Liberty Latin America Ltd. is an international provider of fixed, mobile and subsea telecommunications services, primarily serving markets across Latin America and the Caribbean. Liberty Latin America operates through several reportable segments, including C&W Caribbean, C&W Panama, Liberty Networks, Liberty Puerto Rico, and Liberty Costa Rica.

Financials

In the fiscal year 2023, Liberty Latin America reported annual revenue of $4,511.1 million and a net loss of $73.6 million. Liberty Latin America generated annual operating cash flow of $897.0 million and annual free cash flow of $312.0 million. These financial results demonstrate the scale and cash-generating capabilities of Liberty Latin America's diversified operations.

Looking at the first quarter of 2024, Liberty Latin America reported revenue of $1,099.4 million, a 1% decrease on a rebased basis compared to the prior year period. This decline was primarily driven by lower performance in the Liberty Puerto Rico segment, which offset growth in other segments. Adjusted OIBDA, a key profitability metric, decreased 7% on a rebased basis to $374.2 million in the first quarter of 2024.

Segment Performance

Liberty Latin America's performance in the first quarter was impacted by several factors. In Liberty Puerto Rico, the final stages of the customer migration and integration activities resulted in higher costs and lower revenue, particularly in the mobile business. However, management expects these headwinds to subside in the second half of 2024, with Liberty Latin America targeting monthly adjusted OIBDA of more than $45 million in the second half of the year.

Across the other segments, Liberty Latin America delivered a solid operational performance. In C&W Caribbean, Liberty Latin America reported 3% rebased revenue growth and 8% rebased adjusted OIBDA growth, driven by strength in both the residential and B2B businesses. C&W Panama also performed well, with 2% rebased revenue growth and 31% rebased adjusted OIBDA growth, benefiting from the integration of the Claro Panama acquisition.

Liberty Networks, the wholesale and enterprise services segment, reported a 3% rebased revenue decline and an 8% rebased adjusted OIBDA decline, primarily due to a decrease in non-cash IRU amortization. However, the underlying enterprise business continued to grow, with a 9% rebased increase in revenue.

In Liberty Costa Rica, Liberty Latin America delivered an impressive 8% rebased revenue growth and 18% rebased adjusted OIBDA growth, driven by strong performance in both the fixed and mobile businesses.

Outlook

Looking ahead, Liberty Latin America provided guidance for the next three years, reiterating its target of $1 billion in cumulative free cash flow and mid-to-high single-digit adjusted OIBDA growth, with capital expenditures expected to remain flat at 16% of revenue.

Liquidity

Liberty Latin America's balance sheet shows $8.1 billion in total debt and $700 million in cash at the end of the first quarter of 2024. Gross leverage stood at 5.0x, with net leverage at 4.6x. Management remains committed to disciplined capital allocation, as evidenced by the $60 million in share repurchases executed in the first quarter and the additional $200 million authorization announced subsequent to the quarter.

Business Overview

Liberty Latin America's geographic diversification and product mix provide resilience, with Liberty Latin America generating revenue from residential and B2B services across fixed, mobile, and wholesale/enterprise offerings. Liberty Latin America's strong network infrastructure and focus on operational efficiency position it well to navigate the competitive landscape and capitalize on growth opportunities in its markets.

Recent Developments

The completion of the customer migration in Puerto Rico marks a significant milestone for Liberty Latin America, allowing it to move off the AT&T systems and focus on driving improved financial performance in the second half of 2024 and beyond. Management's confidence in Liberty Latin America's outlook is reflected in its aggressive share repurchase activity and the additional authorization, which should enhance shareholder value.

Conclusion

Overall, Liberty Latin America is well-positioned for a strong second half of 2024, with the resolution of integration-related headwinds in Puerto Rico, continued growth in its other segments, and a focus on operational efficiency and disciplined capital allocation. Liberty Latin America's diversified business model, robust network infrastructure, and experienced management team suggest a promising path forward for shareholders.