Tigo-UNE Posts 3Q 2024 Net Profit, but Outlook Still Dim
Medellin-based internet/cell-phone/cable-TV giant Tigo-UNE – half-owned by Luxembourg-based Millicom – announced November 14 a COP$18.7 billion (US$4 million) net profit for third quarter (3Q) 2024, a sharp improvement from the COP$172 billion (US$38.7 million) net loss in 3Q 2023.
Revenues also rose slightly, to COP$1.35 trillion (US$304.4 million), from COP$1.349 trillion (US$304.2 million) in 3Q 2023.
So far this year (January through September), Tigo-UNE has suffered a net loss of COP$114 billion (US$25.7 million), a sharp improvement over the COP$605 billion (US$136 million) net loss for nine-months 2023.
In efforts to cut losses, Medellin’s city-owned UNE EPM Telecommunications – the 50% owner of Tigo-UNE – announced on October 1 further cuts in employment, saving COP$18 billion (US$4 million).
The company also dissolved its Edatel telecom subsidiary last month, in another cost-cutting move.
“For the third quarter of 2024 compared to the same quarter of 2023, the company operated in a highly competitive, regulated market subject to the impact of macroeconomic variables, for which it faced constant challenges at the market level that could impact its commercial and financial development,” Tigo-UNE explained.
Because of its tough financial situation, the company has launched a “continuous review of rates with suppliers and third parties to increase cash flow efficiencies and profitability” as well as “limiting investment budgets only to the growth, expansion and/or maintenance of the mobile and fixed network throughout the country to maintain its customer base.”
As a result, “a better net result is shown in 3Q 2024 versus the third quarter of 2023, derived from the good operational and commercial performance of its subsidiaries,” according to the company.
Despite the profit gain in 3Q 2024, “there was a decrease in the company’s revenues, mainly due to the reduction in commercial and sales activity in the household business unit — television, internet and fixed-line telephone services — generated mainly by the slowdown in the market and the industry in general, which has been impacted by macroeconomic variables such as inflation, exchange rates and market competition with lower offers and rates,” according to Tigo-UNE.
“However, this lower commercial activity in terms of revenue was offset by a reduction in the company’s operating costs and expenses, which generated a positive result in EBITDA (earning before interest, taxes, depreciation and amortization) and better compared to the same quarter of 2023.
“Consequently, UNE constantly monitors the entry of new or potential competitors, changes in purchasing or demand trends, regulatory environments, movements in macroeconomic and market variables that allow it to potentially anticipate or infer changes that may impact its operational, financial or commercial efficiency and take business opportunities in an agile manner;” the company added.
Earlier this year, the Medellin City Council voted to approve the sale of UNE-EPM’s 50% interest in Tigo-UNE — effectively aiming to abandon the city’s misadventure into the high-tech, high-cost telecom/internet/cell-phone businesses more than a decade ago.
