Millicom profit plunges 84% despite record cash flow

Millicom International Cellular reported contrasting second-quarter 2026 results. Net profit attributable to company owners dropped 83.9% year over year to $109 million, down from $676 million a year earlier. For the first half of 2026, net profit fell 74.9% to $218 million from $869 million.

By contrast, revenue rose 59.4% year over year to $2.18 billion, with service revenue up 60.1% to $2.04 billion. First-half revenue climbed 52.3% to $4.16 billion from $2.74 billion. Adjusted EBITDA exceeded $1 billion for the first time, rising 58% to $1.01 billion. However, organic revenue growth was 4.3% in the quarter and 4.2% for the first half, reflecting that recent acquisitions in Colombia, Ecuador and Uruguay drove most of the reported expansion.

Equity free cash flow reached a quarterly record of $327 million, up 50.1%, while leverage fell to 2.73x. Management raised its full-year 2026 equity free cash flow target from at least $900 million to around $1.1 billion, and lowered its leverage target to below 2.5x. Capital expenditure climbed 51.2% to $234 million in the quarter and 48.8% to $426 million across the half. CEO Marcelo Benitez noted that Ecuador and Uruguay have reached margins and cash generation aligned with the group average, with early progress seen in Colombia and Chile.

Shareholder distributions expanded alongside the cash flow figures. On August 5, the board approved an interim dividend of $1.50 per share, payable in two equal installments of $0.75 on January 15, 2027, and April 15, 2027. This follows a $3.00 per share dividend declared in May to be paid quarterly over 12 months. In financing moves during July 2026, the company took on five local bank loans in Bolivia totaling roughly $44 million, while Coltel in Colombia repaid about $102 million in credit facilities.

Hedge fund ownership declined from 30 to 26 funds during the quarter, while short interest stood at 3.50% of the float. As of September 17, Millicom traded at a forward price-to-earnings ratio of 10.41.