Millicom International cellular S.A. announces results for the quarter ended June 30, 2002

MILLICOM INTERNATIONAL CELLULAR S.A. ANNOUNCES RESULTS FOR THE QUARTER ENDED JUNE 30, 2002 · EBITDA Margin of 43% for the six months ended June 30, 2002* · 58% Annualized Growth in Prepaid Minutes · 28% Annualized Increase in Total Subscribers* · Annualized Increase in EBITDA of 15% in Asia · MIC Systems: Annualized Increase in Revenue of 15% and in EBITDA of 34% New York, London and Luxembourg - August 5, 2002 - Millicom International Cellular SA (Nasdaq Stock Market: MICC), the global telecommunications investor, today announces results for the quarter and six months ended June 30, 2002. Financial summary for the quarters ended June 30, 2002 and 2001 and March 31,2002 June 30 March 31 June 30 2002 2002 2001 Worldwide subscribers (i) * 2,696,376 2,580,792 2,150,501 - proportional cellular 3,748,274 3,581,910 2,936,929 - gross cellular US$ '000 Revenues* 149,015 145,066 148,730 Operating profit before depreciation and 64,340 63,667 60,364 amortization, EBITDA(ii)* EBITDA margin* 43% 44% 41% Profit before financing 55,566 14,053 22,624 and taxes Loss for the period (14,038) (26,340) (38,209) Loss per common MIC share (0.29) (0.54) (0.78) (US$) Weighted average number of 48,916 49,191 48,865 shares (thousands) (i) Subscriber figures represent the worldwide total number of subscribers of cellular systems in which MIC has an ownership interest. Subscriber figures do not include divested operations or the subscribers of Tele2 AB, in which MIC has an 11.8% interest. (ii) EBITDA; operating profit before interest, taxation, depreciation and amortization, is derived by deducting cost of revenues, sales and marketing costs, and general and administrative costs from revenues. * Excluding El Salvador and divested operations N.B. Due to local issues in El Salvador, MIC has temporarily discontinued consolidating El Salvador on a proportional basis with effect from May 2001. All comparatives in this press release, other than those noted in the appendices, exclude divested operations and El Salvador in respect to subscribers and for financial results, up to and including EBITDA. Marc Beuls, MIC's President and Chief Executive Officer stated: "EBITDA for the quarter increased by 7% year-on-year, despite the charges resulting from the cost-cutting exercise which most of MIC's operations implemented in the second quarter. The full benefit in the EBITDA margin will be seen at the start of quarter four. The growth in prepaid minutes was 58%, reflecting the strong underlying growth in the business. MIC Systems showed a very strong rebound from the year 2001, confirming its leading position in the telecoms clearing market. If currency devaluations were excluded, this growth would have been evident in the financial results with year-to-date revenue growing by approximately 7% and EBITDA by 14% on an annualized basis. Against a background of positive operating results, Millicom continues to increase its liquidity. Upstreaming of cash is being maximized and $60 million was received in the first half of 2002. The increasing operating margins combined with the selective sale of assets will provide MIC's liquidity going forward." FINANCIAL AND OPERATING HIGHLIGHTS Subscriber growth: An annualized increase in worldwide gross cellular subscribers of 28% to 3,748,274 as at June 30, 2002 An annualized increase in worldwide proportional cellular subscribers of 25% to 2,696,376 as at June 30, 2002 In the second quarter of 2002 MIC added 166,364 net new gross cellular subscribers An annualized increase in proportional prepaid subscribers of 36% to 2,297,581 as at June 30, 2002 Financial highlights: Revenue for the second quarter of 2002 was $149.0 million, a quarterly increase of 3% EBITDA increased by 7% in the second quarter of 2002 to $64.3 million, from $60.4 million for the second quarter of 2001 The Group EBITDA margin was 43% in the second quarter of 2002, increasing from 41% in the second quarter of 2001 Excluding the non-cellular businesses, the Group EBITDA margin was 45% Total cellular minutes increased by 30% on an annualized basis for the six months ended June 30, 2002, with prepaid minutes increasing by 58% in the same period $60 million has been upstreamed from operations in the first half of 2002 Net operating debt reduced by $12 million in the quarter Interest in the second quarter of 2002 was 8% lower than for the second quarter of 2001 In quarter two 2002 MIC received US$30 million as final payment on the sale of FORA Telecom to Tele2 AB, following the award of GSM 1800 licenses to Tele2 AB in St Petersburg, its surrounding area and two other Russian cities In May 2002 MIC announced it was in the process of selling its holding in MIC Systems including MACH, the world's largest GSM roaming clearing house, expected to be concluded in the third quarter of 2002 REVIEW OF OPERATIONS SUBSCRIBER GROWTH At June 30, 2002, MIC's worldwide cellular subscriber base increased by 28% to 3,748,274 from 2,936,929 at June 30, 2001. Particularly significant annualized percentage increases were recorded in Pakistan and Central America. MIC's proportional cellular subscriber base increased by 25%, to 2,696,376 at June 30, 2002, from 2,150,501 at June 30, 2001. Sanbao Telecom showed an annualized increase in proportional cellular subscribers of 49%. Within the 2,696,376 proportional cellular subscribers reported at the end of the second quarter, 2,297,581 were prepaid customers, representing a 36% increase on the 1,693,093 proportional prepaid subscribers recorded at the end of June 2001. Prepaid subscribers currently represent 85% of gross reported proportional cellular subscribers. FINANCIAL RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2002 Total revenues for the three months ended June 2002 were $149.0 million, an increase of 3% from the previous quarter. Annualized revenue growth was 15% for MIC Systems with total revenue only marginally less than the quarterly record of Q3 2001, reflecting the significant recovery in international roaming related revenues. Sanbao Telecom recorded revenue growth of 6% on annualized basis, with Vietnam producing annualized growth of 21%. The volatile economic situation in Latin America is reflected in the 8% decrease in second quarter revenues relative to 2001. Paraguay and Bolivia saw annualized quarterly revenue reductions of 26% and 24% respectively, although, had it not been for the severe currency devaluations, Paraguay's revenue would have increased. Colombia however, reported an annualized increase in revenue of 21%. In the Central American market, Honduras produced an annualized revenue increase of 6% and Guatemala recorded a 10% increase in revenues from the first quarter of 2002. EBITDA for the three months ended June 30, 2002 was $64.3 million, an increase of 7% from June 30, 2001. EBITDA for Sanbao Telecom increased by 15% in the quarter on an annualized basis reflecting the benefit of cost cutting measures and the 11% growth in MIC Africa was in large part due to the focus on high margin customers in Senegal. The positive effect of cost cutting in Latin America was reflected in the EBITDA for the region, which increased slightly from the first quarter of 2002 despite the adverse currency movement. This is particularly reflected in Colombia and Honduras, which recorded annualized increases of 49% and 20% respectively. The EBITDA margin for MIC was 43% for the quarter. Notably, Vietnam and Honduras recorded quarterly EBITDA margins of 63% and 55% respectively. Upstreaming of cash from operations amounted to $27 million in the quarter. FINANCIAL RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2002 Total revenues for the first half of 2002 were $294.1 million with revenues for Africa and Asia increasing by 8% and 6% respectively and revenues for MIC Systems increasing by 7% relative to the first half of 2001. Revenues for Latin America for the first half of the year decreased by 8%, due significantly to currency devaluations. Had exchange rates held at June 2001 levels, revenue growth for Africa, Asia and Latin America would have been approximately 16%, 8% and 3% respectively. EBITDA for the first half of 2002 was $128 million. Most notably MIC Systems recorded a 23% increase in EBITDA for the six months ended June 30, 2002. The respective increases for Asia and Africa were 17% and 9%. All regions benefited from additional cost cutting measures and, had it not been for the devaluations in Latin America, EBITDA growth on an annualized basis would have been positive. Excluding non-cellular businesses the EBITDA margin exceeded 45% year to date. Growth of minutes in Asia and Latin America was particularly strong with annualized prepaid growth being 73% and 57% respectively, whilst total minute growth was 31% and 34% respectively. The addition of Interfact to MIC Systems has resulted in an 83% increase in total annualized chargeable data for MIC Systems. The high-speed wireless data operations in Argentina and Peru each recorded year-to-date EBITDA margins of 19%. Millicom International Cellular S.A. is a global telecommunications investor with cellular operations in Asia, Latin America and Africa. It currently has a total of 19 cellular operations and licenses in 18 countries. The Group's cellular operations have a combined population under license (excluding Tele2) of approximately 496 million people. In addition, MIC operates the world's largest GSM clearing house and has licenses to provide high-speed wireless data services in eight countries. MIC also has an 11.8 % interest in Tele2 AB, the leading alternative pan-European telecommunications company offering fixed and mobile telephony, data network and Internet services to over 15 million people in 21 countries. The Company's shares are traded on the Nasdaq Stock Market under the symbol MICC. CONTACTS: Marc Beuls Telepho +352 27 ne: 759 101 President and Chief Executive Officer Millicom International Cellular S.A., Luxembourg David Worcester Telepho +352 27 ne: 759 101 Chief Financial Officer Millicom International Cellular S.A., Luxembourg Andrew Best Telepho +44 20 ne: 7321 5010 Investor Relations Shared Value Ltd, London Visit our web site at http://www.millicom.com CONFERENCE CALL DETAILS A conference call to discuss the results will be held at 16:00 Luxembourg time / 10.00 New York time, on Monday, August 5, 2002. The dial-in number is: +44 (0)20 8240 8245 and participants should quote Millicom International Cellular. A live audio stream of the conference call can also be accessed at www.millicom.com. Please dial in / log on 5 minutes prior to the start of the conference call to allow time for registration. A recording of the conference call will be available for 48 hours, commencing immediately after the live call has finished, on +44 (0)20 8288 4459, access code: 402332. APPENDICES Consolidated statements of profit and loss for the three months ended June 30, 2002 and 2001 Consolidated statement of profit and loss for the six months ended June 30, 2002 and 2001 Consolidated balance sheets as at June 30, 2002 and December 31, 2001 Consolidated statements of cashflows for the six months ended June 30, 2002 and 2001 Consolidated statements of changes in shareholders' equity for the six months ended June 30, 2002 and 2001 MIC quarterly analysis by region Millicom International Cellular S.A. Consolidated statements of profit and loss for the three months ended June 30, 2002 and 2001 Quarter ended Quarter ended June 30 2002* June 30 2001** (Unaudited) (Unaudited) US$ '000 US$ '000 Revenues 149,015 164,602 Operating expenses Cost of revenues (43,280) (48,273) (excluding depreciation and amortization) Sales and marketing (19,443) (25,296) General and (21,952) (25,717) administrative expenses Corporate and license (7,465) (6,225) acquisition costs Write-down of assets, (1,319) 585 net Depreciation and (33,414) (36,274) amortization Operating profit 22,142 23,402 Gain on exchange and 34,284 0 disposal of investments Loss from associate (860) (778) companies Profit before financing 55,566 22,624 and taxes Interest expense (46,482) (50,754) Interest income 2,612 5,938 Other income 0 0 Charge for financial (3,169) (4,345) instruments Exchange loss, net (12,962) (8,803) Loss before taxes (4,435) (35,340) Taxes (7,588) (5,692) Loss after taxes (12,023) (41,032) Minority interest (2,015) 2,823 Loss for the quarter (14,038) (38,209) Loss per common share (0.29) (0.78) (US$) Weighted average number of shares 48,916 48,865 outstanding in the period (in thousands) * Excluding El Salvador ** The 2001 figures have been restated to reflect the consolidation of El Salvador under the equity method from May 2001. N.B As a consequence of IAS 39, both negative and positive changes in market value of Tele2 AB are reflected in the shareholders' equity under the caption "revaluation reserve". For the quarter ended June 30, 2001, a positive change of $29.9 million above original acquisition cost was initially recorded in the statement of profit and loss; this has been reversed through the revaluation reserve in this restated statement of profit and loss for the quarter ended June 30, 2001. Millicom International Cellular S.A. Consolidated statements of profit and loss for the six months ended June 30, 2002 and 2001 Total Total 2002* 2001** (Unaudited) (Unaudited) US$ '000 US$ '000 Revenues 294,081 334,396 Operating expenses Cost of revenues (83,488) (96,945) (excluding depreciation and amortization) Sales and marketing (39,902) (51,294) General and (42,684) (52,758) administrative expenses Corporate and license (13,263) (14,513) acquisition costs Write-down of assets, (1,608) (45) net Depreciation and (68,535) (75,171) amortization Operating profit 44,601 43,670 Gain on exchange and 26,698 969 disposal of investments Loss from associate (1,680) (778) companies Profit before financing 69,619 43,861 and taxes Interest expense (94,140) (103,704) Interest income 5,938 12,409 Other income 13,571 8,075 (Charge) income for (2,349) 2,686 financial instruments Exchange loss, net (16,209) (17,969) Loss before taxes (23,570) (54,642) Taxes (13,705) (11,490) Loss after taxes (37,275) (66,132) Minority interest (3,103) 2,634 Loss for the quarter (40,378) (63,498) Loss per common share (0.82) (1.30) (US$) Weighted average number of shares 49,025 48,865 outstanding in the period (in thousands) * Excluding El Salvador ** The 2001 figures have been restated to reflect the consolidation of El Salvador under the equity method from May 2001. N.B As a consequence of IAS 39, both negative and positive changes in market value of Tele2 AB are reflected in the shareholders' equity under the caption "revaluation reserve". For the six months ended June 30, 2001, a negative change of $143.1 million below original acquisition cost was initially recorded in the statement of profit and loss; this has been reversed through the revaluation reserve in this restated statement of profit and loss for the six months ended June 30, 2001. Millicom International Cellular S.A. Consolidated balance sheets as at June 30, 2002 and December 31, 2001 June 30, Dec 31, 2002 2001 (Unaudit (Audited ed) ) US$ '000 US$ '000 Assets Fixed assets Intangible assets Goodwill, net 51,094 52,575 Licenses, net 156,091 164,541 Deferred costs and other non-current assets, 21,061 20,712 net Tangible assets, net 483,905 512,236 Financial assets Investment in securities 330,815 671,802 Investment in associate company 52,098 52,858 Pledged deposits 52,674 47,404 Deferred taxation 2,416 3,785 Total fixed assets 1,150,15 1,525,91 4 3 Current assets Inventories 11,836 12,932 Debtors Trade debtors, net 124,221 136,078 Amounts due from joint ventures 47,941 46,001 Amounts due from affiliates 6,086 9,258 Prepaid and accrued income 33,168 27,228 Other current assets 40,109 35,800 Time deposits 12,548 21,444 Cash and cash equivalents 43,529 56,276 Total current assets 319,438 345,017 Total assets 1,469,59 1,870,93 2 0 Millicom International Cellular S.A. Consolidated balance sheets as at June 30, 2002 and December 31, 2001 June 30, Dec 31, 2002 2001 (Unaudite (Audite d) d) US$ '000 US$ '000 Shareholders' equity and liabilities Shareholders' equity Share capital and premium 281,989 281,989 Treasury stock (54,512) (52,033 ) Legal reserve 4,256 4,256 Retained (loss) profit brought forward (57,719) 80,334 Loss for the period (40,378) (138,05 3) Revaluation reserve (349,334) (61,325 ) Currency translation reserve (72,091) (46,274 ) Total shareholders' equity (287,789) 68,894 Minority interest 15,955 10,262 Liabilities Liabilities due after more than one year Deferred taxation 19,884 20,507 Corporate subordinated debt 955,439 954,601 Other debt and financing 301,305 347,475 1,276,628 1,322,5 83 Liabilities due within one year Other debt and financing 155,457 153,898 Trade creditors 117,022 109,739 Amounts due to shareholders 7,657 7,158 Amounts due to affiliated companies 18,983 18,800 Financial liability 38,714 36,365 Accrued interest and other expenses 50,424 57,981 Other current liabilities 76,541 85,250 464,798 469,191 Total liabilities 1,741,426 1,791,7 74 Total shareholders' equity and liabilities 1,469,592 1,870,9 30 Millicom International Cellular S.A. Consolidated statements of cash flows for the six months ended June 30, 2002 and 2001 June 30 June 30 2002* 2001** (Unaudite (Unaudited d) ) US$ '000 US$ '000 Net cash provided by operating activities 11,480 68,172 Cash flow from investing activities 29,347 (49,690) Cash flow from financing activities (52,924) (47,781) Cash effect of exchange rate changes (650) (1,600) Net increase / (decrease) in cash and cash (12,747) (30,899) equivalents Cash and cash equivalents, beginning 56,276 94,921 Cash and cash equivalents, ending 43,529 64,022 Millicom International Cellular S.A. Consolidated statements of changes in shareholders' equity For the six months ended June 30, 2002 and 2001 June 30 June 30 2002* 2001** (Unaudite (Unaudite d) d) US$ '000 US$ '000 Shareholders' equity at January 1, as 341,191 previously reported Effect of adopting IAS 39, financial (45,264) instruments Shareholders' equity at January 1, as 68,894 295,927 restated Purchase of treasury stock (2,479) - Loss in period (40,378) (63,498) Movement in revaluation reserve (288,009) (160,854) Movement in currency translation reserve (25,817) (9,382) Shareholders' equity (287,789) 62,193 * Excluding El Salvador ** The 2001 figures have been restated to reflect the consolidation of El Salvador under the equity method from May 2001. Millicom International Cellular S.A. Quarterly analysis by region 02 Q2 02 Q1 01 Q4 01 Q3 01 Q2 Gross cellular subs Sanbao 1,659, 1,561, 1,399, 1,248, 1,145, Telecom 039 298 656 900 313 MIC Latin 1,810, 1,738, 1,702, 1,605, 1,551, America* 840 434 368 703 119 MIC Africa 278,39 282,17 264,52 243,71 240,49 5 8 7 8 7 Sub-total 3,748, 3,581, 3,366, 3,098, 2,936, 274 910 551 321 929 El Salvador - - 374,58 379,20 365,46 5 5 0 Divested 0 0 0 231,53 291,55 2 8 Total 3,748, 3,581, 3,741, 3,709, 3,593, 274 910 136 058 947 Prop cellular subs Sanbao 1,063, 994,11 878,77 787,96 713,29 Telecom 509 9 9 4 7 MIC Latin 1,454, 1,404, 1,385, 1,318, 1,277, America* 282 008 599 766 261 MIC Africa 178,58 182,66 172,03 161,08 159,94 5 5 1 0 3 Sub-total 2,696, 2,580, 2,436, 2,267, 2,150, 376 792 409 810 501 El Salvador - - 262,21 265,44 255,82 0 2 2 Divested 0 0 0 123,69 129,77 5 1 Total 2,696, 2,580, 2,698, 2,656, 2,536, 376 792 619 947 094 Revenue (US$ '000) Sanbao 56,925 54,160 49,068 51,728 53,809 Telecom MIC Latin 68,530 69,557 74,555 73,088 74,563 America* MIC Africa 11,964 11,962 11,719 11,467 11,145 MIC Systems 7,141 6,261 5,921 7,464 6,228 Other 4,455 3,126 2,369 3,431 2,985 Sub-total 149,01 145,06 143,63 147,17 148,73 5 6 2 8 0 El Salvador** 0 0 0 0 4,065 Divested 0 0 7,168 12,196 11,807 Total 149,01 145,06 150,80 159,37 164,60 5 6 0 4 2 EBITDA (US$ '000) Sanbao 27,771 27,476 24,456 23,799 24,065 Telecom MIC Latin 30,040 29,926 30,099 32,655 33,414 America* MIC Africa 3,766 4,272 3,280 3,042 3,405 MIC Systems 3,457 2,795 2,732 3,499 2,585 Other (694) (802) (1,286 (1,411 (3,105 ) ) ) Sub-total 64,340 63,667 59,281 61,584 60,364 El Salvador** 0 0 0 0 1,514 Divested 0 0 2,194 2,794 3,438 Total 64,340 63,667 61,475 64,378 65,316 * Excluding El Salvador ** MIC has discontinued proportional consolidation for El Salvador since May 2001 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/08/05/20020805BIT00100/wkr0001.doc http://www.waymaker.net/bitonline/2002/08/05/20020805BIT00100/wkr0002.pdf