Good morning, ladies and gentlemen, and thank you for standing by. Today's call is being recorded. I'll now turn the call over to Johanna Escobar, General Manager and Chief Executive Officer of Liberty Costa Rica.

Good morning, and welcome to Liberty Latin America's First Quarter 2023 Investor Call. [Operator Instructions]. Today's formal presentation materials can be found under the Investors section of Liberty Latin America's website at www.lla.com. Following today's formal presentation, instructions will be given for the question-and-answer session. As a reminder, this call is being recorded and will be available under the Investors section of our website. Today's remarks may include forward-looking statements, including the company's expectations with respect to its outlook and the future growth prospects and other information and statements that are not historical facts. Actual results may differ materially from those expressed or implied by these statements. For more information, please refer to the risk factors discussed in Liberty Latin America's most recently filed annual report on Form 10-K and the quarterly report on form 10-Q, most recently filed with the SEC, along with the associated press release. Liberty Latin America disclaims any obligations to update any forward-looking statements or information to reflect any change in expectations or in the conditions on which any such statement or information is based. In addition, on this call, we will refer to certain non-GAAP financial measures, which are reconciled to the most comparable GAAP financial measures, which can be found in the appendices to this presentation, which is accessible under Investors sections of our website. I would now like to turn the call over to our CEO, Mr. Balan Nair.

Thank you, Johanna, and welcome, everybody to Liberty Latin America's First Quarter Results Presentation. I'll begin with our group highlights and an overview of our operating results by reporting segment. Chris Noyes, our CFO, will then follow with a review of the company's financial performance. After that, we will get straight to your questions. As always, I'm joined by my executive team from across the region, and I will invite them to contribute as needed during the Q&A following our prepared remarks. As a point of housekeeping, we will both be working from slides, which you can find on our website at www.lla.com. Starting on Slide 4, and our highlights for the quarter. We continue to drive organic volume growth in Q1, adding 65,000 subscribers across high-speed fixed Internet and mobile postpaid. Internet additions were particularly strong in the quarter, led by improved performance in C&W Caribbean. The results reflect net additions to all of our reporting segments, providing a solid operational start to the year. The group reported adjusted OIBDA of $407 million in the quarter. This represented a rebased growth rate of 4%, which was in line with our expectations and keeps us on track to achieve our financial goals for the year. Moving to our integration activities in Puerto Rico, Panama and Costa Rica. 2023 is a key year which will set us up to deliver significant value for stakeholders. Of note in the quarter, we began to migrate prepaid customers to our newly built mobile platform in Puerto Rico. We are also moving quickly to consolidate our operations in Panama following the lifting of certain restrictions earlier this year. Finally, I'm pleased to announce that in line with our previously stated capital allocation strategy, the company has authorized an additional up to $200 million for share…

Thanks, Balan. Before I begin, as a reminder, we deconsolidated our Chilean business at the start of Q4 2022, so our reported results in 2023 will not include the operating results of VTR. For Q1, we delivered consolidated revenue of $1.1 billion, reflecting a $59 million increase over Q1 2022, after excluding the $171 million of revenue generated by VTR in the prior year quarter. We produced modest rebased revenue growth of 1% in the quarter. Our operating segments of C&W Networks and LatAm, C&W Panama and Liberty Costa Rica were our strongest performers with mid-single-digit rebased revenue growth. With that being said, C&W Caribbean also had a good quarter, but as reported revenue was impacted by a business decision to discontinue our legacy noncore B2B voice transit arrangement in Q1, which accounted for about $10 million of quarterly revenue. Although this will impact our revenue comparable all year, it will not adversely impact our adjusted OIBDA or FCF, as this arrangement was currently anticipated to be slightly loss making. Next, moving to adjusted OIBDA. We posted $407 million in Q1, resulting in a $17 million reported increase over Q1 2022, excluding the $47 million generated by VTR in the prior year quarter. Our rebased growth of 4% was driven largely by Costa Rica, Panama and C&W Caribbean, as we posted our best rebased growth result in 6 quarters. For 2023, we are targeting mid- to high single-digit rebased adjusted OIBDA growth for LLA. However, we expect growth will be somewhat muted in Q2 due in part to our comparative in Puerto Rico. And we expect the lion's share of our adjusted OIBDA growth to be significantly weighted to H2. Slide 12 highlights our key segment results. Beginning on the left with C&W Caribbean, we reported $354 million of revenue…

[Operator Instructions]. Our first question today comes from Jeffrey Wlodarczak from Pivotal Research Group.

I had a couple on Puerto Rico. I was wondering how the TSA migration process is going initially. Is there a disruption for customers from that process? And do we assume that most of that $30 million in integration costs this year is related to the fact that you're operating under TSA and then you're building out your own network? And so that's what goes away next year. And then I have a follow-up.

Jeff, thanks for the question, and I'll ask Naji to jump in here in a second as well. The TSA migration is -- has started, and we started it on the prepaid side of our business, and it's going pretty well. There are disruptions to customers, however, in both the prepaid and postpaid because there are some handsets that just won't operate on our new network and some of the really older handsets with older operating systems. So we are doing 1 or 2 things. We are having customers come into our stores and we update the software for them or we are offering also opportunities for them to change out handsets. So that's really one of the big frictions in the migration. But the systems, we it up. The network is functioning. So the network is the same for prepaid and postpaid, so the network or -- it's already up and running. And the work is progressing really well. On the integration costs, yes, some of the costs do go -- a lot of the costs do go away next year. There's cost that we paid to AT&T as well as cost as we start paying for our licenses already on our new stack. And those are the overlaps this year that can anticipate next year, part of it as. And Naji, do you want to add anything to that?

Yes. I would just add that in terms of our customer migration, for the most of them, the majority will be completely seamless. And for the very few that you had mentioned will require some sort of intervention. But those -- that is a very low percentage. And the plan is to start already some prepaid and postpaid will start shortly, probably in H2.

Got it. And then I guess, this is for any of your market -- sure. Are there any signs of FWA emerging in Puerto Rico or any of your other markets? And then as a wireless operator, is FWA potentially interesting for you as sort of a sell-in for your footprint or maybe like a fixed mobile offering?

FWA hasn't really taken off in our markets for a number of reasons. One, the -- most of our networks everywhere on the fixed side is very strong, not only our network, but our competitor's networks as well. So in almost every market, we are the fiber player or HSC player, a combination of both, and our competitor has somewhat something similar. So FWA would struggle. And almost everywhere, unlike the United States, Mainland, we have ubiquitous coverage. So there's no real pockets for somebody to go exploit FWA. Now we've considered FWA in a few cases. But remember, it is very -- it is a huge spectrum hog. And right now, our focus on our spectrum is really on our mobility services. But there will be some niche cases on it, and it would work for us because we have scale in there. And so it's just a fill-in. But if your business was just a stand-alone FWA business, it's going to be pretty hard.

The next question comes from Cesar Medina from Morgan Stanley.

I had two questions. The first one is you had a very positive surprise on the margins for Costa Rica, certainly way ahead of our expectations. How sustainable these new level of margins is? And then second, to the extent that you can provide the high-level color, any comments on your joint venture in Chile and the overall state of competition? How is competition in Chile evolving after the joint venture?

Sure. Let me answer the Chile question. I'll get to the Costa Rica after that, and I'll ask my colleague Guillermo to also jump in here on the Costa Rica question. On Chile, we have actually a very strong and good partner there in Chile, and we've learned a lot from them. I think they've learned some from us as well. And if I look at Chile, there's a lot of good news that started there. We won the 5G spectrum. We were able to transfer our 3.5 gig. That was a big deal for us. A lot of really good opportunities in mobile. We see the upside in Chile on mobile pricing. Our penetration is pretty low -- so -- in the teens, so we should grow that. We think there will be stability in the fixed business as well as fixed ARPU. And so we feel good, but there's still structural problems in Chile. Make no mistake. The rationale for us to do that transaction is even stronger than ever. And the synergies are already starting to come in. Our local management team has done a really good job. So all-in-all, Chile, I think the jury is still out, but -- and the synergies, once they start kicking fully and is leveraging some of the other opportunities, I think it's going to turn out to be a good story. To Costa Rica, one thing on Costa Rica is some of the margin expansion is also driven by synergies, which, as I indicated on my comments earlier, that comes to an end this year, so we won't have that repeat again next year. And I'll ask my colleague, Guillermo to give any other color he wants to. Guillermo?

Yes. Thank you, Balan, and thank you, Cesar. As you pointed out, we're still being benefited from synergies, and we will continue to do so throughout the year. Also exchange rate is helping in the comparison with last year. But the third element is that we continue to grow. And as you pointed out in the beginning of the presentation, we just launched [indiscernible] FMC proposition, and we're very bullish about it. And the growth prospects, both in fixed and mobile, continue to push the growth in the market in which we have demonstrated to have leadership both in fixed and mobile. So we're optimistic about it.

Thanks, Guillermo.

I'll add, Cesar, I mean I think the margin was quite good in the quarter. And certainly, our expectation would be to continue to improve on that as we go out.

The next question comes from Soomit Datta from New Street Research.

Yes, a couple of questions, if that's okay, please. First of all, on pricing, I think, you talked about lifting prices in Costa Rica in Q1, if I heard that correctly, and there's talk of strategic price lifts elsewhere. I'm not sure if that includes Puerto Rico. But I guess, just stepping back a little bit, it feels like maybe you're more willing to entertain price increases than in the past. I just wondered if you kind of concur with that view. And if so, I wonder what has kind of changed in terms of dynamics on the ground, and that's the first question. I do have a quick follow-up, if that's okay.

Soomit, sure. I think this year, what we're trying to do is perhaps just exercise our muscles a bit on price increases. We haven't done a price increase in a few years. And we wanted to do some very modest, and they are really very modest price increases to see how the market reacts as well as for us to get our commercial teams all set for -- at some point in the future, we will do more traditional price increases. Now make no mistake, our focus is still on volume. And we grow this business with the side of it, and we take some piece where we can. So where we focus on piece in Puerto Rico, we've done on the fixed side, the price increase. I kind of indicated we may do something on the postpaid mobile as well. And the fixed price increase that we took very modest, it was really actually pretty much unnoticed in the market. And in Costa Rica, we will take price increase this quarter. Also very, very minimal in the -- in our Cable & Wireless business as well as in our Panama business, we're looking at prepaid price increases and selectively in certain areas, some fixed price increases as well. I think this year, it's really testing the market a little bit, testing ourselves a little bit how we would do it, get our processes and price increases back on track. And -- but I think the market is ready. And our customers, like I said, for 2, 3 years -- 3 years now, we've not taken any price increases. And I think they kind of appreciate a lot of the product improvements as well. I mean nobody likes price increases. But certainly, people won't like price increases when they don't get anything for it. But we've increased speeds consistently over the last 3 years. We've given better products and then introducing a minor price increase, it's landing pretty well.

Okay. Great to hear. And I guess, perhaps related to that, just on Puerto Rico on the wireless side. The service revenues on wireless look to have stabilized in the first quarter. I think there's a little bit of sort of funny around the accounting there -- or not funny, but there's a little bit of uncertainty around some of the accounting issues. But in principle, do you think you've been through some of the worst of the pricing pressure on wireless in Puerto Rico? And again, you're talking a bit about price increases there, so it sounds like that might help also.

Yes, I think so. I think in Puerto Rico, the price decline, some of it, as you pointed out, is accounting because there's an amortization of the handsets built into the ARPU that you see. I mean it's not the price that our customers see, but in the ARPU that we show in our reporting has some adjustments made for it to account for a portion of the subsidized devices. And I tell you that the subsidized devices is what caught us by surprise because we did try to match everybody during the holidays last year, coming into January of this year on subsidies for handsets, both on retention and acquisition, and it was quite successful. However, having said that, that also meant we were writing a lot of checks for devices and accumulating that into the ARPU as well. And so my colleague there in Puerto Rico, Naji, this quarter -- this last quarter started to throttle back some of the subsidies, and you'll start seeing more stability in the reported ARPU on this. And then like I indicated, we are contemplating a price increase on the postpaid side, not too different than what the mainland wireless operators are doing.

Our next question comes from Kevin Roe from Roe Equity Research.

Follow-on -- a few questions on Cable & Wireless Caribbean. Could you update us on the competitive landscape there in postpaid and in residential broadband? And how are you thinking about macroeconomic pressure potentially impacting that business as we go through the next months and quarters?

Sure. And I'll ask my colleague, Inge, to jump in here as well. We feel really positive about our Caribbean business for a few reasons. One, a lot of the economy is coming back. By the way, it's not coming back to where it was pre-COVID. So you see cruise ships coming back, but it's still a fraction of where it was in 2019. Hotels are back, but occupancy rates are still in the 60% range as opposed to the 80% range pre-COVID. So there's still upside yet to come as the economy fully recovers. Now Inge and her team, together with a lot of my other colleagues in this business have launched a couple of things. One, we've been really focused since COVID on taking cost out, and you'll see the margins expansion here, one, both on the COGS side. As some of you have noticed, COGS has improved. There's some really good work being done by teams, both on the programming side, on the commercial side. That took quite a bit of cost out. And secondly, our commercial teams have also launched some very innovative FMC products that have moved some of our prepaid customers up to postpaid. So I think in many cases, it's a duopoly in a lot of these islands. And our competitor there, Digicel, is quite, I think, motivated like us to create value. And when you have 2 competitors that are looking to create value and providing good service to their customers, I think everybody wins. And that's what we're seeing right now in the post-COVID world. And Inge is my colleague that runs the business, and I'll ask her to jump in here to provide a bit more color, Inge?

Thank you, Balan. So on the economy, similar as Balan, we really see islands -- for islands, there might be a few islands which are not yet fully recovering, but there is room to even recover more. And as per Balan, we see the cruise ships coming. We see the tourists coming, and not yet on the level of before COVID, but we are making massive progress. So -- and you can see that when you're in the islands and you can really feel that uptake. So I think from a macro point of view, I think it will only go -- it will only improve. From a competitive point of view, like Balan said, we have a very good competitor in the Caribbean. And our focus is twofold. One, really understanding every dollar we spend, how can we get the best return; and second, really drive every single aspect of our business, whether it is in mobile, whether it's in fixed through FMC or B2B. We've done quite some work in B2B on the SMB segment. We launched very dedicated propositions, and also our B2B segment in large enterprise is actually also doing really well. So overall, by having the right propositions, with the right cost structure, that's how we believe we are in a very good shape for the coming quarters ahead of us.

Thank you, Inge. That's helpful.

Yes, that's super helpful. Just a quick follow-up, if I may. Balan, broadly, looking across your footprint, are there any new regulatory developments or risks we should be monitoring?

Well, when it comes to regulatory issues, we are always -- our antennas are up. We have a pretty strong team, led by John Winter, my General Counsel, and -- which we constantly monitor all the different puts and takes. I think the thing that we are probably really focused on right now is 5G spectrum and at what point do the spectrum become available, the method on how these governments want to distribute the spectrum, what the local posture would be. That's probably the big one. Most of the governments that -- in areas that we operate are business-friendly. Of course, they are obviously elected by their voters, and they have to cater to that need as well, but they are mostly very business-friendly. And my leadership team has spent a lot of time with respective politicians in the different areas, and we've built quite a good relationship and honest relationship, I would say where we don't go in asking for anything. And -- but we want to make sure that they know that we're here for the communities, we're here for the country, and we are an engine of economic growth for them. And I think they see it the same way as well. So regulatory-wise, yes, our eyes are always open, but there's nothing in the horizon that would worry me at all.

Our final question today comes from Matthew Harrigan from Benchmark.

Balan, I was curious if you could comment what you see structurally in the Latin video market. Certainly, I think you've toyed in the past, what's happened to your in-house streaming product that was [indiscernible] any CPE cost. I mean certainly, that could be attractive in certain markets and certainly for a middle-income demographic. And it also feels like Vix, I mean, Televisa Univision, is mostly focused on Hispanic, U.S. and Mexico. Right now, it feels like Netflix is maybe lagging or stalling out a little bit right now. I'd just be curious -- or we just be curious in terms of what you're seeing in terms of the consumer preferences and how it was working for you, other than really fostering demand for broadband and higher-speed broadband.

Matt, I think you're breaking up a little bit, so I'm going to answer the question that I heard, but you tell me if that's the question that you asked. And on the video side, I think there's 2 parts to the video. And one, we have defensive place where we are the video provider, and that's really Puerto Rico and Costa Rica, where we are the cable company. And it has been defensive for a while until recently where we've kind of found a few opportunities just because some of our competitors are retreating from the video business and not investing in that. So we've seen some stability, unlike the United States, where you see like massive drops in video subscriber base. So you see a more stable video business for us. When it comes to investment in video, we've made 2 investments. One, our IPTV set-top box called Hub TV, which we are now deploying everywhere. And associated with Hub TV, because it's an IP box, we actually do stream content to that device, which means we can also stream content to any other devices as well. But I must tell you, Matthew, this is not a growth product for us. My management team and I are managing the video business as a business to conserve cash, generate new cash and -- but holding it steady. Our focus on growth remains in postpaid, in fixed broadband and in our B2B business. That's where we focus on growth. Video is a steady-state product. And I suspect the Hub TV investment would be our last big investment in video. And so we're going to hold that steady and then focus on the products that our consumers are really demanding right now.

And then very quickly, is the exploration of monetizing subsea network pretty much completely off table or somewhat off the table in this macro environment?

Well, as I mentioned in the last quarter call, we've appointed Ray Collins now to be the General Manager of that business. And Ray, given his background in M&A. And he, by the way, also retains the portfolio of my lead BizDev executive, we're always -- our eyes and ears are always open on that business. The process that we started last year ended without any conclusion because of where the credit markets ended up. And now this is a very high cash-generative business. So when people look at this business, you look at an EBITDA multiple, it's the wrong way to look at that business. It's really a multiple of free cash flow. And when you look at that from a yield standpoint, on a free cash flow, it generates -- I mean you translate that into EBITDA, the EBITDA multiples are actually quite high for this business. If I had to make any sense for us to want to do any transaction here and given where credit markets are, I suspect everybody is going to have different expectations of multiples. But Ray remains open eyes and open ears on this. And if an opportunity comes by that makes sense for us, we'll do it. This management team, we never -- we really ever get our math wrong. So -- and when we see an opportunity that works for us, we'll take it. If not, this is a great free cash flow business for us, and we actually love the business. And I must say, we are looking at ways to invest in it further. And you should hear from myself over the next few quarters and expanding new routes and opening new markets for us to get into.

That does conclude today's question-and-answer session. I'd like to hand back over to Balan Nair for any additional or closing remarks.

Thank you, operator, and thanks, everybody, for taking the time on this call. I must say I feel really good about our first quarter. And first quarter usually sets the trend for the rest of the year, and this is coming in to our expectations. If you had a chance to look at my internal budgets, you will be equally pleased as I am with our first quarter performance. So I thank you all for your support, and we've got lots of work to do here in LLA, and we will continue to work really hard for you.

Thank you. Ladies and gentlemen, this concludes Liberty Latin America's first quarter 2023 investor call. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Latin America's website at www.lla.com. There, you can also find a copy of today's presentation materials. You may now disconnect your lines.