Millicom announced its results for the third quarter of the year. Revenue of $1,026 million in Q3 improved from $970 million in Q2, driven by improved performance in Mobile, while operating profit increased to $97 million from $93 million.
The report indicates that the better performance that began in June continued during the third quarter, with solid growth and most of the operating and financial metrics improving sequentially in the third quarter compared to the second quarter of 2020. Likewise, generation healthy cash flow and an ongoing focus on debt reduction.
Regarding its operation in Latin America, the report says that demand for most of its services improved during the quarter, as governments gradually relaxed closures aimed at containing the virus. The company reported experiencing record net increases in both mobile (1.7 million) and cable (157,000) customers, driven in part by reconnection of many customers who had temporarily benefited from its lifeline services.
Service revenues in the region increased by $ 48 million sequentially to $ 1.31 billion in the third quarter compared to $ 1.27 billion in Q2 2020, driven by a significant improvement in prepaid mobile telephony in all countries.
In year-on-year terms, service revenues in Latin America decreased 3.1% organically, improving from a 6.8% drop in the second quarter. EBITDA increased by $ 37 million sequentially to $ 581 million in the third quarter compared to $ 544 million in the second quarter, reflecting higher service revenues as well as reduced delinquencies. The OCF was USD 362 million in the quarter, and USD 1,142 million so far this year is in line with our revised 2020 target of around USD 1.4 billion and similar to 2019.
"During the third quarter, we continued to follow the crisis management playbook we implemented in March, which prioritizes employee and customer safety and retention, keeps our communities connected, and protects cash flow, while also investing to support long term strategic initiatives, such as network investment, digital transformation and expansion of our mobile financial services offering", said Millicom Chief Executive Officer Mauricio Ramos.
The executive highlighted that the recovery evidenced in June continued during the third quarter. "Lockdowns eased in most of our markets, driving record levels of customer additions in our prepaid mobile and residential cable businesses, and revenue increased compared to the second quarter. These trends are encouraging; we are confident that we can achieve our revised 2020 target of generating about $1.4 billion of OCF, and we have reduced our net debt by about $240 million since the end of March."
Finally, in terms of operational and financial performance, Ramos assessed that it still remains below pre-COVID levels, especially in mobile postpaid and B2B. "Our operating and financial performance still remains below pre-COVID levels, especially in postpaid mobile and B2B, and the countries where we operate continue to face unprecedented health and macroeconomic challenges. As a
result, we continue to follow a prudent approach in our planning for the year ahead. That said, we remain bullish about the long term growth potential we see in our markets, and we continue to invest to capture that opportunity," concluded.