NEW YORK, LONDON and BERTRANGE, Luxembourg, Nov. 4, 2003 (PRIMEZONE) -- Millicom International Cellular S.A. ("Millicom") (Nasdaq:MICC) announced its results for the quarter and nine months ended September 30, 2003 on October 22, 2003. Prior to that release, the accounting treatment of its approximately $310 million 5% Mandatorily Exchangeable Notes (the "Notes") and the Tele2 AB shares into which the Notes are exchangeable was reviewed by PricewaterhouseCoopers, Millicom's auditors.
Subsequently, PricewaterhouseCoopers has advised Millicom that there should be a change of accounting treatment relating to the Notes and the Tele2 AB shares. Based upon this revised professional advice, and to ensure compliance with IFRS, Millicom has decided to adopt this change. As a result, Millicom will mark-to-market on a quarterly basis the value of its holding of Tele2 AB shares, with any resulting changes in fair value being recorded in Millicom's profit and loss statement for such period under the heading "valuation movement on securities". Millicom will also account for the embedded derivative relating to the corresponding Note revaluation and to the potential 30% premium if the price of the Tele2 AB shares is above the reference price of SEK 285 in accordance with the terms of the Notes, at fair value with any subsequent change in its fair value being recorded in the profit and loss statement. The net impact on Millicom's results reflects an economic hedge against a decrease in the price of Tele2 AB shares and the premium that Millicom would realize at maturity if the price of the Tele2 AB shares is above the reference price in accordance with the terms of the Notes.
Accordingly, Millicom is reissuing its results for the quarter and nine months ended September 30, 2003 to reflect the change in accounting treatment relating to the Notes, which results in an increase of $10.7 million in its profit and net shareholders' equity for the nine months ended September 30, 2003. Although changes in the market value of the Tele2 AB shares will impact Millicom's net income on a quarterly basis until the Notes mature in August 2006, the aggregate net impact over this period cannot result in a loss to Millicom.
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 16 cellular operations and licenses in 15 countries. The Group's cellular operations have a combined population under license of approximately 382 million people. In addition, MIC provides high-speed wireless data services in five countries.
This press release may contain certain "forward-looking statements" with respect to Millicom's expectations and plans, strategy, management's objectives, future performance, costs, revenues, earnings and other trend information. It is important to note that Millicom's actual results in the future could differ materially from those anticipated in forward-looking statements depending on various important factors. Please refer to the documents that Millicom has filed with the U.S. Securities and Exchange Commission under the U.S. Securities Exchange Act of 1934, as amended, including Millicom's most recent annual report on Form 20-F, for a discussion of certain of these factors.
All forward-looking statements in this press release are based on information available to Millicom on the date hereof. All written or oral forward-looking statements attributable to Millicom International Cellular S.A., any Millicom International Cellular S.A. members or persons acting on Millicom's behalf are expressly qualified in their entirety by the factors referred to above. Millicom does not intend to update these forward-looking statements.
Millicom International Cellular S.A. Consolidated statements of profit and loss for the three months ended September 30, 2003 and 2002
Quarter ended Quarter ended
Sept 30, 2003 Sept 30, 2002
(Unaudited) (Unaudited)
US$ '000 US$ '000
Revenues 156,668 155,826
Operating expenses
Cost of sales (excluding (36,900) (40,410)
depreciation and
amortization)
Sales and marketing (20,558) (20,093)
General and administrative expenses (16,348) (24,234)
Corporate and license acquisition (5,829) (3,559)
costs
Write-down of assets, net - (7,841)
Depreciation and amortization (32,266) (37,380)
Operating profit 44,767 22,309
Loss on exchange and disposal of - (59,737)
investments
Valuation movement on securities 17,532 (17,462)
Fair value result on financial (26,440) -
instruments
Profit/ (loss) from associated 91 (860)
companies
Profit (loss) before financing and 35,950 (55,750)
taxes
Interest expense (36,044) (49,709)
Interest income 3,396 3,188
Income for financial instruments - 22,911
Exchange loss, net (1,796) (2,199)
Profit (Loss) before taxes 1,506 (81,559)
Taxes (10,749) (5,844)
Loss after taxes (9,243) (87,403)
Minority interest (3,962) (2,417)
Loss for the quarter (13,205) (89,820)
Basic and diluted loss per common (0.81) (5.51)
share (US$)
Weighted average number of shares and
diluted potential shares in the period 16,325 16,287
(in thousands)
Millicom International Cellular S.A. Consolidated statements of profit and loss for the nine months ended September 30, 2003 and 2002
9 months ended 9 months ended
Sept 30, 2003 Sept 30, 2002
(Unaudited) (Unaudited)
US$ '000 US$ '000
Revenues 445,249 449,907
Operating expenses
Cost of sales (excluding (107,571) (123,898)
depreciation and
amortization)
Sales and marketing (57,286) (59,995)
General and administrative (52,557) (66,918)
expenses
Corporate and license acquisition (17,100) (16,822)
costs
Write-down of assets, net (310) (9,449)
Depreciation and amortization (90,654) (105,915)
Operating profit 119,771 66,910
Gain (loss) on exchange and 2,965 (33,039)
disposal of investments
Valuation movement on securities 117,405 (305,471)
Fair value result on financial (26,440) -
instruments
Profit/ (loss) from associated 217 (2,540)
companies
Profit before financing and taxes 213,918 (274,140)
Interest expense (91,764) (143,849)
Interest income 4,976 9,126
Gain realized on debt exchange 97,052 -
Other income - 13,571
Income for financial instruments - 20,562
Exchange gain/ (loss), net 6,313 (18,408)
Profit (loss) before taxes 230,495 (393,138)
Taxes (29,101) (19,549)
Profit (loss) after taxes 201,394 (412,687)
Minority interest (12,338) (5,520)
Profit (loss) for the period 189,056 (418,207)
Profit (loss) on a diluted basis 191,188 (418,207)
Basic earnings (loss) per common 11.60 (25.62)
share (US$)
Diluted earnings (loss) per common 9.80 (25.62)
shares (US$)
Weighted average number of shares in
the period (in thousands) 16,298 16,326
Weighted average number of shared
and diluted potential shares in the 19,510 16,326
period (in thousands)
Millicom International Cellular S.A. Consolidated balance sheets as at September 30, 2003 and December 31, 2002
Sept 30, Dec 31,
2003 2002
(Unaudited) (Audited)
US$ '000 US$ '000
Assets
Non-current assets
Intangible assets
Goodwill, net 54,813 10,172
Licenses, net 34,139 84,471
Deferred costs and other 5,624 4,919
non-current assets, net
Tangible assets, net 481,691 458,933
Financial assets
Investment in securities 397,708 220,386
Investment in associated company 1,013 1,013
Pledged deposits 20,507 32,921
Deferred taxation 6,179 8,470
Total non-current assets 1,001,674 821,285
Current assets
Investment in securities - 101,540
Inventories 10,403 6,962
Debtors
Trade debtors, net 106,932 113,221
Amounts due from joint ventures 12,385 14,053
Amounts due from other related parties 4,416 6,806
Prepaid and accrued income 26,456 14,148
Other current assets 32,319 38,453
Time deposits 16,034 16,200
Cash and cash equivalents 134,631 70,451
Total current assets 343,576 381,834
Total assets 1,345,250 1,203,119
Millicom International Cellular S.A. Consolidated balance sheets as at September 30, 2003 and December 31, 2002
Sept 30, Dec 31,
2003 2002
(Unaudited) (Audited)
US$ '000 US$ '000
Shareholders'
equity and liabilities
Shareholders' equity
Share capital and premium 239,633 281,989
Treasury stock (8,705) (54,521)
2% PIK notes 16,053 -
Legal reserve 4,256 4,256
Retained loss brought forward (453,563) (57,719)
Profit (loss) for the period 189,056 (385,143)
Currency translation reserve (91,312) (84,121)
Total shareholders' equity (104,582) (295,259)
Minority interest 23,984 23,733
Liabilities
Non-current liabilities
Deferred taxation 36,574 26,874
Corporate 13.5% debt 136,443 912,539
Corporate 11% debt 395,219 -
2% PIK notes 50,022 -
5% Mandatory Exchangeable 283,173 -
Bond - Debt Component
5% Mandatory Exchangeable 45,320 -
Bond - Embedded Derivative
Other debt and financing 125,932 159,370
1,072,683 1,098,783
Current liabilities
Other debt and financing 105,616 156,666
Trade creditors 93,688 90,945
Amounts due to shareholders - 4,021
Amounts due to other related parties 779 6,487
Accrued interest and other expenses 55,241 42,745
Other current liabilities 97,841 74,998
353,165 375,862
Total liabilities 1,425,848 1,474,645
Total shareholders' 1,345,250 1,203,119
equity and liabilities
Millicom International Cellular S.A. Consolidated statements of cash flows for the nine months ended September 30, 2003 and 2002
Sept 30, Sept 30,
2003 2002
(Unaudited) (Unaudited)
US$ '000 US$ '000
Net cash provided by operating activities 128,322 54,693
Cash flow from investing activities (14,173) 17,206
Cash flow from financing activities (50,464) (79,516)
Cash effect of exchange rate changes 495 (301)
Net increase (decrease) in cash and cash 64,180 (7,918)
equivalents
Cash and cash equivalents, beginning 70,451 56,276
Cash and cash equivalents, ending 134,631 48,358
Millicom International Cellular S.A. Consolidated statements of changes in shareholders' equity for the nine months ended September 30, 2003 and the year ended December 31, 2002
Sept 30, Dec 31,
2003 2002
(Unaudited) (Audited)
US$ '000 US$ '000
Shareholders' equity at January 1 (295,259) 68,894
New shares issued 937 -
Treasury shares used to offset
liability to 2,523 -
shareholders
Purchase of treasury stock - (2,488)
Profit (loss) for the period 189,056 (385,143)
Effect of consolidation
of El Salvador (10,701)
Prolonged decrease in market value - 61,325
Movement in currency translation
reserve (7,191) (37,847)
Issuance of equity instruments
(2% PIK Notes) 16,053 -
Shareholders' equity (104,582) (295,259)
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