6-K 1 aug0205_6k.htm

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For August 2, 2005

Commission File Number: 000-22828

MILLICOM INTERNATIONAL

CELLULAR S.A.

75 Route de Longwy

Box 23, L-8080 Bertrange

          Grand-Duchy of Luxembourg          

(Address of principal executive offices)

     Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F   X   Form 40-F      

     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ___

     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ___

     Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

         Yes         No   X  

     If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ____________

MILLICOM INTERNATIONAL CELLULAR S.A.

INDEX TO EXHIBITS

Items

1. Press release dated August 2, 2005

The information contained in this report is incorporated by reference into Registration Statement No. 333-111779.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MILLICOM INTERNATIONAL CELLULAR S.A.
	(Registrant)
Date: August 3, 2005	By: /s/ Bruno Nieuwland
	Name:	Bruno Nieuwland
	Title:	Chief Financial Controller
	By: /s/ Marc Beuls
	Name:	Marc Beuls
	Title:	President and Chief Executive Officer

MILLICOM INTERNATIONAL CELLULAR S.A.

August 2, 2005

MILLICOM INTERNATIONAL CELLULAR S.A. ANNOUNCES RESULTS
FOR THE PERIOD ENDED JUNE 30, 2005

• 21% increase in Revenues for Q2 05 to $261.4m (Q2 04: $216.0m)
• Profit for Q2 05 of $4.9m (Q2 04: profit of $14.3m) ⁽ⁱⁱⁱ⁾
• Basic Earnings per common share for Q2 05 of $0.05 (Q2 04 Earnings per share: $0.17) ⁽ⁱⁱⁱ⁾
  
  
• 23% increase in Revenues for the first half of 2005 to $530.3m (2004: $429.9m)
• Loss for the first half of 2005 of $6.4m (2004: profit of $28.9m) ⁽ⁱⁱⁱ⁾
• Basic Earnings / (Loss) per common share of ($0.06) for the first half of 2005 (2004: $0.38) ⁽ⁱⁱⁱ⁾

New York, Stockholm and Luxembourg – July 25, 2005 – Millicom International Cellular S.A. (Nasdaq Stock Market: MICC, Stockholmsbörsen and Luxembourg Stock Exchange: MIC), the global telecommunications investor, announced results for the quarter and six months ended June 30, 2005.

Financial summary for the quarters ended June 30, 2005 and 2004

				June 30 2005		June 30 2004(iii)		Change
Worldwide subscribers (i)
-	proportional cellular (ii)			5,836,160		4,421,185		32%
-	total cellular			7,205,649		6,372,367		13%
US$ ‘000
Revenues				261,381		216,049		21%
Operating profit				51,451		58,574		-12%
Profit for the period (iii)				4,877		14,323		-
Basic earnings per common share (US$) (iii)				0.05		0.17		-
Diluted earnings per common share (US$)(iii)				0.05		0.16		-
Weighted average number of shares (thousands)				98,750		86,094		-
Weighted average number of shares and
potential dilutive shares (thousands)				99,599		89,601		-

(i)	Subscriber figures represent the worldwide total number of subscribers of cellular systems in which Millicom has an ownership interest.
(ii)	Proportional subscribers are calculated as the sum of Millicom’s percentage ownership of subscribers in each operation.
(iii)	Comparative information restated as a result of the adoption of IFRS 2, “Share-based Payment”

Marc Beuls, Millicom’s President and Chief Executive Officer stated:

“Millicom’s second quarter saw the end of our ten year BCC in Vietnam. Central America is Millicom’s largest region, accounting for 36% of revenue for the year to date. In Pakistan, Paktel GSM is on schedule to reach the 1 million subscriber mark at the first anniversary of the launch of the GSM network and Paktel has established itself as a solid third operator in Pakistan. We are pleased with the launch of the Talya network in Tehran by RIC. This is the first step towards eventually obtaining ownership for Millicom in one of the most promising markets for mobile telephony. In Vietnam, the contacts continue with VMS/VNPT regarding a future cooperation but there is no indication of a potential deal yet.”

FINANCIAL AND OPERATING SUMMARY

•	Subscriber growth:
	›	An annual increase in total cellular subscribers of 13% to 7,205,649, as at June 30, 2005
	›	An annual increase in proportional cellular subscribers of 32% to 5,836,160, as at June 30, 2005
	›	Proportional prepaid subscribers increased by 39% to 5,439,224 as at June 30, 2005 from 3,915,886 as at June 30, 2004
	›	At July 22, 2005, managed subscribers in Iran amounted to 194,713
•	Financial highlights:
	›	Revenues for the second quarter of 2005 were $261.4 million, an increase of 21% from the second quarter of 2004.
	›	Profit for the second quarter of 2005 was $4.9 million, compared to a profit of $14.3 million for the second quarter of 2004.
	›	Net debt excluding the 5% mandatory exchangeable notes amounts to $266.8 million.
	›	Cash and cash equivalents as of June 30, 2005 amounted to $620.4 million.
	›	Capex was $43.2m for the second quarter and $93.1m for the six months ended June 30, 2005.
•	Total cellular minutes increased by 37% for the three months ended June 30, 2005 from the same quarter in 2004 and prepaid minutes increased by 48% in the same period.
•	On April 18, 2005, Millicom’s subsidiary Pakcom reached an agreement with the Pakistan Telecommunications Authority (PTA) for the renewal of its license for 15 years. The payment terms are similar to the terms agreed in 2004 by Paktel, Millicom’s other subsidiary in Pakistan. Pakcom will pay a license fee of $291 million, with 50% payable over three years and the remaining 50% payable over the following ten years. The first down payment for the license was made on April 18, 2005. Pakcom has reached agreement with the PTA with regard to the allocation of spectrum.
•	On May 25, 2005, Rafsanjan Industrial Complex (“RIC”) launched GSM services in greater Tehran. Millicom manages the network for 2 million prepaid customers on behalf of RIC.
•	On May 26, 2005 Millicom acquired additional shares in its joint venture Celtel in Honduras, bringing its ownership to two thirds of the total outstanding shares. Due to the presence of joint control, Celtel continues to be accounted for as a joint venture using proportional consolidation.

2

REVIEW OF OPERATIONS

SUBSCRIBER GROWTH

Compared with the reported figures for the first quarter of 2005, total subscribers decreased by 1,335,946 and proportional subscribers decreased by 123,930 in the second quarter, due to the end of the BCC in Vietnam.

At June 30, 2005, Millicom’s total cellular subscriber base increased by 13% to 7,205,649 cellular subscribers from 6,372,367 as at June 30, 2004. Particularly significant percentage increases were recorded in Pakistan by Paktel (162%), Laos (104%), Senegal (81%) and Ghana (78%). Millicom’s proportional subscriber base increased to 5,836,160 as at June 30, 2005 from 4,421,185 as at June 30, 2004, an increase of 32%.

Within the 5,836,160 proportional cellular subscribers reported at the end of the second quarter, 5,439,224 were prepaid subscribers. Prepaid subscribers currently represent 93% of both total and proportional cellular subscribers.

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		Cellular Operations
		Proportional (i) Subs as at June 30, 2005		Proportional (i) Subs as at June 30, 2004		Annualized Variance			Total Subs as at June 30, 2005		Total Subs as at June 30, 2004		Annualized Variance
South East Asia		439,949		883,229		-50%			737,548		1,939,790		-62%
South Asia		1,736,539		1,063,081		63%			1,923,088		1,271,138		51%
Central America		1,484,783		1,037,755		43%			2,063,247		1,523,790		35%
South America		1,034,673		754,900		37%			1,056,475		774,304		36%
Africa		1,140,216		682,220		67%			1,425,291		863,345		65%
Total Cellular Ops		5,836,160		4,421,185		32	%		7,205,649		6,372,367		13	%

(i) Proportional subscribers are calculated as the sum of Millicom’s percentage ownership of subscribers in each operation.

FINANCIAL RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2005

Total revenues for the three months ended June 30, 2005 were $261.4 million, an increase of 21% from the second quarter of 2004. The Central American market continued to perform strongly, producing a 44% increase in revenues from $70.7 million for the second quarter of 2004 to $101.7 million for the second quarter of 2005, with Guatemala producing growth of 58%. In South America, revenues increased by 26% to $33.4 million, marking a significant improvement in Bolivia and Paraguay, which produced revenue increases of 33% and 21% respectively compared to the second quarter of 2004.

Second quarter revenues for Africa were $48.0 million compared to $35.2 million in the second quarter of 2004, an increase of 36%. Revenues for South East Asia declined by 12% to $45.5 million over the same period, due to the end of the BCC in Vietnam in May 2005.

In South Asia, Millicom recorded revenue growth of 6% to $31.6 million, from $29.7 million in the second quarter of 2004. Paktel GSM has been performing well in a competitive market. The company has been growing its active GSM subscriber base from 386,966 at the end of the first quarter to 675,625 subscribers at the end of the second quarter with a monthly ARPU of approximately $5.

4

FINANCIAL RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2005

Total revenues for the first half of 2005 were $530.3 million, an increase of 23% from the first half of 2004. Revenues for Africa were $95.9 million, increasing by 43%. Revenues for Central America were $190.2 million, an increase of 36%, and for South America, revenues were $64.6 million, up 25%. In South East Asia revenues were $115.8 million and for South Asia, revenues were $61.3 million, up 8% and 2% respectively.

Total cellular minutes increased by 39% for the first half of 2005 compared with the same period in 2004.

COMMENTS ON FINANCIAL STATEMENTS

The depreciation and amortization charge for the second quarter of 2005 of $59.0 million included $14.9 million in relation to Vietnam.

For the second quarter of 2005, write-down of assets includes an impairment charge on the Paktel analog equipment of $4.6 million due to the accelerated migration of subscribers to the GSM network.

For the second quarter of 2005, the decline in the Tele2 shares resulted in a valuation movement of ($43.3) million. This loss was mainly offset by the conversion to the US dollar of the 5% mandatory exchangeable Notes in Tele2 shares (‘the 5% Notes’) resulting in an exchange gain of $33.4 million and the valuation of the embedded derivative on the 5% Notes resulting in a fair value gain of $8.3 million.

Licenses mainly increased following the renewal of the Pakcom license recorded at the net present value of the $291 million future cash outflows payable over 13 years leading to a net present value of $218.8 million. The unpaid portion of the licenses is recorded under the captions “other non-current liabilities” and “other current liabilities”.

5

APPOINTMENT OF A CHIEF FINANCIAL OFFICER

Millicom has recruited David Sach as Chief Financial Officer, starting September 1^st, 2005. David started his career with Pricewaterhouse in New York and later in London. He then moved to Thomson Corporation as VP and CFO of the Professional Publishing division in America. In 1998, David joined EMI Group, first as VP Finance; then as Group Financial Controller. Before joining Millicom, David worked for Equant as Senior VP Finance and Chief Accounting Officer, which he left after Equant was acquired by France Telecom in 2004.

David is a CPA and has a BSc in Accounting from the State University of New York.

Millicom International Cellular S.A. is a global telecommunications investor with cellular operations in South East Asia, South Asia, Central America, South 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 332 million people.

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.

CONTACTS:
Marc Beuls	Telephone:		+352 27 759 327
President and Chief Executive Officer
Millicom International Cellular S.A., Luxembourg
Andrew Best	Telephone:		+44 20 7321 5022
Investor Relations
Shared Value Ltd, London
Visit our web site at www.millicom.com

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APPENDICES

• Consolidated statements of profit and loss for the three months ended June 30, 2005 and 2004
  
• Consolidated statements of profit and loss for the six months ended June 30, 2005 and 2004
  
• Consolidated balance sheets as at June 30, 2005 and December 31, 2004
  
• Condensed consolidated statements of cash flows for the six months ended June 30, 2005 and 2004
  
• Condensed consolidated statements of changes in shareholders’ equity for the six months ended June 30, 2005 and for the year ended December 31, 2004
  
• Quarterly analysis by cluster

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     Millicom International Cellular S.A.

Consolidated statements of profit and loss
for the three months ended June 30, 2005 and 2004

	Quarter ended June 30, 2005			Quarter ended June 30, 2004 (i
					)
	(Unaudited	)		(Unaudited	)
	US$ ’000			US$ ’000
Revenues	261,381			216,049
Operating expenses
Cost of sales (excluding depreciation and amortization)	(69,748	)		(57,415	)
Sales and marketing	(37,653	)		(27,706	)
General and administrative expenses	(31,750	)		(23,223	)
Corporate and license acquisition costs	(5,908	)		(6,492	)
Cost of stock options granted to directors and employees	(893	)		(463	)
Write-down of assets, net	(4,958	)		(84	)
Depreciation and amortization	(59,020	)		(42,092	)
Operating profit	51,451			58,574
Gain on exchange and disposal of investments	1,303			200
Valuation movement on investment in securities	(43,291	)		(19,907	)
Fair value result on financial instruments	8,352			19,647
Interest expense	(35,250	)		(24,061	)
Interest income	5,820			1,488
Exchange gain (loss), net	30,662			(785	)
Profit from associated companies	336			470
Profit before taxes	19,383			35,626
Taxes	(14,711	)		(16,803	)
Net Profit after taxes	4,672			18,823
Minority interest	205			(4,500	)
Net Profit for the quarter	4,877			14,323
Basic earnings per common share (US$)	0.05			0.17
Weighted average number of shares
outstanding in the quarter (in thousands)	98,750			86,094
Profit for the quarter used to determine diluted earnings per
common share	4,877			14,472
Diluted earnings per common share (US$)	0.05			0.16
Weighted average number of shares and potential
dilutive shares outstanding in the quarter (in thousands)	99,599			89,601

(i) Comparative information restated as a result of the adoption of IFRS 2, “Share-based Payment” and IAS 1, revised, “Presentation of Financial Statements”

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Millicom International Cellular S.A.

Consolidated statements of profit and loss
for the six months ended June 30, 2005 and 2004

	6 months ended June 30, 2005			6 months ended June 30, 2004 (i	)
	(Unaudited	)		(Unaudited	)
	US$ ’000			US$ ’000
Revenues	530,272			429,908
Operating expenses
Cost of sales (excluding depreciation and amortization)	(143,107	)		(113,489	)
Sales and marketing	(77,350	)		(56,496	)
General and administrative expenses	(61,773	)		(45,428	)
Other operating income	661			-
Corporate and license acquisition costs	(12,498	)		(13,806	)
Cost of stock options granted to directors and employees	(1,508	)		(623	)
Write-down of assets, net	(28,056	)		(489	)
Depreciation and amortization	(116,286	)		(79,096	)
Operating profit	90,355			120,481
Gain on exchange and disposal of investments	1,525			230
Valuation movement on investment in securities	(98,803	)		(86,013	)
Fair value result on financial instruments	34,577			71,347
Interest expense	(68,537	)		(51,410	)
Interest income	10,739			3,062
Exchange gain, net	50,355			13,639
Profit from associated companies	398			604
Profit before taxes	20,609			71,940
Taxes	(26,679	)		(33,505	)
Net Profit / (Loss) after taxes	(6,070	)		38,435
Minority interest	(316	)		(9,542	)
Net Profit / (Loss) for the period	(6,386	)		28,893
Basic earnings per common share (US$)	(0.06	)		0.38
Weighted average number of shares
outstanding in the period (in thousands)	98,694			76,028
Profit for the period used to determine diluted earnings per
common share	(6,386	)		30,110
Diluted earnings per common share (US$)	(0.06	)		0.34
Weighted average number of shares and potential
dilutive shares outstanding in the period (in thousands)	98,694			89,369

(i) Comparative information restated as a result of the adoption of IFRS 2, “Share-based Payment” and IAS 1, revised, “Presentation of Financial Statements”

9

Millicom International Cellular S.A.
Consolidated balance sheets
as at June 30, 2005 and December 31, 2004

	June 30, 2005		Dec 31, 2004(i)
		(Unaudited)
	US$ ’000		US$ ’000
Assets
Non-current assets
Intangible assets
Goodwill	54,488		37,702
Licenses, net	485,425		277,705
Other intangible assets, net	2,346		2,561
Property, plant and equipment, net	550,483		575,649
Financial assets
Investment in Tele2 AB shares	253,079		351,882
Investment in other securities	3,013		10,540
Investment in associates	4,338		2,220
Embedded derivative on the 5% Mandatory Exchangeable Notes	79,824		45,255
Pledged deposits	31,777		25,544
Deferred taxation	6,037		5,883
Total non-current assets	1,470,810		1,334,941
Current assets
Financial assets
Investment in other securities	15,364		15,327
Inventories	12,896		16,304
Trade receivables, net	114,992		141,972
Amounts due from joint ventures and joint venture partners	8,409		11,715
Amounts due from other related parties	2,216		2,067
Prepayments and accrued income	42,208		36,875
Other current assets	77,508		62,377
Pledged deposits	7,745		9,260
Time deposits	9,163		610
Cash and cash equivalents	620,411		413,381
Total current assets	910,912		709,888
Total assets	2,381,722		2,044,829

(i) Comparative information restated as a result of the adoption of IFRS 2, “Share-based Payment” and IAS 1, revised, “Presentation of Financial Statements”

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Millicom International Cellular S.A.
Consolidated balance sheets
as at June 30, 2005 and December 31, 2004

	June 30 2005			Dec 31, 2004(i
					)
	(Unaudited	)
	US$ ’000			US$ ’000
Shareholders’ equity and liabilities
Shareholders’ equity
Share capital and premium (represented by 99,533,935 shares as of June 30, 2005)	464,013			513,782
Treasury stock (represented by 654,852 shares as of June 30, 2005)	(8,833	)		(8,833	)
4% Convertible Notes – equity component	39,109			-
Stock option compensation reserve	3,805			2,297
Legal reserve	13,577			13,577
Retained losses brought forward	(150,402	)		(277,053	)
Net Profit / (Loss) for the period / year	(6,386	)		66,389
Currency translation reserve	(72,711	)		(71,116	)
Minority interest	42,626			43,351
Total shareholders’ equity	324,798			282,394
Liabilities
Non-current liabilities
10% Senior Notes	537,102			536,629
4% Convertible Notes – Debt component	159,606			-
5% Mandatory Exchangeable Notes – Debt component	315,681			365,006
Other debt and financing	124,227			124,267
Other non-current liabilities	364,862			194,774
Deferred taxation	38,745			39,216
Total non-current liabilities	1,540,223			1,259,892
Current liabilities
Other debt and financing	75,450			88,511
Trade payables	182,226			173,969
Amounts due to joint ventures	2,506			7,760
Amounts due to related parties	341			975
Accrued interest and other expenses	65,092			55,203
Other current liabilities	191,086			176,125
Total current liabilities	516,701			502,543
Total liabilities	2,056,924			1,762,435
Total shareholders’ equity and liabilities	2,381,722			2,044,829

(i) Comparative information restated as a result of the adoption of IFRS 2, “Share-based Payment” and IAS 1, revised, “Presentation of Financial Statements”

11

Millicom International Cellular S.A.
Condensed consolidated statements of cash flows
for the six months ended June 30, 2005 and 2004

	June 30, 2005			June 30, 2004
	(Unaudited	)		(Unaudited	)
	US$ ’000			US$ ’000
Net cash provided by operating activities	162,396			114,605
Cash flow used by investing activities	(142,117	)		(51,004	)
Cash flow provided / (used) by financing activities	186,721			(40,660	)
Cash effect of exchange rate changes	30			(501	)
Net increase in cash and cash equivalents	207,030			22,440
Cash and cash equivalents, beginning	413,381			148,829
Cash and cash equivalents, ending	620,411			171,269

Millicom International Cellular S.A.
Condensed consolidated statements of changes in shareholders’ equity
for the six months ended June 30, 2005 and for the year ended December 31, 2004

	June 30, 2005			Dec 31, 2004
					(i)
	(Unaudited)
	US$ ’000			US$ ’000
Shareholders’ equity as at January 1	282,394			(58,609	)
Derecognition of negative goodwill on January 1	7,627			-
(Loss) / Profit for the period / year	(6,386	)		66,389
Stock options scheme	1,508			1,852
Net proceeds of equity offering	-			203,616
Shares issued via the exercise of stock options	2,866			2,867
Equity component of 4% Convertible Bonds	39,109			-
Conversion of 2% PIK Notes	-			51,417
Movement in currency translation reserve	(1,595	)		(1,918	)
Minority interest	(725	)		16,780
Shareholders’ equity	324,798			282,394

(i) Comparative information restated as a result of the adoption of IFRS 2, “Share-based Payment” and IAS 1, revised, “Presentation of Financial Statements”

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Millicom International Cellular S.A.
Quarterly analysis by cluster

		05 Q2			05 Q1			04 Q4			04 Q3			04 Q2
Total cellular subs
South East Asia		737,548			2,724,656			2,499,307			2,180,800			1,939,790
South Asia		1,923,088			1,677,299			1,458,846			1,300,977			1,271,138
Central America		2,063,247			1,859,130			1,697,036			1,537,904			1,523,790
South America		1,056,475			985,715			937,397			843,384			774,304
Africa		1,425,291			1,294,795			1,120,615			990,168			863,345
Total		7,205,649			8,541,595			7,713,201			6,853,233			6,372,367
Prop cellular subs
South East Asia		439,949			1,227,011			1,125,808			990,144			883,229
South Asia		1,736,539			1,474,479			1,246,132			1,083,736			1,063,081
Central America		1,484,783			1,251,121			1,149,299			1,049,491			1,037,755
South America		1,034,673			964,775			916,465			823,360			754,900
Africa		1,140,216			1,042,704			894,555			790,990			682,220
Total		5,836,160			5,960,090			5,332,259			4,737,721			4,421,185
Revenues (US$ ’000)
South East Asia		45,492			70,296			64,632			59,624			51,803
South Asia		31,611			29,704			24,889			28,006			29,746
Central America		101,652			88,592			87,899			77,660			70,691
South America		33,383			31,211			32,302			30,116			26,573
Africa		47,986			47,954			44,355			38,759			35,193
Other		1,257			1,134			1,609			1,707			2,043
Total		261,381			268,891			255,686			235,872			216,049

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