Liberty Latin America puts capitalization of B2B, submarine cable businesses on hold

Liberty Latin America has decided to put on hold the capitalization of its B2B and submarine cable businesses. 

The company had previously considered spinning-off and capitalizing its submarine cable and B2B operations in markets where it does not have consumer operations, such as Colombia. 

“This was the right track but given the market conditions, including the financial market and macro [scenario], we’ve decided to put things on hold for now,” Liberty Latin America CEO Balan Nair said during the firm’s Q2 earnings call with investors. 

Nair said that Liberty will continue investing in this business to make it grow. 

The firm’s B2B & network business grew 8% year-on-year to US$361mn in 2Q22. Nair said that the economic recovery and project awards in Panama had helped drive its B2B revenues. 

Following the acquisition of Claro Panamá, Liberty Latin America updated its financial guidance to cash flow of US$220mn. 

The company also expects to close a JV with Claro Chile during the second half of 2022. 

RESULTS

Liberty Latin America's revenues grew 4% to US$1.22bn in 2Q22, driven by the addition of US$74mn from the acquisition of the operations of Telefónica Costa Rica, organic growth in C&W Caribbean & Networks, organic declines in VTR and a US$34mn net foreign exchange impact. 

Liberty Latin America reported an operating loss of US$350mn for the quarter. 

“The declines during the 2022 periods are primarily due to goodwill impairments incurred during the second quarter of 2022, which were partially offset by decreases in depreciation and amortization expense as we ceased recording depreciation expense for the Chile JV Entities during the third quarter of 2021 when we began accounting for them as held for sale,” the company said in a release.

Total revenues were up 5% year-on-year in the quarter to US$594mn, while capex fell to US$155mn from US$199mn during 2Q21.

The company said it is focusing on fixed offerings and postpaid mobile services. 

Cable & Wireless Caribbean and Networks ended June with 1.69mn fixed revenue generating units (RGUs) and 1.8mn mobile subscribers, while C&W Panamá ended the month with 503,500 RGUs and 1.4mn mobile subscribers. 

Liberty Puerto Rico had around 1mn RGUs and 1mn mobile subscribers at the end of 2Q22. The operation in Chile, VTR, ended the month with 2.6mn RGUs and 253,600 mobile subscribers, and Liberty Costa Rica had 512,900 RGUs and 2.8mn mobile subscribers.