85,000 million (approximately $18 million) loan with a variable rate at IBR+margin and a maturity of 1 year. As of December 31, 2022, there is still $50 million outstanding under the syndicated loan, which is covered by cross currency and interest rate swaps.

 

Guatemala

 

On January 27, 2022, our principal subsidiary in Guatemala, Comunicaciones Celulares, S.A. ("Comcel"), completed the issuance of a new 10-year $900 million Bond with a coupon of 5.125% per annum. The proceeds from this bond were used to repay a significant portion of the bridge financing that was used in 2021 to fund the acquisition of the remaining 45% equity interest in the Tigo Guatemala operations (see note 3).

 

On March 31, 2022, Comcel executed a new 5-year $150 million loan agreement with Banco de Desarrollo Rural, S.A.. Proceeds were disbursed on April 27, 2022 and were used to refinance some of the credit agreements Comcel had with Banco Industrial.

 

On November 4, 2022, Comcel announced a tender offer to purchase for cash up to $90 million in aggregate principal amount of the USD $900 million 5.125% Senior Notes (early tender consideration for $822.5 for each $1,000 principal amount of the Notes). On November 20, 2022, Comcel announced that approximately $19 million in principal amount of the Notes, have been accepted and settled on November 21, 2022. Late tender expired on December 6, 2022 with no further tendered Notes. Total consideration amounted to approximately $16 million with a net financial income impact of $3 million given the Notes were repurchased below their par value.

 

Bolivia

 

On July 29, 2022, Tigo Bolivia signed two new loan agreements for a total amount of approximately $8 million and a repayment period of 5 years.

 

Nicaragua and El Salvador

 

On September 12, 2022, Telefonia Celular de Nicaragua, S.A. ("Nicaragua") and Telemovil El Salvador, S.A. de C.V. ("Telemovil") entered into a new Credit and Guaranty Agreement with Bank of Nova Scotia as Administrative Agent and Citigroup and Bladex as Joint Lead Arrangers, and with Millicom International Cellular, S.A. as Guarantor for $225 million Unsecured Term Loan with a 5-year maturity. The allocated portion for Telemovil is $75 million and the allocated portion for Nicaragua is $150 million. The proceeds have been used to partially repay loans with other companies within the Group. The interest rate for this loan is SOFR based plus a margin.

 

Paraguay

 

On November 4, 2022, Telefónica Celular del Paraguay S.A.E. (Telecel) announced a tender offer to purchase for cash up to $55 million in aggregate principal amount of the $550 million 5.875% Senior Notes (early tender consideration for $927.5 for each $1,000 principal amount of the Notes). On November 20, 2022, Telecel announced that approximately $47 million in principal amount of the Notes, have been accepted and settled on November 21, 2022. Late tender expired on December 6, 2022 with no further tendered Notes. Total consideration amounted to approximately $44 million with a net financial income impact of $3 million given the Notes were repurchased below their par value.

 21

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

 

11. FINANCIAL OBLIGATIONS (Continued)

 

Analysis of debt and financing by maturity

 

The total amount of debt and financing is repayable as follows:

 

in millions of U.S. dollars	As at December 31, 2022	As at December 31, 2021
Due within:
One year	180	1,840
One-two years	394	206
Two-three years	564	486
Three-four years	777	843
Four-five years	1,122	758
After five years	3,766	3,610
Total debt and financing	6,804	7,744

 

The table below describes the outstanding and maximum exposure under guarantees and the remaining terms of the guarantees as at December 31, 2022 and December 31, 2021.

 

	Bank and financing guarantees (i)		Supplier guarantees
in millions of U.S. dollars	As at December 31, 2022	As at December 31, 2021	As at December 31, 2022	As at December 31, 2021
Terms	Outstanding and Maximum exposure		Outstanding and Maximum exposure(ii)
0-1 year	13	71	2	82
1-3 years	70	6	—	—
3-5 years	418	223	—	—
Total	501	300	2	82

(i)

If non-payment by the obligor, the guarantee ensures payment of outstanding amounts by the Group's guarantor.

 

(ii)

Guarantee from Tanzania ceased to exist after the completion of the sale of our operations in Tanzania, see note 4.

 

The Group’s interest and other financial expenses comprised the following:

 

in millions of U.S. dollars	Twelve months ended December 31, 2022	Twelve months ended December 31, 2021 (i)	Three months ended December 31, 2022	Three months ended December 31, 2021 (i)
Interest expense on bonds and bank financing	(434)	(329)	(113)	(94)
Interest expense on leases	(124)	(113)	(29)	(29)
Early redemption charges	—	(5)	—	—
Others	(59)	(47)	(5)	(7)
Total interest and other financial expenses	(617)	(495)	(148)	(130)

(i)

Re-presented for discontinued operations (see note 4)

 

 22

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

12. COMMITMENTS AND CONTINGENCIES

 

Litigation & claims

 

The Company and its operations are contingently liable with respect to lawsuits, legal, regulatory, commercial and other legal risks that arise in the normal course of business. As of December 31, 2022, the total amount of claims brought against Millicom and its subsidiaries is $246 million (December 31, 2021: $246 million). The Group's share of the comparable exposure for its joint venture in Honduras is $13 million (December 31, 2021: $13 million).

 

As at December 31, 2022, $25 million has been provisioned by its subsidiaries for these risks in the consolidated statement of financial position (December 31, 2021: $36 million). The Group's share of provisions made by the joint venture was $1 million (December 31, 2021: $1 million). While it is not possible to ascertain the ultimate legal and financial liability with respect to these claims and risks, the ultimate outcome is not anticipated to have a material effect on the Group’s financial position and operations.

 

Taxation

 

At December 31, 2022, the tax risks exposure of the Group's subsidiaries is estimated at $221 million, for which provisions of $38 million have been recorded in tax liabilities; representing the probable amount of eventual claims and required payments related to those risks (December 31, 2021: $342 million of which provisions of $69 million were recorded). The decrease compared to December 31, 2021 mainly relates to the sale of our operations in Tanzania (see note 4) as well as the adherence to a tax amnesty in one of our operations. The Group's share of comparable tax exposure and provisions in its joint venture amounts to $97 million (December 31, 2021: $68 million) and $7 million (December 31, 2021: $3 million), respectively.

 

Capital commitments

 

At December 31, 2022, the Company and its subsidiaries had fixed commitments to purchase network equipment, other fixed assets and intangible assets of $420 million of which $265 million are due within one year (December 31, 2021: $761 million of which $428 million are due within one year). The Group’s share of commitments in the joint ventures is $29 million of which $29 million are due within one year. (December 31, 2021: $41 million and $41 million respectively).

 

13. FINANCIAL INSTRUMENTS

 

Other than the items disclosed below, the fair values of financial assets and financial liabilities approximate their carrying values as at December 31, 2022 and December 31, 2021:

 

in millions of U.S. dollars	Carrying value		Fair value (i)
	As at December 31, 2022	As at December 31, 2021	As at December 31, 2022	As at December 31, 2021
Financial liabilities
Debt and financing	6,804	7,744	6,327	7,817

(i)

Fair values are measured with reference to Level 1 (for listed bonds) or 2.

 

Derivative financial instruments

 

Currency and interest rate swap contracts

 

MIC S.A. entered into swap contracts in order to hedge the foreign currency and interest rate risks in relation to the 2024 SEK 2 billion bond and the foreign currency risk in relation to the 2027 SEK 2.2 billion bond (approximately $211 million and $236 million, respectively, using the exchange rate at the time of the issuance of each bond) senior unsecured sustainability bonds issued in May 2019 and January 2022, respectively). These swaps are accounted for as cash flow hedges as the timing and amounts of the cash flows under the swap agreements match the cash flows under the SEK bond. Their maturity dates are May 2024 and January 2027, respectively. The hedging relationships are highly effective and related fluctuations are recorded through other comprehensive income. At December 31, 2022, the fair values of the swaps amount to a liability of $53 million (December 31, 2021: an asset of $6 million).

 

Colombia and El Salvador operations have also entered into several swap agreements in order to hedge foreign currency and interest rate risks on certain long-term debts. These swaps are accounted for as cash flow hedges and related fair value changes are recorded through other comprehensive income. At December 31, 2022, the fair value of El Salvador swap amounted to nil, (December 31, 2021: a liability of $1 million) and the fair value of Colombia swaps amounted to an asset of $19 million (December 31, 2021: an asset of $15 million). On January 19, 2022, a portion of the cross-currency swaps with Bancolombia and JP Morgan were settled in cash for an amount of $8 million.

 

 23

Unaudited Interim Condensed Consolidated Financial Statements for the three-month period and year ended December 31, 2022

 

13. FINANCIAL INSTRUMENTS (Continued)

 

Interest rate and currency swaps are measured with reference to Level 2 of the fair value hierarchy.

 

There are no other derivative financial instruments with a significant fair value at December 31, 2022.

 

14. RIGHTS OFFERING

 

On May 18, 2022, the Board of Directors of Millicom resolved on a rights offering (the "Rights Offering") granting preferential subscription rights to existing holders of shares and Swedish Depositary Receipts ("SDRs") to subscribe for up to 70,357,088 shares in aggregate.

 

Those who were registered as holders of shares/SDR register on May 23, 2022, received one subscription right for each share ("Share Right") or SDR ("SDR right") held in Millicom. 10 share rights entitled a holder thereof to subscribe for 7 new shares in Millicom and 10 SDR Rights entitled a holder thereof to subscribe 7 new SDRs in Millicom. The subscription price was set at SEK 106 per new SDR and $10.61 per new share. The subscription price in SEK was determined based on the subscription price in U.S. dollars as resolved by Millicom, $10.61 per new share, using the SEK-U.S. dollar exchange rate published by the Swedish Central Bank on May 17, 2022.

 

The record date for participation in the Rights Offering was May 23, 2022. The subscription period ran from May 27, 2022 up to June 13, 2022.

 

The result of the Rights Offering showed that 68,822,675 shares, including those represented by SDRs, have been subscribed for by the exercise of basic subscription rights. The remaining 1,534,413 shares, including those represented by SDRs, were allotted to those investors who subscribed for them pursuant to over subscription privileges. The Rights Offering was thus fully subscribed, and Millicom received proceeds amounting to approximately $717 million after deducting underwriting commissions and other offering expenses of $30 million.

 

The Rights Offering resulted in the issuance of 70,357,088 new shares, which increased the number of outstanding shares in Millicom from 101,739,217 to 172,096,305. As a result, the share capital increased by $106 million to $258 million from $153 million. The remaining $611 million have been allocated to the Group's share premium account.

 

15. SUBSEQUENT EVENTS

 

Potential acquisition

 

On January 25, 2023, Millicom confirmed that a potential acquisition of all outstanding shares in Millicom is being discussed with Apollo Global Management and Claure Group. There is no certainty that a transaction will materialize nor as to the terms, timing or form of any potential transaction.

 

Colombia financing

 

On January 5, 2023, UNE issued a COP230 billion (approximately $50 million) bond consisting of two tranches with three and four and a half-year maturities. Interest rates are variable, based on CPI + a margin, and are payable in Colombian peso.

 

 24

 

Item 2

Earnings Release Q4 2022

Luxembourg, February 10, 2023

Millicom closes 2022 with robust free cash flow

Highlights Q4 2022*

*See page 11 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures.

Millicom Chief Executive Officer Mauricio Ramos commented:

"2022 was a strong year for Millicom. Operationally, we gained or sustained mobile and fixed market share in the vast majority of our markets, and we continued to successfully execute on our strategy to accelerate growth in B2B. In Mobile, we continued to invest to modernize and upgrade our networks, and we were the first to introduce 5G service in Guatemala. In Home, we continued to expand our network to reach 822,000 new homes, and we pivoted our new build activity toward fiber-to-the-home. We now reach 12.6 million homes, of which 730,000 are already fiber.

Despite a more challenging macroeconomic and competitive environment, we achieved Equity Free Cash Flow¹ of $171 million, in line with our budget and consistent with our three-year target, thanks to robust organic OCF growth of 8.4%.

¹ Excluding Africa

Earnings Release Q4 2022

These results demonstrate Millicom's ability to adapt to changing market conditions and reflect the strength of our team, our brand, and the quality of the services we provide, backed by state-of-the-art networks and infrastructure.

In 2022, we also validated our science-based targets and were recognized as one of the top five employers globally in the Great Place to Work survey. I want to thank our 20,000 employees for their continued hard work and dedication. I am confident that, together, we will deliver another outstanding performance in 2023."

Financial Targets

As communicated on 14 February 2022, Millicom’s financial targets are:

Subsequent Event

On January 25, 2023, Millicom confirmed that a potential acquisition of all outstanding shares in Millicom is being discussed with Apollo Global Management and Claure Group. There is no certainty that a transaction will materialize nor as to the terms, timing or form of any potential transaction.

Earnings Release Q4 2022

Group Quarterly Financial Review - Q4 2022

(i) Since acquiring the remaining 45% equity interest on November 12, 2021, the Guatemala business is fully consolidated in our financial statements.

The consolidation of Guatemala is the most important factor affecting the comparison between Q4 2022 and Q4 2021. For brevity purposes, we omit repeated mentions of the Guatemala transaction when discussing the reasons for changes in financial performance year-on-year. To facilitate comparisons, proforma income statement data are included in the Financial & Operating Data Excel file published at www.millicom.com/investors alongside this earnings release.

In Q4 2022, revenue grew 10.1% year-on-year, as the Guatemala transaction more than offset the impact of a weaker Colombian peso, which depreciated 8.5% during the quarter and 17.7% year-on-year. Excluding these effects, revenue increased 0.9% on an organic basis, as service revenue growth of 2.3% was partially offset by a 14.2% decline in equipment sales, mostly due to consumers lengthening handset replacement decisions in light of the weaker macro backdrop.

Cost of sales increased 7.2% year-on-year, reflecting the Guatemala transaction and higher content costs related to the World Cup and newly launched soccer content, as well as higher bad debt expenses reflecting growth in our post-paid subscription businesses. Operating expenses increased 3.4% year-on-year due to the full consolidation of Guatemala. Excluding the Guatemala transaction, operating expenses were down slightly, as lower selling and marketing costs offset higher energy costs.

Earnings Release Q4 2022

Depreciation increased 9.7% year-on-year to $242 million, while amortization rose 4.7% to $81 million, both reflecting the Guatemala transaction. Other operating income of $5 million in Q4 2022 compares to an income of $14 million in Q4 2021. As a result of the above factors, operating profit increased 17.2% year-on-year.

Net financial expenses rose $9 million year-on-year, due to higher average debt levels to fund the Guatemala acquisition, partially offset by the positive effect of the weaker Colombian peso on our peso-denominated debt. Other non-operating expense of $36 million compares to $13 million in Q4 2021 related mostly to increased foreign exchange losses in Q4 2022 due to the depreciation of the Paraguayan guarani and the Colombian peso.

Tax expense decreased to $22 million in Q4 2022 from $92 million in Q4 2021, mainly due to changes in deferred taxes in Colombia and the effect of the Guatemala consolidation. Non-controlling interests of $15 million in Q4 2022 compared to $20 million in Q4 2021 reflecting our partners' share of net losses in Colombia.

Net profit attributable to owners of the company was $57 million, or $0.33 per share, compared to a net profit of $643 million ($5.04 per share) in Q4 2021, which included a one-time non-cash gain of $670 million on the Guatemala transaction. The weighted average number of shares outstanding during the quarter was 170.88 million. As of December 31, 2022, there were 172.10 million shares issued and outstanding, including 1.21 million held in treasury.

Cash Flow

Given meaningful seasonal variations, commentary in this section emphasizes year-to-date rather than quarterly performance.

Operating Free Cash Flow (OFCF) increased 31.5% or $183 million to $765 million in 2022, with most line items impacted primarily by the consolidation of Guatemala. Working capital investment of $136 million in 2022 reflects the impact of weaker foreign exchange rates on balances, VAT applied on Capex in Colombia, and for the decommissioning of towers and CPEs.

Taxes paid increased to $316 million in 2022 from $127 million in 2021, primarily due to the consolidation of Guatemala, as well as $40 million related to a tax amnesty. Finance charges increased $52 million year-on-year to $403 million due to higher average debt levels in 2022 compared to 2021 to fund the Guatemala transaction.

Lease interest and lease principal payments totaled $285 million in 2022, up $8 million from $277 million in 2021, due to the Guatemala consolidation, expansion of our network, as well as higher payments on renewals, partially offset by the effect of a weaker Colombian peso on leases denominated in local currency in that country. Finally, repatriation from joint ventures and associates was $88 million in 2022, an increase of $25 million compared to 2021, due to increased repatriation from Honduras, which continues to contribute meaningfully to Group cash flow.

Earnings Release Q4 2022

Equity Free Cash Flow (EFCF) in 2022 was $161 million, including an outflow of $10 million related to the Africa operation. Excluding Africa, EFCF was $171 million in 2022, in line with our guidance range of $150-200 million for the year and consistent with our 2022-2024 cumulative EFCF target of $800 million to $1 billion.

* See page 11 for a description of non-IFRS measures discussed in the above table. On November 12, 2021, we acquired the remaining 45% interest in our Guatemala operation, and we began to consolidate Guatemala as of that date. As a result, Cash Flow metrics for 2022 are not directly comparable to those of 2021, which did not include Guatemala. Additionally, cash flow data includes our operation in Tanzania until its disposal on April 5, 2022.

Earnings Release Q4 2022

Debt

* Net Debt, Net financial obligations, EBITDA and Leverage are non-IFRS measures and are IFRS consolidated figures. See page 11 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures. Proforma adjustments relate to the acquisition of the Guatemala operation on November 12, 2021.

Gross debt decreased $61 million during the quarter to $6,804 million as of December 31, 2022, compared to $6,865 million at the end Q3 2022, and the percent of gross debt in local currency² remained unchanged at 40%. Meanwhile, 82% of our debt was at fixed rates³ with an average maturity of 5.7 years, and approximately 62% of gross debt at December 31, 2022 was held at our operating entities, while the remaining 38% was at the corporate level. All these debt metrics were in line with our targets.

The average interest rate on our debt increased to 6.3% from 6.0% at the end of Q3 2022, reflecting the impact of higher interest rates on our floating rate debt. On our dollar-denominated debt⁴, the average rate was 5.5% with an average maturity of 6.4 years as of December 31, 2022, increasing slightly from average rate levels as of September 30, 2022.

Our cash position was $1,039 million as of December 31, 2022, an increase of $155 million compared to $884 million as of September 30, 2022, and 79% was held in U.S. dollars. As a result, our net debt was $5,765 million as of December 31, 2022, a decrease of $216 million during the quarter, reflecting the EFCF generation and the effect of a weaker Colombian peso foreign exchange rates on our local currency debt.

Including lease liabilities of $1,016 million, net financial obligations were $6,780 million as of December 31, 2022, a decrease of $226 million during the quarter. Leverage, which includes lease obligations, was 3.04x as of December 31, 2022, decreasing from 3.12x as of September 30, 2022. Excluding the impact of leases, the ratio of net debt to EBITDAaL was 2.94x, compared to 3.03x as of September 30, 2022.

² Or swapped for local currency

³ Or swapped for fixed rates

⁴ Including SEK denominated bonds that have been swapped into US dollars.

Earnings Release Q4 2022

Operating performance

The information contained herein can also be accessed electronically in the Financial & Operating Data Excel file published at www.millicom.com/investors alongside this earnings release.

Business units

We discuss our performance under two principal business units:

1. Mobile, including mobile data, mobile voice, and mobile financial services (MFS) to consumer, business and government customers;

2. Cable and other fixed services, including broadband, Pay TV, content, and fixed voice services for residential (Home) customers, as well as voice, data and value-added services and solutions to business and government customers.

On occasion, we also discuss our performance by customer type, with B2B referring to our business and government customers, while B2C includes residential and personal consumer groups.

Market environment

Economic activity in our markets remained subdued, while inflation remained elevated during Q4 2022, in line with global trends. Foreign exchange rate volatility increased in some of our markets, with the Colombian peso and Paraguayan guarani down 17.7% and 4.8%, respectively, year-on-year. Currencies in our other markets were broadly stable. Foreign exchange rates and movements are presented on page 15.

Key Performance Indicators

Mobile services

We ended Q4 2022 with 40.6 million customers, an increase of 561,000 during the quarter with customer gains in every country, including more than 200,000 net additions in Paraguay, mostly in prepaid. Postpaid continued its strong momentum, adding 227,000 customers during the quarter, mostly in Colombia.

Year-on-year Mobile ARPU was flat in local currency terms but declined 4.5% on a reported basis mostly due to the effect of the weaker Colombian peso. That said, Q4 Mobile ARPU in Colombia grew for a fourth consecutive quarter on a local currency basis, increasing 8% year-on-year.

Earnings Release Q4 2022

* KPIs re-presented to include Guatemala in all periods and exclude both Africa, which has been classified as discontinued operations, and our joint venture in Honduras, which is not consolidated in the Group figures.

Broadband and other fixed services

At the end of Q4 2022, our networks passed 12.9 million homes, an increase of 205,000 during the quarter and 822,000 during the year. In the quarter, we added 30,000 net HFC/FTTH customer relationships, as we continued to prioritize price discipline amidst a more challenging macroeconomic environment and intense competition in some markets. Penetration on our HFC/FTTH network was 32.8%, down from 33.8% in Q4 2021, as we continued to expand our network during the second half of 2022.

Home ARPU declined 8.9% year-on-year, due largely to the weaker Colombian peso. Organically, Home ARPU declined 3.2%, reflecting increased competition and a shift in mix toward Broadband-only customers, which generate lower ARPU, as well as lower cost and capex. In local currency, ARPU increased in three countries, and we increased prices across our footprint, which may produce improved ARPU trends going forward.

Financial indicators

In Q4 2022, revenue increased 10.1% year-on-year to $1,381 million, while service revenue increased 10.5% to $1,276 million. Adjusting for the acquisition of Guatemala and for currency movements, organic service revenue growth was 2.3% year-on-year, reflecting growth in all business units and in most countries.

Earnings Release Q4 2022

* Service revenue, EBITDA, EBITDA margin, Capex, OCF and organic growth are non-IFRS measures. Capex is defined as capital expenditures excluding spectrum, license costs and lease capitalizations. See page 11 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures.

By business unit, Home service revenue grew 0.8% organically, impacted by lower ARPU from competition pressures in markets such as Colombia and Paraguay as well as the impact of a general strike on economic activity in Bolivia. In our Mobile business, organic service revenue grew a healthy 2.6% year-on-year, driven by postpaid, which grew 9.6%, due to customer growth and price increases implemented in the last year. Finally, B2B had its fourth consecutive quarter of mid-single-digit growth, with service revenue growing 5.0% organically, with El Salvador and Paraguay posting the fastest growth and almost all countries growing in 2022.

EBITDA was $548 million, an increase of 18.8% year-on-year. Excluding the acquisition of Guatemala and changes in FX rate, EBITDA increased 1.8% organically year-on-year. By country, EBITDA local currency growth was strongest in El Salvador (11.1%) Nicaragua (7.6%), and Paraguay (6.7%). Guatemala grew 2.6%, its best performance of the year thanks in part to the World Cup, while Colombia was up 4.0%, marking a third consecutive quarter of growth. Panama declined 1.8%, as 2021 benefited from some large B2B contracts, while Bolivia declined 11.8%, impacted by the regulatory change implemented in August as well as the strike during the quarter. Finally, our joint venture (not consolidated) in Honduras experienced strong growth of 13.5%, reflecting both the improved revenue trends in Q4 2022 and an easy comparison against a muted performance in Q4 2021.