Liberty Latin America Ltd. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Core Business Performance: Added over 100,000 postpaid net adds in Q3, $1.1 billion revenue, and adjusted OIBDA $433 million with 7% rebased year-over-year growth.
• Hurricane Melissa: Acknowledged hardship in Jamaica, 100% staff safe, mobile traffic at 80% of pre-hurricane levels, fixed network over 40% online, and parametric insurance to aid recovery.
• Individual Segments:
  • Liberty Caribbean: Strong quarter with postpaid mobile additions, 5G launch in Barbados, and discussed impact of Hurricane Melissa.
  • C&W Panama: Postpaid net adds, B2B revenue growth, and Internet subscriber additions.
  • Liberty Networks: Wholesale strength, enterprise growth, and MAYA-1.2 subsea cable upgrade.
  • Liberty Costa Rica: Postpaid mobile growth, broadband subscriber base maintenance, and regulatory issues with Millicom.
  • Liberty Puerto Rico: Mobile performance stability, new postpaid proposition, and fixed network competitive pressure.

Segment Performance

• Cable & Wireless Credit Silo (Liberty Caribbean, C&W Panama, Liberty Networks):
  • Liberty Caribbean: Q3 revenue $369 million, 3% rebased year-over-year growth; adjusted OIBDA $173 million, 10% rebased year-over-year growth.
  • C&W Panama: Q3 revenue $199 million, 6% rebased year-over-year growth; adjusted OIBDA $72 million, 4% rebased year-over-year growth.
  • Liberty Networks: Q3 revenue $117 million, 6% rebased year-over-year growth; adjusted OIBDA $65 million, 10% rebased year-over-year growth.
• Liberty Puerto Rico: Q3 revenue $298 million, 5% rebased year-over-year decline; adjusted OIBDA $96 million, 7% rebased year-over-year growth.
• Liberty Costa Rica: Q3 revenue $155 million, 3% rebased year-over-year growth; adjusted OIBDA $56 million, 7% rebased year-over-year growth.

Guidance

• Q3 was a strong operating quarter with top line expansion and improved adjusted OIBDA.
• Expect robust free cash flow in Q4, mitigated by parametric insurance proceeds.
• Commercial plans remain robust on B2B and residential, focused on the seasonally strong holiday season.
• Cost reduction and efficiency programs to continue into 2026.

Risks

• Impact of Hurricane Melissa on Jamaica's infrastructure and revenue.
• Regulatory challenges in Costa Rica with the Millicom transaction appeal.
• Cash flow challenges from government customer collections.
• Potential disparity between hurricane damage and parametric insurance payout.

Question and Answer

Q: Timing and progress of cost-cutting initiatives, margin drivers for Liberty Networks A: Cost cutting is ongoing and expected to continue into 2026. For Liberty Networks, margin expansion is due to bad debt improvement, ending IRU acceleration, and growth in monthly recurring revenue.

Q: Room for margin expansion in Puerto Rico, cash uses outside Puerto Rico A: Margin expansion in Puerto Rico is expected through revenue growth and continued cost efficiency. Cash allocation outside Puerto Rico includes deleveraging, buybacks, and dividends, with decisions under review.

Q: Competition in Puerto Rico's fixed business, Jamaica network rebuild A: Competition in Puerto Rico's fixed business comes from traditional cable; initiatives in Puerto Rico's fixed business include new products. In Jamaica, network recovery is ongoing, and Starlink partnership is aiding connectivity.

Q: Device innovation, parametric insurance disparity A: Postpaid growth and device innovation contribute to performance. Parametric insurance is designed to mitigate losses, with quick payout, though there could be potential disparity in damage vs. payout.