BUENOS AIRES, Nov. 7, 2019 /PRNewswire/ --
Note: For the figures included in their FFSS, the
Company has accounted for the effects of inflation adjustment
adopted by Resolution 777/18 of the Comisión Nacional de
Valores ("CNV"), which establishes that the restatement will be
applied to the annual financial statements, for intermediate and
special periods ended as of December 31,
2018 inclusive. Accordingly, the reported figures
corresponding to 9M19 include the effects of the adoption of
inflationary accounting in accordance with IAS
29. Finally, comments related to variations of results
of 9M19 and vs. 9M18 mentioned in this press release correspond to
"figures restated by inflation" or "constant".
- For comparative purposes, it is important to highlight that
the results restated for inflation corresponding to September 2018 contain the effect of year over
year inflation as of September 2019,
which reaches 53.7%.
- Consolidated Revenues of Telecom Argentina amounted to
P$159,699 million in 9M19, of which Service Revenues totaled
P$149,641 million. During the 3Q19, the Company was able to
increase Service Revenues at a faster rate than the level of
inflation (which increased 3.0% in real terms in 3Q19 compared with
2Q19), being this increase related to the demand for higher value
services and achieved in a challenging and volatile context.
Additionally, this had a positive impact over the ARPUs in real
terms, which have mostly experienced a recovery during
3Q19.
- Mobile clients in Argentina
reached 19.0 million in 9M19, increasing in more than 560 thousand
clients vs. 2Q19. In turn, cable television subscribers and
broadband accesses totaled 3.5 million and 4.1 million,
respectively. It is important to remark that in all cases, and for
a second consecutive time during this year, the total number of
subscribers increased when compared to the previous quarter,
through actions such as change of products, bundling and upselling,
allowing to increase the weight of value customers and reiterating
the leadership of the Company in mobile portability, in broadband
and video platforms.
- Operating Income before Depreciation and Amortization
amounted to P$53,219 million in 9M19, 33.3% of Consolidated
Revenues. During 3Q19, the increase in real terms of Revenues and
Costs has been relatively similar, reducing the gap observed
between them during the first half of the year.
- The Company registered an Ordinary loss before income tax of
P$165 million in 9M19, improving +99.3% vs. 9M18, mainly reflecting
lower net losses from FX results measured in real terms. Meanwhile,
the Company registered a Net Loss of P$12,697 million during the
same period, essentially due to the recognition of the restatement
by inflation for the calculation of Income Tax.
- On October 18, 2019, the
Company paid US$ 300 million in cash
dividends, pursuant to the resolutions of the Ordinary
Shareholders' Meeting held on October 10,
2019. The dividends were made available through the use of
the Company's own resources as a result of its solid operative
generation, ensuring an adequate remuneration for all its funding
sources.
- Investments reached P$43,939 million in 9M19, equivalent to
27.5% of Consolidated Revenues, with the objective of optimizing
the services demanded by its customers and reaffirming the solid
competitive position in terms of network infrastructure that the
Company currently has.
- Net Financial Debt Position: P$105,427 million in 9M19,
increasing 1.0% in real terms when compared with September 2018.
*Unaudited non financial data
|
|
IAS
29
|
|
IAS
29
|
|
|
|
|
(in
million P$ adjusted by inflation, except where
noted)**
|
|
As of
September, 30
|
|
As of
September, 30
|
|
Δ
$
|
|
Δ
%
|
|
2019
|
|
2018
|
|
|
Consolidated
Revenues
|
|
159,699
|
|
177,898
|
|
(18,199)
|
|
-10.2%
|
Operating Income
before D&A
|
|
53,219
|
|
62,143
|
|
(8,924)
|
|
-14.4%
|
Operating
Income
|
|
14,399
|
|
28,336
|
|
(13,937)
|
|
-49.2%
|
Net Income
attributable to Controlling Company
|
|
(12,941)
|
|
(11,758)
|
|
(1,183)
|
|
10.1%
|
Shareholders' equity
attributable to Controlling Company
|
|
281,806
|
|
293,310
|
|
(11,504)
|
|
-3.9%
|
Net Financial
Position - (Debt) / Cash
|
|
(105,427)
|
|
(104,346)
|
|
(1,081)
|
|
1.0%
|
Investments in
PP&E, Intangible Assets & adds of rights of use
*
|
|
43,939
|
|
42,242
|
|
1,697
|
|
4.0%
|
|
|
|
|
|
|
|
|
|
Fixed lines in
service (in thousand lines) ***
|
|
3,272
|
|
3,617
|
|
(345)
|
|
-9.5%
|
Mobile customers (in
thousand)
|
|
21,282
|
|
20,851
|
|
431
|
|
2.1%
|
Personal (Argentina)
|
|
18,974
|
|
18,484
|
|
490
|
|
2.7%
|
Núcleo (Paraguay) -including Wimax customers-
|
|
2,308
|
|
2,368
|
|
(60)
|
|
-2.5%
|
Broadband accesses in
Argentina (in thousand)
|
|
4,144
|
|
4,133
|
|
11
|
|
0.3%
|
Pay TV Suscribers (in
thousand)
|
|
3,515
|
|
3,564
|
|
(49)
|
|
-1.4%
|
Argentina
|
|
3,291
|
|
3,345
|
|
(54)
|
|
-1.6%
|
Uruguay
|
|
143
|
|
143
|
|
-
|
|
-
|
Paraguay
|
|
81
|
|
76
|
|
5
|
|
6.6%
|
|
|
|
|
|
|
|
|
|
Average Billing per
user (ARBU) Fixed Telephony / voice (in P$ - Restated by
inflation)
|
|
390.1
|
|
378.5
|
|
11.6
|
|
3.1%
|
Average Revenue per
user (ARPU) Mobile Services - Personal (in P$ - Restated by
inflation)
|
|
281.1
|
|
306.5
|
|
(25.4)
|
|
-8.3%
|
Average Revenue per
user (ARPU) Broadband (in P$ - Restated by inflation)
|
|
967.2
|
|
1,089.0
|
|
(121.8)
|
|
-11.2%
|
Average Revenue per
user (ARPU) Cable TV (in P$ - Restated by inflation)
|
|
1,065.7
|
|
1,205.2
|
|
(139.5)
|
|
-11.6%
|
* (in constant
measuring unit.)
|
|
|
|
|
|
|
|
|
**(Figures may not
sum up due to rounding)
|
|
|
|
|
|
|
|
|
*** (does not
include IP telephony lines, which as of September 30, 2019 amounted
to 68 thousand)
|
|
|
|
|
|
Telecom Argentina S.A. ('Telecom Argentina') - (NYSE: TEO; BASE:
TECO2), one of Argentina's leading
telecommunications companies, announced today a Net loss before
income tax expense of $165 million
for the period ended September 30,
2019, improving +99.3% when compared with the same period of
last year. Meanwhile, the Company registered a Net Loss of P$12,697
million during the same period, essentially due to the recognition
of the restatement by inflation for the calculation of Income Tax.
Moreover, Net Loss attributable to the Controlling Company amounted
P$ 12,941 million.
It is worth mentioning that the comparative figures for the
previous reporting periods have been restated so that the resulting
comparative information is presented in terms of the current
measurement unit as of September 30,
2019.
The following table shows the evolution of the consumer price
index (National CPI) for the last three fiscal years and as of
September 30, 2018 and 2019 according
to the official statistics (INDEC), which were used to restate the
figures in constant currency:
|
As of December 31,
2016
|
As of December 31,
2017
|
As of December 31,
2018
|
As of September
30, 2018
|
As of September
30, 2019
|
Price Index
Variation
|
|
|
|
|
|
Annual
|
34.6%
|
24.7%
|
47.6%
|
40.4%
|
53.7%
|
3 year
cumulative
|
102.2%
|
96.6%
|
147.8%
|
137.4%
|
159.9%
|
3 month
cumulative
from
Jun-19
|
n/a
|
n/a
|
n/a
|
14.1%
|
12.5%
|
9 month
cumulative
|
n/a
|
n/a
|
n/a
|
32.3%
|
37.7%
|
During 9M19, Consolidated Revenues amounted to P$159,699 million
(-P$18,199 million vs. 9M18), of which Service Revenues totaled
P$149,641 million. It is worth to note that during 3Q19 all Mobile,
Internet, Cable TV and Fixed Telephony and Data Service Revenues
have increased in real terms when compared with 2Q19, considering
figures in constant currency as of September
30, 2019. Total Revenues contain approximately
P$21,821 million and P$78,404 million, for the 9M19 and 9M18,
respectively, related to the restatement in terms of the measuring
unit as of September 30, 2019.
Consolidated Operating Revenues
Mobile Services
As of September 30, 2019, mobile
clients amounted to 21.3 million. In 9M19, mobile services revenues
represented P$54,829 million (-P$7,028 million vs. 9M18). The
effect generated by the restatement in terms of the measuring unit
as of September 30, 2019, included in
mobile services revenues amounts to, approximately, P$7,436 million
and P$27,346 million, for the 9M19 and 9M18, respectively. This
effect was partially offset by the increase in the prices of mobile
plans. The commercial strategy was focused on promoting the
consumption of mobile internet services through Personal´s 4G
network, the fastest network in the country according to the
results of international benchmarks who measure the mobile network
standards.
In turn, equipment revenues amounted to P$10,058 million
(-P$3,536 million vs. 9M18). This variation was mainly due to a
decrease in the quantities sold in a general context of lower
consumption of durable goods and difficulties in the access to
consumer financing, partially offset by the increase in prices of
handset sales.
Mobile Services in Argentina
As of September 30, 2019, Personal
reached 19.0 million subscribers in Argentina, increasing in more than 560
thousand clients when comparing with the previous quarter and more
than 490 thousand clients when comparing with the same period of
past year, where postpaid clients represented 40% of the subscriber
base.
In 9M19, mobile service revenues in Argentina (excluding equipment sales) amounted
to P$47,525 million. Mobile internet revenues reached 76% of
service revenues of Personal in Argentina (vs. 59% in 9M18). The average
monthly revenue per user ('ARPU' – restated in constant currency as
of September 30, 2019) of Personal in
Argentina amounted to P$281.1
during 9M19. The effect generated by the restatement in terms of
the measuring unit as of September 30,
2019, included in the ARPU amounts to, approximately, P$39.9
and P$135.7, for the 9M19 and 9M18, respectively.
Commercial Initiatives
Through its Personal brand, the Company performed a new
demonstration of 5G technology for its clients, the first one
performed in the city of Córdoba in the shopping mall
Nuevo Centro. The
demonstration was carried out over Personal´s mobile network with
Huawei´s technology, and is a continuation of the type of
commercial initiatives which started in Buenos Aires last May.
Since August the Company made available a new eSIM service, the
new SIM generation, for all Personal´s clients with smartphones
iPhone XS, iPhone XS Max and iPhone XR, which is independent of the
client´s plan. In this sense, Personal became the first mobile
operator of the country to provide this technology. With the eSIM,
the clients that have enabled iPhones will be able to activate
their lines without the need to obtain a physical SIM.
Personal in Paraguay
('Núcleo')
As of September 30, 2019, Núcleo's
subscriber base reached more than 2.3 million clients. Prepaid and
postpaid customers represented 83% and 17%, respectively.
Núcleo generated service revenues equivalent to P$7,304 million
during 9M19 (+10.6% vs. 9M18). Internet revenues represented 50% of
9M19 service revenues (vs. 44% in 9M18).
Cable TV Services
Cable TV service revenues reached P$33,390 million in 9M19
(-P$4,893 million vs. 9M18). The effect generated by the
restatement in terms of the measuring unit as of September 30, 2019, included in Cable TV service
revenues amounts to, approximately, P$4,612 million and P$16,866
million, for the 9M19 and 9M18, respectively. Cable TV subscribers
totaled almost 3.5 million, increasing in approximately 29 thousand
subscribers when compared with the previous quarter. Moreover, the
monthly Cable TV ARPU (restated in constant currency as of
September 30, 2019) reached P$1,065.7
during 9M19. The effect generated by the restatement in terms of
the measuring unit as of September 30,
2019, included in the ARPU amounts to, approximately,
P$151.3 and P$533.8, for the 9M19 and 9M18, respectively.
Additionally, the average monthly churn during 9M19 was 1.3%.
With the aim to continue offering to its customers the best
entertainment experience, Telecom renewed Cablevisión Flow´s App.
The development of this project was entirely in-company, thanks to
a multi-disciplinary work team. The renewal of Flow App allowed to
modernize its interface, optimize the navigation, improve the
search engine and organize the selected contents for each
client.
At the end of September, it was presented the new coproduction
made by Telecom and Viacom International Studios (VIS) for
Cablevisión Flow and Telefe, "Atrapa a un ladrón". It was
premiered on October 2, on Telefe,
and after the premiere all the chapters became available to watch
on demand in Cablevisión Flow through any device.
Likewise, Telecom and the Videogames Professional League (group
MEDIAPRO) launched the closing tournament of the Flow Master League
of League of Legends. The tournament´s encounters were broadcasted
live on channel 601 of Cablevisión Flow. The final of Flow Master
League of League of Legends summoned more than 1,200 fans who
enjoyed the live show, and more than 21 thousand people watched it
via streaming through the official channels of the Professional
Videogames League (LVP for its Spanish acronym) from Twitch
and YouTube, and more than 4,500 users followed it live on channel
601 of Cablevisión Flow.
Fixed Telephony and Data Services
During 9M19, revenues generated by fixed telephony and data
reached P$25,021 million in 9M19, +7.4% vs. 9M18. The increase in
fixed telephony services was mainly explained by higher revenues
from data services in a context that evidences the growing position
of the Company as an integrated ICT provider (Datacenter, VPN,
among other services) in the segment of Corporate and Government
customers. Regarding the increase in fixed telephony service
revenues, monthly fee price increases came into effect for both
corporate and residential fixed line customers, and in the bundled
offer of packs that include voice and internet services, that
aim to achieve higher levels of customer loyalty. The effect
generated by the restatement in terms of the measuring unit as of
September 30, 2019, included in Fixed
telephony and data service revenues amounts to, approximately,
P$3,381 million and P$10,211 million, for the 9M19 and 9M18,
respectively.
As a result, the average monthly revenue billed per user ('ARBU'
- restated in constant currency as of September 30, 2019) of fixed telephony increased
3.1% in 9M19 compared with 9M18, reaching P$390.1.
Meanwhile, Data revenues increase (services mainly offered to
Corporate customers, SMEs, Government and to other operators) was
mainly driven by FX rate variations that affected those contracts
that were adjusted by the $/US$ exchange rate.
Fibercorp-Telecom became the new technological partner of the
Cámara de la Industria Argentina del Software (CESSI). In
this sense, the Company through its brand name will partner with
CESSI as a sponsor in all its events and will offer its set of
Connectivity, Communication, IoT, Cloud, Video & Media,
Datacenter and Security solutions to more than 800 SMEs which are
members of the chamber. This new alliance follows the Company's
strategical approach that seeks to create an offer for the
different industries with technological solutions specifically
intended to boost each one of them, whether they are shops,
manufacturing, transportation, computer or independent
professionals.
Moreover, FiberCorp-Telecom presented "Tecno Friendly", an
advertising campaign that aims to strengthen its positioning as the
ideal technological partner to boost your business, through the
best technological solutions, customized based on the specific
activities and needs of every one of them. The campaign was
especially directed to the SME segment, highlighting the
flexibility and the soundness of FiberCorp-Telecom to help the
companies in their digital transformation.
Internet Services
Internet services revenues totaled P$35,859 million during 9M19,
-P$4,144 million vs. 9M18. The effect generated by the restatement
in terms of the measuring unit as of September 30, 2019, included in Internet services
revenues amounts to, approximately, P$4,918 million and P$17,555
million, for the 9M19 and 9M18, respectively. As of September 30, 2019, total broadband accesses
increased to more than 4.1 million (+0.3% vs. 9M18). Additionally,
broadband ARPU (restated in constant currency as of September 30, 2019) amounted to P$967.2 per month
in 9M19. The effect generated by the restatement in terms of the
measuring unit as of September 30,
2019, included in the ARPU amounts to, approximately,
P$137.3 and P$482.3, for the 9M19 and 9M18, respectively. Moreover,
the average monthly churn rate for the period was 1.5%. On
the other hand, clients with service of 20Mb or higher
currently represent 58% of the total customer base as of 9M19,
increasing from the participation registered in 9M19 (34%).
Consolidated Operating Costs
Consolidated Operating Costs (including D&A and impairment
of PP&E, intangible assets and rights of use) totaled P$145,300
million in 9M19, a decrease of P$4,262 million, or 2.8% vs. 9M18.
These lower operating costs vs. 9M18 are mainly associated with a
reduction in operating costs excluding D&A and impairment of
PP&E, intangible assets and rights of use, which decreased
8.0%, mainly due to lower cost of taxes and fees with the
regulatory authority, commissions and advertising, cost of handsets
sold, interconnection and transmission costs, programming costs and
labor costs, partially offset by higher depreciation, amortization
and impairment of PP&E, intangibles and rights-of-use. On the
other hand, it is worth to highlight that during the 3Q19 the
evolution of revenues and costs in real terms was almost even,
while during the first half of the year a bigger gap between them
was observed due to different temporal dynamics of price and cost
adjustments.
The cost breakdown is as follows:
- Employee benefit expenses and severance payments totaled
P$30,408 million (-2.2% vs. 9M18). The decrease was mainly due to a
decrease in recurring labor costs (which includes the effect of
increases in salaries to unionized and non‐unionized employees
together with the associated social security contributions) which
was partially offset by non-recurring labor costs. Total employees
totaled 24,266 in 9M19. The effect generated by the restatement in
terms of the measuring unit as of September
30, 2019, included in labor costs and severance payments
amounts to, approximately, P$4,178 million and P$13,680 million,
for the 9M19 and 9M18, respectively.
- Interconnection and transmission costs (including TLRD,
Roaming, international settlement charges and lease of circuits)
totaled P$5,102 million, down by 10.5% vs. 9M18, decreasing mainly
due to operative efficiencies (synergies) as of September 30, 2019, compared with the same period
last year, partially offset by higher traffic and the FX increase
related with services fixed in US$. The effect generated by the
restatement in terms of the measuring unit as of September 30, 2019, included in interconnection
and transmission costs amounts to, approximately, P$698 million and
P$2,498 million, for the 9M19 and 9M18, respectively.
- Fees for services, maintenance, materials and supplies
amounted to P$17,223 million (-0.1% vs. 9M18). This decrease in
costs is mainly due to synergies achieved in different processes as
result of the merger between Telecom y Cablevision in January 2018, which were partially offset by
higher professional fees generated by greater level of activity
driven mainly by new Company projects, services linked to
operational management in general, and also by higher technical
maintenance costs and higher hardware and software maintenance
costs due to price increases and Peso/US$ exchange fluctuations.
The effect generated by the restatement in terms of the measuring
unit as of September 30, 2019,
included in fees for services, maintenance, materials and supplies
amounts to, approximately, P$2,610 million and P$7,830 million, for
the 9M19 and 9M18, respectively.
- Taxes and fees with regulatory authorities reached P$12,509
million (-12.6% vs. 9M18). This decrease corresponds mainly to
lower sales in 9M19 vs 9M18, partially offset by impact of the
application of resolution ENACOM 840/18 that introduced changes in
the determination of the radioelectric spectrum fee. The effect
generated by the restatement in terms of the measuring unit as of
September 30, 2019, included in taxes
and fees with regulatory authorities amounts to, approximately,
P$1,722 million and P$6,310 million, for the 9M19 and 9M18,
respectively.
- Commissions and advertising (Commissions paid to agents,
collection fees and other commissions) totaled P$9,538 million
(-15.7% vs. 9M18). This decline is due to lower charges for agent
commissions as a consequence of the sales channel reorganization
and due to a slightly decrease in advertising related to the
synergies achieved after the merger that allowed to reduce cost
even with greater presence in the various media, partially offset
by higher collection fees. The effect generated by the restatement
in terms of the measuring unit as of September 30, 2019, included in commissions and
advertising amounts to, approximately, P$1,287 million and P$4,979
million, for the 9M19 and 9M18, respectively.
- Cost of handsets sold amounted to P$7,495 million
(-26.2% vs. 9M18). Of this amount, the majority corresponds to cost
of handsets in Argentina, which
decreased compared with 9M18, mainly due to lower quantities sold
which were down approximately by 31%, mainly affected by the
decrease in consumption of durable goods registered at an
aggregated level in the economy. These lower quantities sold were
partially offset by an increase in purchase price of the handsets
compared with 9M18. Moreover, it's worth to remark that results of
handset sales have a positive margin contribution. The effect
generated by the restatement in terms of the measuring unit as of
September 30, 2019, included in cost
of handsets sold amounts to, approximately, P$1,724 million and
P$4,792 million, for the 9M19 and 9M18, respectively.
- Programming and content costs totaled P$12,043 million (-5.6%
vs. 9M18). This decrease is explained mainly by operative
efficiencies obtained in 9M19 vs. 9M18, which were partially offset
by price increases in almost all broadcasting signals, including
football signals corresponding to the broadcast of live matches of
the first division of the Argentine Soccer Association. The effect
generated by the restatement in terms of the measuring unit as of
September 30, 2019, included in
programming and content costs amounts to, approximately, P$1,672
million and P$5,616 million, for the 9M19 and 9M18,
respectively
- Depreciation, amortization and impairment of PP&E,
intangible assets and rights-of-use amounted P$38,820 million
(+14.8% vs. 9M18). The increase was due to the impact of the
amortization the incorporations after September 30, 2018, as a consequence of the Capex
Plan that the Company is developing and the effect of the
application since January 1, 2019, of
IFRS 16 being the charge P$2,114 million, partially offset by
assets that have stopped amortizing in 2019. The effect generated
by the restatement in terms of the measuring unit as of
September 30, 2019, included in
depreciation, amortization and impairment of PP&E, intangible
assets and right-of-use amounts to, approximately, P$18,705 million
and P$18,555 million, for the 9M19 and 9M18, respectively.
- Other Costs totaled P$12,162 million (-7.5% vs. 9M18), of
which bad debt expenses reached P$4,348 million (+22.4% vs. 9M18),
increasing mainly due to the higher delinquency levels in
comparison with those registered in of 2018. Despite the fact that
the bad debt ratio reaches 2.7% as of 9M19, the same ratio in 3Q19
reduced to 2.0%, signaling an improvement in the trend of bad debt
due to diverse actions taken, such as new implementations in the
delinquency management for the fixed and mobile business,
re-categorization of credit profiles, new internal scoring schemes
and blocking of those handsets that were financed and whose debt
was past due. Bad debt expenses increase was more than offset by
the decrease in other operating costs (which includes charges for
trials and other contingencies, energy and other public services,
insurances, rents, internet capacity, among others), which totaled
P$7,814 million (-18.6% vs. 9M18), decreasing because of the lower
operative leasing operations due to the application of IFRS 16. The
effect generated by restatement in terms of the measuring unit as
of September 30, 2019, included in
other costs amounts to, approximately, P$1,692 million and P$5,752
million, for the 9M19 and 9M18, respectively.
Finally, as can be highlighted from the favorable evolution of
costs in real terms, it is noticeable that most of the components
evolved positively despite a challenging economic context,
indicating in most of the cases improvements or synergies.
Net Financial Results
The Net Financial Results (including Financial Expenses on Debt
and Other Financial Results, net) showed a loss of P$14,360 million
in 9M19, compared with a loss of P$51,520 million in 9M18. This
variation was mostly due to negative FX results (including results
of NDF) measured in real terms in 9M19 for P$8,808 million (due to
a depreciation of the Argentine peso against the US dollar of 53%
vs. an inflation of 38% during the same period), while negative FX
results measured in real terms were registered in 9M18 for P$56,650
million (due to a depreciation of the Argentine peso against the US
dollar of 121% vs. an inflation of 32% during the same period).
These results were partially offset by a lower RECPAM (inflation
adjustment gain/loss), which totaled P$4,763 million (down P$3,612
million compared with 9M18); and also, by higher net interest
losses which totaled P$5,261 million (a decrease of P$3,077 million
vs 9M18).
Consolidated Net Financial Debt
As of September 30, 2019, net
financial debt position (cash, cash equivalents plus financial
investments and financial NDF minus loans) totaled P$105,427
million, increasing P$1,081 million or 1.0% when compared to the
consolidated net financial debt position as of September 30, 2018, which totaled P$104,346
million (restated in terms of the measuring unit as of September 30, 2019).
Investments in PP&E, intangible assets and adds of rights of
use
During 9M19, the Company invested P$43,939 million, increasing
approximately 4.0% as of 9M18. The investments were focused on
projects that maximize the network capacity and on the development
of products and services that contribute to address the customer's
needs that today demand for connectivity and data availability.
Moreover, transmision and transport networks has been extended to
unify the differents access technologies, reconverting the copper
fixed networks into fiber or coaxial-fiber hybrid networks,
in order to face the the increaseing services demand from mobile
and fixed clients. Likewise, significant investments have
been made in the charging, billing and relationship systems with
customers. The Company aims to improve the capacity and coverage of
its networks, which is key factor for the transformation towards
convergent services with international quality standards, but also
to leverage the content business, with Flow as an integral content
platform and entertainment center, whose competitive advantages and
differential features place it above other platforms. In relative
terms, investments reached 27.5% of consolidated revenues in 9M19
(vs. 23.7% in 9M18).
Moreover, within the framework of the network deployment and
expansion strategy that the Company is currently carrying out,
Telecom announced that it will invest in the San Miguel
municipality in order to expand Personal´s 4G network. The
investment plan foresees the deployment and modernization of mobile
sites in order to respond to the intensive demand for data
connections and therefore to renew the client's navigation
experience. The announcement materialized through an agreement
signed between Carlos Moltini, CEO
of Telecom, and the Mayor of the San Miguel municipality, Jaime
Méndez.
Relevant Matters
Tender offer for Class "A" Notes due 2021
On July 10, 2019, Telecom
Argentina S.A. announced the commencement of a tender offer for its
outstanding Class "A" Notes due 2021 (the "Class A Notes") for a
Tender Cap of up to US$200 million,
which was increased to up to US$250
million on July 12, 2019.
In this regard, on August 12, 2019
the Company announced that the total outstanding principal
repurchased within the terms of this offer was US$ 34.1 million.
Acquisition of shares of Tuves Paraguay S.A.
On September 4, 2019 Telecom
Argentina informed that, having obtained the prior authorization of
the Comisión Nacional de Telecomunicaciones de Paraguay ("CONATEL"), was effective in the
same date the acquisition by its paraguayan controlled company
Núcleo S.A. ("Núcleo") of 211,848 series B shares representing 30%
of the capital stock and the votes of the company incorporated in
the Republic of Paraguay Tuves Paraguay S.A. ("Tuves
Paraguay").
The purchase to the selling party - the Chilean company
Tu Ves S.A. - of the total of
211,848 series B shares of Tuves Paraguay was made effective for
the amount of US Dollars One Million
(US$ 1,000,000).
On the other hand, the shareholders of Núcleo, Telecom Argentina
and the paraguayan company ABC Telecomunicaciones S.A., acquired
from Núcleo 2 series B shares and 1 series B shares of Tuves
Paraguay, respectively, representative as a whole of 0,00042% of
the capital stock and votes of Tuves Paraguay, for a proportional
price per share to that paid for the 30% participation by Núcleo to
the chilean company Tu Ves S.A.,
that is, US$ 4.72 per share.
After these acquisitions, Tuves Paraguay has the following
shareholder structure: Núcleo 99.99958% (706,157 shares); Telecom
Argentina 0.00028% (2 shares); and ABC Telecomunicaciones S.A.
0.00014% (1 share).
Corporate reorganization between Telecom Argentina S.A., CV
Berazategui S.A., Última Milla S.A. and the Split Away Assets of
PEM S.A.U.
On September 10, 2019 Telecom
Argentina informed that its Board of Directors, on a meeting held
on the same date, resolved to approve the Corporate Reorganization
trough which Telecom Argentina as absorbing and surviving company
will merge its controlled companies CV Berazategui S.A., Última
Milla S.A. and the Split Away Assets from its controlled company
PEM S.A.U. (the "Corporate Reorganization"), in accordance with the
Preliminary Merger Agreement subscribed in compliance with sections
82 and subsequent of the General Corporate Law N° 19.550,
sections 174 and subsequent of General Resolution 7/15 of the
Inspección General de Justicia, and sections 77 and subsequent of
the Income Tax Law.
The Date of the Corporate Reorganization was October 1st, 2019. The aforementioned Corporate
Reorganization was approved by the General Extraordinary and
Special Class "A" and Class "D" Shareholders' Meetings held on
October 24, 2019.
Other Relevant Matters
Distribution of cash dividends
On October 10, 2019 Telecom
Argentina informed that the General Ordinary Shareholders' Meeting
held on the same day (the "Shareholders' Meeting"), has resolved to
distribute US$300,000,000 as cash
dividends, in freely available US Dollars. For this purpose, the
Shareholders' Meeting resolved to fully withdraw the "Voluntary
Reserve for Future Cash Dividends", which in constant currency as
of August 31, 2019 amounted to
P$15,431,534,497.59, and partially withdraw the "Voluntary Reserve
to maintain the Company's level of investments in capital assets
and the current level of solvency" in an amount equal to
P$1,955,715,502.41 (both withdrawn amounts totaling
P$17,387,250,000) so that, in accordance with the Reference
Exchange Rate of the Central Bank of the Argentine Republic (BCRA)
- Com. "A" 3500 of October 9 of the
current year (published on the official website of said bank
www.bcra.gov.ar) ($57.9575), the
aforementioned amounts are equivalent to the amount of US$300,000,000.
According to the resolutions of the Shareholders' Meeting, the
dividends were made available to the shareholders on October 18, 2019. The amount distributed was
equivalent to US$0.139295942 and
P$8.073244551 per outstanding share of P$1 nominal value, which
represented 807.3244551% of the outstanding capital stock.
Appointment of CEO with effect as from January 1, 2020 and call to General Ordinary
Shareholders' Meeting on November 25,
2019
Taking into account the proposal with a favorable recommendation
made by the Executive Committee of the Company, the Board of
Directors decided on October 24, 2019
to appoint Mr. Roberto Daniel Nóbile as CEO of Telecom Argentina,
with effect as from January 1,
2020.
Additionally, in the same date the Board of Directors resolved
to accept the resignations submitted by the Director Ignacio José
María Sáenz Valiente and the Alternate Director Nicolás
Sergio Novoa and to summon Telecom
Argentina's shareholders to a General Ordinary Shareholders'
Meeting (the "Shareholders' Meeting") to be held on November 25, 2019, in order to consider the
appointment of a Director and an Alternate Director to serve from
January 1, 2020 and until the end of
the fiscal year 2020 and consider the performance of the resigning
Director and Alternate Director up to the date of this
Shareholders´ Meeting.
Moreover, on October 29, 2019 the
Company informed that it had received notice from the controlling
shareholder Cablevisión Holding S.A. that it was its intention to
propose the appointment, in such Shareholders' Meeting, of Mr.
Carlos Alberto Moltini as Director
and Mr. Ignacio José María Sáenz Valiente as Alternate Director, to
serve from January 1, 2020 and until
the end of fiscal year 2020.
Telecom Argentina is the parent
company of a leading telecommunications group in Argentina, where it offers, either itself or
through its controlled subsidiaries local and long distance
fixed-line telephony, cellular, data transmission, and pay TV and
Internet services, among other services. Additionally, Telecom
Argentina offers cellular services in Paraguay and pay TV services in Uruguay. The Company commenced operations on
November 8, 1990, upon the Argentine
government's transfer of the telecommunications system in the
northern region of Argentina.
As of September 30, 2019, Telecom
Argentina has 2,157,472,731 shares issued and 2,153,688,011 shares
outstanding.
For more information, please contact Investor Relations:
Solange Barthe
Dennin
(5411) 4968
3752
|
Luis F. Rial
Ubago
(5411) 4968
3718
|
Nahuel
Monsalvo
(5411) 4698
4448
|
|
Voice Mail: (5411) 4968 3628
Fax: (5411) 4968 3616
E-mail: relinver@teco.com.ar
For information about Telecom Argentina's services, visit:
www.telecom.com.ar
www.personal.com.ar
www.personal.com.py
www.cablevisionfibertel.com.ar
Disclaimer
This document may contain statements that could constitute
forward-looking statements, including, but not limited to (i) the
Company's expectations for its future performance, revenues,
income, earnings per share, capital expenditures, dividends,
liquidity and capital structure; (ii) the synergies expected from
the merger between the Company and Cablevisión S.A. (or the
Merger); (iii) the implementation of the Company's business
strategy; (iv) the changing dynamics and growth in the
telecommunications and cable markets in Argentina, Paraguay and Uruguay; (v) the Company's outlook for new and
enhanced technologies; (vi) the effects of operating in a
competitive environment; (vii) the industry conditions; (viii) the
outcome of certain legal proceedings; and (ix) regulatory and legal
developments. Forward-looking statements may be identified by words
such as "anticipate," "believe," "estimate," "expect," "intend,"
"plan," "project," "will," "may" and "should" or other similar
expressions. Forward-looking statements reflect the current views
of the management of the Company with respect to future events.
They are not guarantees of future performance and involve certain
risks and uncertainties that are difficult to predict. In addition,
certain forward-looking statements are based upon assumptions as to
future events that may not prove to be accurate. Many factors could
cause actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements that may be expressed or implied by such
forward-looking statements. These factors include, among others:
(i) the Company's ability to successfully implement our business
strategy and to achieve synergies resulting from the Merger; (ii)
the Company's ability to introduce new products and services that
enable business growth; (iii) uncertainties relating to political
and economic conditions in Argentina, Paraguay and Uruguay; (iv) inflation, the devaluation of
the peso, the Guaraní and the Uruguayan peso and exchange rate
risks in Argentina, Paraguay and Uruguay; (v) restrictions on the ability to
exchange Argentine or Uruguayan pesos or Paraguayan guaraníes into
foreign currencies and transfer funds abroad; (vi) the manner in
which the Argentine government regulates Law No. 27,078, the
Argentina Digital Law or, as amended by Decree No. 267/15; (vii)
the creditworthiness of our actual or potential customers; (viii)
the nationalization, expropriation and/or increased government
intervention in companies; (ix) technological changes; (x) the
impact of legal or regulatory matters, changes in the
interpretation of current or future regulations or reform and
changes in the legal or regulatory environment in which the Company
operates; (xi) the effects of increased competition; (xii) reliance
on content produced by third parties; (xiii) increasing cost of the
Company's supplies; (xiv) inability to finance on reasonable terms
capital expenditures required to remain competitive; (xv)
fluctuations, whether seasonal or in response to adverse
macro-economic developments, in the demand for advertising; and
(xvi) the Company's ability to compete and develop our business in
the future. Many of these factors are macroeconomic and regulatory
in nature and therefore beyond the control of the Company's
management. Should one or more of these risks or uncertainties
materialize, or underlying assumptions prove incorrect, actual
results may vary materially from those described herein as
anticipated, believed, estimated, expected, intended, planned or
projected. The Company does not intend and does not assume any
obligation to update the forward-looking statements contained in
this document. These forward-looking statements are based upon a
number of assumptions and other important factors that could cause
our actual results, performance or achievements to differ
materially from our future results, performance or achievements
expressed or implied by such forward-looking statements. Readers
are encouraged to consult the Company's Annual Report on Form 20-F
and the periodic filings made on Form 6-K, which are periodically
filed with or furnished to the United States Securities and
Exchange Commission, as well as the presentations periodically
filed before the Argentine Securities and Exchange Commission
(Comisión Nacional de Valores) and the Buenos Aires Stock
Exchange (Bolsas y Mercados Argentinos), for further
information concerning risks and uncertainties faced by the
Company.
Contacts:
Solange Barthe Dennin
(54 11) 4968-3752
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SOURCE Telecom Argentina S.A.