Millicom: Execution Leaves Much To Be Desired as Ownership, Colombia Questions Swirl

Millicom has taken several twists and turns over the past month, most recently announcing it will miss its target for cumulative free cash flow from 2022-24, which it set with much fanfare 16 months ago. Millicom now expects this figure to reach at least $500 million, down from $800 million-$1 billion, on higher spectrum costs, elevated financing expenses, heavier investment in Guatemala, and weaker fixed-line results. We continue to believe the firm holds attractive investments in multiple Latin American countries, but we believe major changes are needed to improve execution. We had already expected the firm would fall short of its near-term cash flow targets, but our fair value estimate assumes Millicom gradually returns to mid-single-digit revenue growth, which current management has struggled to deliver.