Amé rica Mó vil's Net Profit Falls as Mexico Weighs on Earnings
July 28 2016 - 9:20PM
Dow Jones News
MEXICO CITY—Mexican telecommunications company Amé rica Mó vil
SAB said Thursday that its net profit fell 45% in the second
quarter as operating gains declined, especially in Mexico, and
financial costs rose from a year before.
The company controlled by billionaire Carlos Slim reported net
profit of 7.7 billion Mexican pesos ($407.6 million), compared with
14 billion pesos in the second quarter of 2015.
Revenue in the April-June period was up 6.1% from the second
quarter of 2015 at 233.4 billion pesos, while operating cash flow
measured by earnings before interest, taxes, depreciation and
amortization, or Ebitda, fell 11% to 61 billion pesos.
"Substantially all our operations maintained their growth trends
in local currency terms," Amé rica Mó vil said. "In Mexico,
however, we saw a step down in revenues brought about mostly by
more aggressive commercial plans in the prepaid segment as a
greater part of our subscribers moved towards unlimited call
plans."
Amé rica Mó vil lost one million wireless subscribers in the
quarter, mostly in Brazil, and ended June with 282.9 million,
including 73.1 million in Mexico and 64.3 million in Brazil.
Disconnections of prepaid subscribers were partly offset by gains
in postpaid clients.
Subscriptions to fixed-line services including phone, broadband
internet and television rose by 334,000 to 81.7 million.
In Mexico, where wireless unit Telcel competes with AT&T
Inc. and Spain's Telefó nica SA, Amé rica Mó vil reported a 17%
drop in mobile service revenue, partly offset by higher equipment
revenue. Ebitda in Mexico fell 24%.
AT&T, which entered the Mexican wireless market last year
with a $4.4 billion acquisition of two smaller operators, said last
week it had close to 10 million mobile subscribers in Mexico at the
end of June after adding 779,000 in the second quarter. The U.S.
giant reported wireless revenue in Mexico of $606 million in the
quarter, but an operating loss of $225 million as it invests to
expand its high-speed mobile network to reach 100 million people by
2018.
Telefó nica reported 25.9 million wireless subscribers in Mexico
at the end of June, 12% more than a year earlier, and revenues of
$374 million in the quarter.
In Brazil, Amé rica Mó vil's second-quarter revenue was stable
against the year-earlier period as gains in fixed-line revenue
compensated for lower mobile service revenue. Ebitda in Brazil fell
4.5%.
Profits fell short of the median estimates of six analysts
polled by The Wall Street Journal, who expected net profit of 10.4
billion pesos and Ebitda of 64.9 billion pesos. Revenue was above
the estimate of 229.9 billion pesos.
Amé rica Mó vil's shares fell 2.7% Thursday on the Mexican stock
exchange ahead of the report, and are down 24% in the past
year.
Write to Anthony Harrup at anthony.harrup@wsj.com
(END) Dow Jones Newswires
July 28, 2016 21:05 ET (01:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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