America Movil SAB de CV (NYSE:AMOV)
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2 Years : From Feb 2018 to Feb 2020
By Anthony Harrup
MEXICO CITY -- Latin America's largest telecommunications company, América Móvil SAB, had a small net loss in the second quarter as foreign-exchange losses from a weaker Mexican peso offset increases in revenue and operating profits.
The company controlled by billionaire Carlos Slim on Tuesday reported a net loss of 236 million Mexican pesos ($12.5 million), compared with a net profit of 14.3 billion pesos a year earlier.
Revenue in the April-June quarter rose 3.2% to 257.3 billion pesos, with service revenue in local currencies up 2%. Earnings before interest, taxes, depreciation and amortization -- a measure of operating cash flow -- rose 3% to 72 billion pesos. Operating profit was up 4.8% at 32.6 billion pesos.
The Mexican peso weakened against the U.S. dollar during the second quarter as a result of rising U.S. interest rates, investor caution over the future of talks to renegotiate the North American Free Trade Agreement with the U.S. and Canada, and Mexico's July 1 presidential election.
The resulting exchange losses led the company's financial costs to more than double, to 32.2 billion pesos, contributing to the negative net result.
Revenue beat the median expectations of 254.3 billion pesos among analysts polled by The Wall Street Journal, who also expected a net profit of 12.2 billion pesos and Ebitda of 71.9 billion pesos.
América Móvil, which operates in Latin America, the U.S., Austria and parts of Eastern Europe, ended the quarter with 279 million wireless lines and 83.4 million subscriptions to fixed-line services including telephones, pay TV and broadband internet.
The number of wireless customers was little changed from a year earlier, although the company continued to gain contract subscribers while disconnecting prepaid lines as people use more mobile data and make fewer calls.
"Service revenue growth in the mobile space was remarkable both in Brazil and Mexico, 11.9% and 8.7% respectively," América Móvil said.
Ebitda in Mexico grew 14.9%, its biggest increase in nearly 11 years, and in Brazil it rose 9.9%, the sharpest gain in almost three years.
In Mexico, where mobile unit Telcel competes with AT&T Inc. and Spain's Telefónica SA, the company has been recovering margins that were squeezed by regulatory measures against América Móvil as the dominant wireless and fixed-line carrier.
Telcel pays more to connect its customers to rival networks than it charges for receiving incoming calls, and fixed-line unit Telmex has been ordered to separate wholesale and retail services.
"Following our recent meeting with the company, we emerged encouraged that incremental regulatory pressures over the near term are unlikely," Barclays analysts said in a recent note. "With the competitive environment largely stable, focus will likely continue to center on prospects for margin expansion in Mexico."
Write to Anthony Harrup at email@example.com
(END) Dow Jones Newswires
July 17, 2018 19:51 ET (23:51 GMT)
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