America Movil S.a.b. De C.v. ((AMX)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call of América Móvil S.A.B. de C.V. painted a generally positive picture, highlighting strong postpaid and revenue growth alongside effective cost management. Despite these achievements, the company faces challenges, particularly with prepaid subscriber disconnections and litigation provisions in Colombia. The sentiment expressed during the call was balanced, reflecting both significant accomplishments and ongoing hurdles.
Strong Postpaid Growth
América Móvil reported a substantial increase in its postpaid client base, adding 2.9 million new clients. Brazil was a major contributor with 1.4 million additions, followed by Colombia with 199,000 and Mexico with 102,000 new postpaid clients.
Revenue Increase
The company achieved a significant revenue increase, with the second quarter revenue totaling MXN 234 billion, marking a 13.8% year-on-year growth. This was driven by a 7.3% rise in service revenue and a 12.5% increase in equipment revenue.
EBITDA Growth
América Móvil’s EBITDA reached MXN 92.4 billion, reflecting an 11.2% increase in Mexican peso terms and a 5.1% rise at constant exchange rates, showcasing the company’s robust financial health.
Net Profit Increase
The company reported a net profit of MXN 22.3 billion, bolstered by significant foreign exchange gains amounting to MXN 11 billion, highlighting effective financial management.
CapEx Management
América Móvil successfully managed its capital expenditures, with net debt decreasing by MXN 7.3 billion over the quarter and CapEx totaling MXN 54.9 billion.
Broadband Growth in Mexico
The company saw a notable increase in broadband accesses, adding 462,000 new connections, with Mexico contributing 231,000 to this growth.
Prepaid Subscriber Disconnections
Despite positive growth in other areas, América Móvil faced challenges with prepaid subscriber disconnections, recording a net loss of 1.1 million prepaid subscribers, particularly in Brazil, Chile, and Central America.
Decline in Voice Lines and PayTV
The earnings call also highlighted a decline in voice lines and PayTV units, with reductions of 164,000 and 61,000, respectively, indicating areas that require strategic attention.
Broadband Revenue Deceleration
There was a slight deceleration in broadband revenue growth, which decreased to 8.2% from 9.8% sequentially, suggesting a need for renewed focus in this segment.
Litigation Provision in Colombia
A provision for litigation in Colombia was noted, impacting the company’s margins and highlighting ongoing legal challenges.
Forward-Looking Guidance
Looking ahead, América Móvil expects continued strong financial performance, with a 13.8% year-over-year revenue increase and robust EBITDA growth. The company anticipates further expansion of its wireless subscriber base and fixed broadband accesses. Despite currency fluctuations slightly affecting the net debt to EBITDA ratio, América Móvil remains committed to disciplined capital expenditure and shareholder returns.
In conclusion, América Móvil’s earnings call reflected a balanced sentiment, with significant achievements in postpaid growth and revenue increase, alongside challenges such as prepaid subscriber disconnections and legal provisions. The company’s forward-looking guidance suggests continued financial strength and strategic focus on expanding its subscriber base and managing expenditures effectively.