Millicom CEO Mauricio Ramos has revealed that work is underway to carve-out its infrastructure assets and mobile money operations from the core business to ensure efficiency.
He used Millicom’s Q3 earnings statement to explain the planned spin offs are intended to optimise the capital structures of each unit so they can each explore wider growth opportunities.
“Millicom had projects underway to separate the two lucrative assets to unlock value in the future,” he stated.
The move would see Millicom, owners of the Tigo brand, join peers across the globe in separating infrastructure assets from the business, with several others subsequently divesting their new units like mobile money completely or taking outside investment.
MTN, for instance, has turned it mobile money unit into a separate company with its own group and country CEOs, while it’s tower unit are in the hands of IHS.
Ramos bullishly noted Q3 had been an “excellent quarter” with all of its units registering a “solid performance”.
Millicom recorded net profit of $5 million compared with a loss of $51 million in the equivalent quarter of 2020.
The turnaround in fortunes was attributed to higher revenue and a “significant” cut in interest costs following debt repayments. Revenue was up 6.5 per cent to $1.1 billion.
Ramos added Millicom had pressed ahead with investments to expand its mobile operation in Colombia and network modernisation plans in El Salvador, Honduras, Paraguay and Bolivia.
Millicom also pumped cash into growing its Tigo Money business ahead of plans to carve out the unit.
It would be recalled that last year, Millicom complete sold out its assets in Africa, including Tigo Ghana, to concentrate on South America. The move is paying off as it is starting to record some marginal profits.