Revenue: MXN223 billion for the third quarter.
Service Revenue Growth: 11.3% in Mexican peso terms; 5.5% at constant exchange rates year-on-year.
EBITDA Growth: 11.9% in Mexican peso terms; 7.2% at constant exchange rates.
Operating Profit: MXN47.4 billion, up 14.2% in Mexican peso terms; 10% at constant exchange rates.
Net Profit: MXN6.4 billion for the quarter.
Net Debt: MXN443 billion as of September, increased by MXN47.3 billion since December 2023.
Capital Expenditure: MXN86.7 billion for the nine months to September.
Subscriber Additions: 1.8 million total, with 1.4 million postpaid and 468,000 prepaid additions.
Fixed Broadband Access Growth: 327,000 new connections in the quarter.
Release Date: October 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
America Movil SAB de CV (AMXOF) added 1.8 million subscribers in the third quarter, with significant contributions from Austria, Brazil, Colombia, and Mexico.
Service revenue expanded by 11.3% in Mexican peso terms, with EBITDA increasing by 11.9%, reflecting strong operational performance.
The company achieved a net profit of MXN6.4 billion, nearly tripling from the previous year, driven by higher operating profit and reduced financing costs.
America Movil SAB de CV (AMXOF) maintained a low leverage ratio, ending the quarter at 1.34 times last 12 months EBITDA, aligning with their Investor Day commitments.
The company received a third-year A rating upgrade by MSCI, highlighting improvements in corporate governance, security, and data privacy.
Negative Points
The company experienced disconnections in the prepaid segment, particularly in Brazil and Mexico, with 243,000 and 136,000 disconnections respectively.
Net debt increased by MXN47.3 billion relative to December 2023, partly due to the depreciation of the Mexican peso impacting non-peso financial obligations.
Despite growth in service revenue, the decline in PayTV revenue continues, albeit at a less significant rate.
The competitive dynamics in the fixed broadband market in Mexico remain challenging, with increased competition impacting net additions.
Currency depreciation in Latin America poses potential risks to shareholder remuneration and CapEx plans, although no changes have been announced yet.
Q & A Highlights
Q: Can you provide an update on the competitive dynamics of the fixed broadband market in Mexico and your CapEx guidance for 2024? A: The competition in Mexico’s fixed broadband market is intense. We’ve been proactive in upgrading our network, with 84% of our broadband connections now on fiber. We’ve also launched new packages to enhance market competitiveness. Regarding CapEx, we are on target to spend around $7.2 billion this year, as planned. – Daniel Hajj Aboumrad, CEO; Carlos Garcia Moreno, CFO; Oscar Von Hauske Solis, COO
Q: What are your observations on the macroeconomic environment in Latin America and its impact on customer behavior? A: Prepaid services are sensitive to economic conditions, affecting recharge rates. However, postpaid services are performing well, with customers upgrading to better handsets and more data. We expect this trend to continue into 2025. – Daniel Hajj Aboumrad, CEO; Carlos Garcia Moreno, CFO
Q: Could you elaborate on your debt strategy and how you are managing FX impacts? A: We are not looking to take on additional debt and have reduced our leverage. Our strategy focuses on refinancing existing debt, primarily in local currencies, to maintain our current debt levels. – Carlos Garcia Moreno, CFO
Q: What are your plans for M&A in Latin America, and how are you positioning the company strategically? A: We are not actively pursuing M&A opportunities in Latin America. Our focus is on growing organically by investing in technology and improving customer service. We are consolidating our operations in Chile and enhancing our network capabilities. – Daniel Hajj Aboumrad, CEO
Q: How are you addressing the competitive dynamics in the Brazilian broadband market? A: We are the leaders in high-speed internet in Brazil, with significant market share. We continue to upgrade our network and offer innovative packages to maintain our competitive edge. – Oscar Von Hauske Solis, COO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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Publish date : 2024-10-16 16:02:00
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