--Revenue in line with expectations at MXN191.7 billion
--Net profit sinks on heavy forex losses from weaker Latin
American currencies
--Company added 5.9 million wireless subscribers, ending quarter
with 251.8 million
By Anthony Harrup
MEXICO CITY--Mexican telecommunications company America Movil
SAB (AMX, AMX.MX, AMOV) said sales and operating cash flow rose in
the second quarter as it continued to add wireless and fixed-line
customers at a steady pace, while a weaker Mexican peso and other
Latin American currencies ate into the bottom line, bringing about
a sharp drop in net profit.
America Movil, controlled by billionaire Carlos Slim, said
revenue rose 9.7% to 191.7 billion pesos ($14.2 billion), boosted
by the addition of 5.9 million wireless subscribers and 1.7 million
subscriptions to fixed-line services including pay television and
broadband Internet. Wireless revenue outpaced fixed-line revenue,
rising 14% on the year compared with a 1.7% increase in revenue for
fixed line.
Currency volatility continued to wreak havoc on the company's
bottom line, as hefty exchange losses of MXN16.1 billion in the
quarter led to a 45% decline in net profit to MXN13.3 billion,
equivalent to MXN0.17 per local share, or 26 U.S. cents per
American depositary receipt. A strong Mexican peso had boosted net
profit by 38% in the first quarter.
The company added 1.4 million subscribers each in Mexico and
Brazil, and 1.2 million in the U.S., which included 1.1 million
from the acquisition of Simple Mobile. America Movil, Latin
America's largest wireless-service provider, ended the quarter with
251.8 million wireless subscribers and 61.2 million fixed-line
accesses.
Cash flow measured by earnings before interest, taxes,
depreciation and amortization, or Ebitda, rose 3.1% from a year
earlier to MXN65.5 billion.
"Equipment costs increased more than twice as fast as revenues
reflecting in part the currency depreciations vs. the U.S. dollar
and the increase in postpaid subsidies associated to the sale of
smartphones," America Movil said.
Revenue was in line with expectations, while Ebitda and net
profit came in below consensus. The median estimate of seven
equities analysts polled by Dow Jones had called for revenue of
MXN191.7 billion, Ebitda of MXN66.45 billion, and a net profit of
MXN19.48 billion.
America Movil's net debt stood at MXN361 billion at the end of
June, up MXN29.7 billion from the end of 2011 as the company
increased its stake in Dutch phone company Royal KPN NV (KKPNY,
KPN.AE) to 27.7% and bought 6.7% of Telekom Austria AG (TKA.VI,
TKAGY) with plans to raise the stake to around 23%.
The minority stakes in the European companies are part of plans
by Mr. Slim to test the waters in Europe after America Movil has
exhausted possibilities for mergers and acquisitions in Latin
America. Company officials have said Latin America will continue to
be America Movil's main priority.
America Movil L shares traded on the Mexican stock exchange
closed up 2.1% Thursday at MXN18.03 ahead of the report.
Write to Anthony Harrup at anthony.harrup@dowjones.com
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