Mauricio Ramos, CEO of Millicom, complained about “macro headwinds”, but said the group’s Q1 2016 results demonstrated the Latin America and Africa-focused group had not been blown off course.

Group revenue declined by 8.5 per cent to $1.53 billion, as Millicom felt the impact of adverse currency movements. This effect was driven mostly by the devaluation of the Colombian peso, the Paraguayan guarani and the Tanzanian shilling during 2015.

The company also mentioned that “a more difficult security environment” in El Salvador and price competition in the Colombian mobile market had hit service revenue growth.

Expressed organically, the revenue figures looked more encouraging, with a two per cent revenue increase. Service revenue was up by 4 per cent organically.

Regional breakdown
On a geographic basis, organic revenue growth for LatAm was a sluggish 0.7 per cent to $1.31 billion, while Africa was a more sprightly 12 per cent to $220 million.

By business units, mobile revenue in the quarter was only up by 1 per cent to $1 billion, but Millicom was buoyed by the performance of its cable unit which grew by 11 per cent to $376 million.

Mobile financial services, the third leg of its so-called digital lifestyle strategy, jumped by 18 per cent to $31 million.

Mobile in Latam struggled because of declines in voice and SMS revenue, although Africa was more robust.

Users with smartphones are switching to over the top products, the group said. Mobile data continues to show strong growth, with revenue up by 30 per cent.

“In our mobile business, growth continued to be driven by data uptake. Our focus on ‘volume to value’ has delivered rapid improvements in data profitability. We will continue to drive our commercial strategy to optimise our investments in 4G,” said Ramos.

Operating expenses decreased by 11 per cent compared to Q1 2015, driven by lower corporate costs as well as the currency impact on the group’s cost base. It also benefited from internal efficiency drives.

Net profit was $43 million, compared to a loss of $46 million in the year ago period.