UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of May 2024
Commission File Number: 001-13464
Telecom Argentina S.A.
(Translation of registrant’s name into English)
General Hornos, No. 690, 1272
Buenos Aires, Argentina
(Address of principal executive offices)
Indicate by check mark whether the registrant files
or will file annual reports under cover of Form 20-F or Form 40-F:
Telecom
Argentina S.A.
Unaudited Condensed Consolidated Financial Statements
as of March 31, 2024
General Hornos 690
(C1272ACK) Autonomous city of Buenos Aires
Republic of Argentina
TELECOM
ARGENTINA S.A.
UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF
MARCH 31, 2024 AND 2023
INDEX
TELECOM
ARGENTINA S.A.
Glossary
of terms
| The
following explanations are not technical definitions, but to assist the general reader to understand certain terms as used in these
unaudited condensed consolidated financial statements. |
| ADS:
Telecom Argentina’s American Depositary Share, listed on the New York Stock Exchange, each representing five Class B
Shares. |
| ADR:
American Depositary Receipt. |
| BYMA
(Bolsas y Mercados Argentinos): Buenos Aires Stock Exchange. |
| CAPEX:
Capital expenditures. |
| CNV
(Comisión Nacional de Valores): The Argentine National Securities Commission. |
| Company/Telecom
Argentina: Telecom Argentina S.A. |
| CPCECABA
(Consejo Profesional de Ciencias Económicas de la Ciudad Autónoma de Buenos Aires): The Professional Council of
Economic Sciences of the City of Buenos Aires. |
| CVH:
Cablevisión Holding S.A., controlling company of Telecom Argentina since January 1, 2018. |
| DFI:
Derivate Financial Instrument. |
| DNU
(Decreto de Necesidad y Urgencia): Decree of Urgency issued by the Argentine Government. |
| FACPCE
(Federación Argentina de Consejos Profesionales en Ciencias Económicas): Argentine Federation of Professional Councils
of Economic Sciences. |
| Fintech:
Fintech Telecom LLC, a Telecom Argentina shareholder. |
| fintech:
Financial technology services are activities that involve the use of innovation and technological developments for the design,
offer and provision of financial products and services. |
| Fixed
Assets: Includes PP&E, Intangible assets, Goodwill and Rights of use assets. |
| IAS:
International Accounting Standards. |
| IASB:
International Accounting Standards Board. |
| ICT
Services (Information and Communication Technology services): Services to transport and distribute signals or data, such
as voice, text, video and images, provided or requested by third-party users, through telecommunications networks. |
| IFRS
Accounting Standards: International Financial Reporting Standards, as issued by the IASB. |
| INDEC
(Instituto Nacional de estadísticas y censos): The National Institute of statistics and cense. |
| La
Capital Cable/Ver TV/TSMA: Names corresponding to limited companies La Capital Cable S.A., Ver T.V. S.A. and Teledifusora San
Miguel Arcángel S.A., respectively, companies that are directly or indirectly associates according to the definition of the
General Corporations Law. |
| LAD
(Ley Argentina Digital): Argentine Digital Law No. 27,078. |
| LGS
(Ley de General de Sociedades): Argentine Corporations Law No. 19,550 as amended. Since the enforcement of the new Civil
and Commercial Code its name was changed to “General Corporations Law”. |
| Micro
Sistemas/Pem/Cable Imagen/AVC Continente Audiovisual/Inter Radios/Personal Smarthome/NYS2/NYSSA: Names corresponding to limited
companies or limited responsibility companies that are directly or indirectly controlled according to the definition of the General
Corporations Law, or were controlled by the Company, directly or indirectly: Micro Sistemas S.A.U., Pem S.A.U., Cable Imagen S.R.L.,
AVC Continente Audiovisual S.A., Inter Radios S.A.U., Personal Smarthome S.A., NYS2 S.A.U., Negocios y Servicios S.A.U. |
| NYSE:
New York Stock Exchange. |
| OPH:
Name corresponding to company Open Pass Holding LLC that is a joint venture of Telecom Argentina. |
| PEN
(Poder Ejecutivo Nacional): The executive branch of the Argentine government. |
| PP&E:
Properties, plant and equipment. |
| RECPAM
(Resultado por exposición a los cambios en el poder adquisitivo de la moneda): Inflation Adjustment Gain (Loss). |
| RT:
Technical resolutions issued by the FACPCE. |
TELECOM
ARGENTINA S.A.
| RT
26: Technical resolution No, 26 issued by the FACPCE, amended by RT29 and RT43. |
| Telecom:
Telecom Argentina and its consolidated subsidiaries. |
| Telecom
USA/ Núcleo/ Personal Envíos/ Tuves Paraguay/ Televisión Dirigida/ Adesol/ Opalker/Ubiquo/ Micro Fintech Holding:
Names corresponding to foreign companies Telecom Argentina USA Inc., Núcleo S.A.E., Personal Envíos S.A., Tuves
Paraguay S.A., Televisión Dirigida S.A., Adesol S.A., Opalker S.A., Ubiquo Chile Spa and Micro Fintech Holding LLC, respectively,
companies that are directly or indirectly controlled according to the definition of the General Corporations Law. |
| USA:
United States of America |
| UVA
(Unidad de Valor Adquistivo): Purchasing Value Unit, an index developed and published by the Banco Central de la República
Argentina. |
| VLG:
VLG S.A.U. (formerly VLG Argentina LLC), a company that was merged and absorbed by CVH. |
TELECOM
ARGENTINA S.A.
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
(In millions
of Argentine pesos in current currency - Note 1.d)
| |
|
March 31, |
December 31, |
| ASSETS |
Note |
2024 |
2023 |
| Current Assets |
|
|
|
| Cash
and cash equivalents |
2 |
150,604 |
242,252 |
| Investments |
2 |
315,094 |
187,964 |
| Trade
receivables |
3 |
208,647 |
201,457 |
| Other
receivables |
4 |
51,774 |
51,611 |
| Inventories |
5 |
44,208 |
47,805 |
| Total
current assets |
|
770,327 |
731,089 |
| Non-Current
Assets |
|
|
|
| Trade
receivables |
3 |
355 |
382 |
| Other
receivables |
4 |
21,351 |
29,763 |
| Deferred
income tax assets |
13 |
16,282 |
20,947 |
| Investments |
2 |
32,937 |
36,097 |
| Goodwill |
6 |
2,337,135 |
2,340,988 |
| PP&E |
7 |
3,283,930 |
3,444,604 |
| Intangible
assets |
8 |
1,355,603 |
1,374,340 |
| Right
of use assets |
9 |
325,633 |
327,036 |
| Total
non-current assets |
|
7,373,226 |
7,574,157 |
| TOTAL
ASSETS |
|
8,143,553 |
8,305,246 |
| LIABILITIES |
|
|
|
| Current
Liabilities |
|
|
|
| Trade
payables |
10 |
415,440 |
541,069 |
| Borrowings |
11 |
854,148 |
854,356 |
| Salaries
and social security payables |
12 |
127,776 |
138,188 |
| Income
tax payables |
13 |
2,929 |
2,368 |
| Other
taxes payables |
14 |
61,300 |
59,357 |
| Leases
liabilities |
15 |
40,178 |
43,570 |
| Other
liabilities |
16 |
26,736 |
31,022 |
| Provisions |
17 |
5,228 |
8,097 |
| Total
current liabilities |
|
1,533,735 |
1,678,027 |
| Non-Current
Liabilities |
|
|
|
| Trade
payables |
10 |
11,192 |
1,386 |
| Borrowings |
11 |
1,591,888 |
2,372,263 |
| Salaries
and social security payables |
12 |
5,836 |
5,654 |
| Deferred
income tax liabilities |
13 |
906,453 |
699,192 |
| Other
taxes payables |
14 |
7 |
17 |
| Leases
liabilities |
15 |
73,351 |
90,835 |
| Other
liabilities |
16 |
10,213 |
13,710 |
| Provisions |
17 |
35,022 |
39,599 |
| Total
non-current liabilities |
|
2,633,962 |
3,222,656 |
| TOTAL
LIABILITIES |
|
4,167,697 |
4,900,683 |
| EQUITY
|
|
|
|
| Equity
attributable to Controlling Company |
|
3,885,937 |
3,286,979 |
| Equity
attributable to non-controlling interest |
|
89,919 |
117,584 |
| TOTAL
EQUITY(See Consolidated Statements of Changes in Equity) |
|
3,975,856 |
3,404,563 |
| TOTAL
LIABILITIES AND EQUITY |
|
8,143,553 |
8,305,246 |
The accompanying
notes are an integral part of these unaudited condensed consolidated financial statements.
TELECOM
ARGENTINA S.A.
CONSOLIDATED
INCOME STATEMENTS
(In millions
of Argentine pesos in current currency, except per share data in Argentine pesos in current currency - Note 1.d)
| |
|
Three-month period
ended March 31, |
| |
Note |
2024 |
2023
|
| Revenues |
21 |
683,916 |
833,213 |
| Employee
benefit expenses and severance payments |
22 |
(157,824) |
(200,408) |
| Interconnection
and transmission costs |
|
(25,088) |
(24,855) |
| Fees
for services, maintenance, materials and supplies |
22 |
(100,037) |
(97,685) |
| Taxes
and fees with the Regulatory Authority |
22 |
(52,700) |
(64,161) |
| Commissions
and advertising |
|
(35,507) |
(48,550) |
| Cost
of equipment and handsets |
22 |
(23,857) |
(38,663) |
| Programming
and content costs |
|
(37,456) |
(47,770) |
| Bad
debt expenses |
3 |
(17,020) |
(25,208) |
| Other
operating expenses |
22 |
(27,293) |
(33,620) |
| Depreciation,
amortization and impairment of Fixed Assets |
22 |
(233,281) |
(264,278) |
| Operating
loss |
|
(26,147) |
(11,985) |
| Earnings
(losses) from associates and joint ventures |
2 |
(1,359) |
1,648 |
| Financial
costs |
23 |
797,844 |
34,582 |
| Other
financial results, net |
23 |
115,520 |
40,567 |
| Income
before income tax |
|
885,858 |
64,812 |
| Income
tax benefit (expense) |
13 |
(210,826) |
45,665 |
| Net
income for the period |
|
675,032 |
110,477 |
| |
|
|
|
| Attributable
to: |
|
|
|
| Controlling
Company |
|
672,260 |
107,669 |
| Non-controlling
interest |
|
2,772 |
2,808 |
| |
|
675,032 |
110,477 |
| |
|
|
|
| Earnings
per share for income attributable to the Controlling Company - Basic and diluted |
1.c |
312.14 |
49.99 |
The accompanying
notes are an integral part of these unaudited condensed consolidated financial statements.
See Note 22
for additional information on operating expenses per function.
TELECOM
ARGENTINA S.A.
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
(In millions
of Argentine pesos in current currency - Note 1.d)
| |
Three-month
period
ended March 31, |
| |
2024 |
2023 |
| |
|
|
| Net
income for the period |
675,032 |
110,477 |
| |
|
|
| Other
comprehensive income |
|
|
| Items
that may be reclassified to profit or loss |
|
|
| Currency
translation adjustments (no effect on Income Tax) |
(104,170) |
(2,987) |
| DFI
effects classified as hedges |
698 |
(791) |
| Income
Tax effects on DFI classified as hedges and others |
(267) |
295 |
| Other
comprehensive loss, net of tax |
(103,739) |
(3,483) |
| |
|
|
| Total
comprehensive income for the period |
571,293 |
106,994 |
| |
|
|
| Attributable
to: |
|
|
| Controlling
Company |
598,958 |
104,663 |
| Non-controlling
interest |
(27,665) |
2,331 |
| |
571,293 |
106,994 |
The accompanying
notes are an integral part of these unaudited condensed consolidated financial statements.
TELECOM
ARGENTINA S.A.
CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY
(In
millions of Argentine pesos in current currency – Note 1.d)
| |
Owners
contribution |
Reserves |
|
| |
Outstanding
shares
|
Inflation
adjustment |
Contributed
Surplus |
Legal |
Special
reserve for
IFRS
implementation |
Facultative
(2) |
Other
comprehensive
loss |
Retained
earnings |
Equity
attributable
to
controlling
company |
Equity
attributable
to non-
controlling
interest |
Total
Equity |
Capital
nominal
value
(1) |
| Balances
as of January 1, 2023 |
2,154 |
1,301,576 |
3,208,341 |
77,354 |
28,363 |
278,680 |
(155,136) |
(981,309) |
3,760,023 |
76,542 |
3,836,565 |
| Comprehensive
income: |
|
|
|
|
|
|
|
|
|
|
|
| Net
income for the period |
- |
- |
- |
- |
- |
- |
- |
107,669 |
107,669 |
2,808 |
110,477 |
| Other
comprehensive loss |
- |
- |
- |
- |
- |
- |
(3,006) |
- |
(3,006) |
(477) |
(3,483) |
| Total
Comprehensive income (loss) |
- |
- |
- |
- |
- |
- |
(3,006) |
107,669 |
104,663 |
2,331 |
106,994 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Balances
as of March 31, 2023 |
2,154 |
1,301,576 |
3,208,341 |
77,354 |
28,363 |
278,680 |
(158,142) |
(873,640) |
3,864,686 |
78,873 |
3,943,559 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Balances
as of January 1, 2024 |
2,154 |
1,301,576 |
1,914,960 |
77,354 |
28,363 |
432,389 |
(79,042) |
(390,775) |
3,286,979 |
117,584 |
3,404,563 |
| Comprehensive
income: |
|
|
|
|
|
|
|
|
|
|
|
| Net
income for the period |
- |
- |
- |
- |
- |
- |
- |
672,260 |
672,260 |
2,772 |
675,032 |
| Other
comprehensive loss |
- |
- |
- |
- |
- |
- |
(73,302) |
- |
(73,302) |
(30,437) |
(103,739) |
| Total
Comprehensive income (loss) |
- |
- |
- |
- |
- |
- |
(73,302) |
672,260 |
598,958 |
(27,665) |
571,293 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Balances
as of March 31, 2024 |
2,154 |
1,301,576 |
1,914,960 |
77,354 |
28,363 |
432,389 |
(152,344) |
281,485 |
3,885,937 |
89,919 |
3,975,856 |
(1) See
Note 20 to these unaudited condensed consolidated financial statements.
(2) Correspond
to the Voluntary reserve to maintain the Company's level of capital expenditures and its current solvency level.
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
TELECOM
ARGENTINA S.A.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions
of Argentine pesos in current currency – Note 1.d)
| |
|
Three-month
period
ended March 31, |
| |
Note |
2024 |
2023 |
| CASH
FLOWS FROM (USED IN) OPERATING ACTIVITIES |
|
|
|
| Net
income for the period |
|
675,032 |
110,477 |
| Adjustments
to reconcile net income to net cash flows provided by operating activities |
|
|
|
| Allowances
deducted from assets |
|
19,009 |
23,074 |
| Depreciation
of PP&E |
7 |
177,941 |
205,796 |
| Amortization
of intangible assets |
8 |
20,873 |
33,299 |
| Amortization
of rights of use assets |
9 |
34,386 |
24,118 |
| Disposals
of Fixed Assets and consumption of materials |
|
338 |
268 |
| Earnings
(losses) from associates and joint ventures |
2.a |
1,359 |
(1,648) |
| Financial
results and others |
|
(950,299) |
(108,452) |
| Income
tax |
13 |
210,826 |
(45,665) |
| Income
tax paid (*) |
|
(252) |
(1,133) |
| Net
increase in assets |
2.b |
(120,468) |
(103,848) |
| Net
increase in liabilities |
2.b |
102,484 |
69,832 |
| Total
cash flows from operating activities |
|
171,229 |
206,118 |
| CASH
FLOWS FROM (USED IN) INVESTING ACTIVITIES |
|
|
|
| Payments
for PP&E |
|
(68,032) |
(68,606) |
| Payments
for intangible asset acquisitions |
|
(5,991) |
(3,305) |
| Dividends
from associates |
2.b |
281 |
- |
| Proceeds
from the sale of PP&E and intangible assets |
|
2,566 |
4 |
| Payments
for investments not considered as cash and cash equivalents |
|
(161,394) |
(166,473) |
| Proceeds
from sale of investments not considered as cash and cash equivalents |
|
8,352 |
698 |
| Total
cash flows used in investing activities |
|
(224,218) |
(237,682) |
| CASH
FLOWS FROM (USED IN) FINANCING ACTIVITIES |
|
|
|
| Proceeds
from borrowings |
2.b |
191,171 |
163,080 |
| Payment
of borrowings |
2.b |
(73,487) |
(65,015) |
| Payment
of interests and related expenses |
2.b |
(76,409) |
(70,736) |
| Payments
of leases liabilities |
15 |
(13,619) |
(17,594) |
| Total
cash flows from financing activities |
|
27,656 |
9,735 |
| |
|
|
|
| NET
DECREASE IN CASH AND CASH EQUIVALENTS |
|
(25,333) |
(21,829) |
| CASH
AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR |
|
242,252 |
189,109 |
| NET
FOREIGN EXCHANGE DIFFERENCES AND RECPAM ON CASH AND CASH EQUIVALENTS |
|
(66,315) |
(5,950) |
| CASH
AND CASH EQUIVALENTS AT THE END OF THE PERIOD |
|
150,604 |
161,330 |
| (*) |
Three-month
period
ended
March 31, |
| |
2024 |
2023 |
| Corresponding
to Controlling Company |
- |
(1,005) |
| Corresponding
to subsidiaries |
(252) |
(128) |
| |
(252) |
(1,133) |
The accompanying
notes are an integral part of these unaudited condensed consolidated financial statements.
See Note 2.b
for additional information on the consolidated statements of cash flows.
TELECOM
ARGENTINA S.A.
NOTES
TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS AS OF MARCH 31, 2024 AND 2023 (*)
(In millions
of Argentine pesos in current currency, except as otherwise indicated)
INDEX
(*)
By convention the definitions used in the notes are in the Glossary of Terms.
TELECOM
ARGENTINA S.A.
NOTE
1 – BASIS OF PREPARATION OF THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SIGNIFICANT ACCOUNTING POLICIES
| a) | Basis
of preparation and significant accounting policies |
As
required by the CNV, the unaudited condensed consolidated financial statements of the Company have been prepared in accordance with RT
26 of FACPCE (and its amendments), which adopted IFRS Accounting Standards as issued by the IASB, standards also adopted by the CPCECABA.
For
the preparation of these unaudited condensed consolidated financial statements, the Company has elected to make use of the option provided
by IAS 34 and has prepared them in its condensed form. Therefore, these financial statements do not include all the information required
in an annual financial statement and, consequently, they must be read jointly with the annual financial statements as of December 31,
2023, which can be consulted at the Company´s website (https://institucional.telecom.com.ar/inversores/informacionfinanciera.html).
Therefore, these unaudited condensed consolidated financial statements were prepared following the same accounting policies as in the
most recent annual financial statements.
These
unaudited condensed consolidated financial statements were prepared including in the consolidation process the following companies:
Company
|
Main
Activity |
Country |
Telecom
Argentina's
direct/indirect interest in
capital stock and votes |
| Núcleo
(a) |
Mobile
telecommunications Services |
Paraguay |
67.50% |
| Personal
Envíos |
Mobile
financial services |
Paraguay |
67.50% |
| Tuves
Paraguay (a) |
Distribution
of television and audio signals direct to home services |
Paraguay |
67.50% |
| Televisión
Dirigida |
Cable
television services |
Paraguay |
100.00% |
| AVC
Continente Audiovisual |
Broadcasting
services |
Argentina |
100.00% |
| Inter
Radios |
Broadcasting
services |
Argentina |
100.00% |
| Micro
Sistemas |
Services
related to the use of electronic payment media |
Argentina |
100.00% |
| Pem
|
Investment |
Argentina |
100.00% |
| Cable
Imagen |
Closed-circuit
television |
Argentina |
100.00% |
| Personal
Smarthome (b) |
Security
solutions and services |
Argentina |
100.00% |
| NYS2
(b) |
ICT
Services and Audiovisual Communication Services. |
Argentina |
100,00% |
| NYSSA
|
Provision
of internet access services. |
Argentina |
100.00% |
| Adesol
(c) |
Holding |
Uruguay |
100.00% |
| Opalker
|
Cybersecurity,
content platform and related services |
Uruguay |
100.00% |
| Ubiquo
(d) |
Cybersecurity
services and products |
Chile |
95.00% |
| Telecom
USA |
Telecommunication
services |
USA |
100.00% |
| Micro
Fintech Holding (e) (b) |
Holding |
USA |
100.00% |
| (a) | Regarding
the Merger Commitment of both companies, as of the date of issuance of these unaudited condensed
consolidated financial statements, the approval of the merger from the Public Registry of
Commerce is still pending. |
| (b) | As
of March 31, 2024 is a dormant entity. |
| (c) | Includes
the 100% interest in Telemas S.A., which holds interests in the following special-purpose
entities: Audomar S.A., Bersabel S.A., Dolfycor S.A., Reiford S.A., Space Energy S.A., Tracel
S.A. and Visión Satelital S.A.. |
| (d) | Company
indirectly acquired by the subsidiary Opalker on June 20, 2023. |
| (e) | On
October 11, 2023, Telecom Argentina established the company Micro Fintech Holding LLC
in the State of Delaware, USA. Telecom Argentina is the owner of 100% of the participation
in such company. |
The
preparation of these unaudited condensed consolidated financial statements in accordance with IFRS Accounting Standards requires that
the Company's Management make estimates that affect the figures disclosed in the financial statements or its complementary information.
Actual results may differ from these estimates.
These
unaudited condensed consolidated financial statements are expressed in millions of Argentine pesos, on an accrual basis of accounting
(except for the consolidated statement of cash flows), based on historical cost, except for certain financial assets and liabilities
(includes DFI) that are measured at fair value and are prepared in current currency as of March 31, 2024 (see item 1.d).
The
figures as of December 31, 2023 and for the three-month period ended on March 31, 2023, which are disclosed in these unaudited
condensed consolidated financial statements for comparative purposes, are a result of restating the financial statements as of such dates
to values in current currency as of March 31, 2024. This is as consequence of the restatement process of the financial information
described in point d). When applicable, certain reclassifications were made for comparative purposes.
TELECOM
ARGENTINA S.A.
These
unaudited condensed consolidated financial statements as of March 31, 2024, were approved by resolution of the Board of Directors’
meeting held on May 8, 2024.
These unaudited
condensed consolidated financial statements contain all disclosures required under IAS 34. Some additional disclosures required by the
LGS and/or by the CNV have been also included.
The
Executive Committee and the CEO have a strategic and operational vision of Telecom as a single business unit, according to the current
regulatory context of the converged ICT Services industry (adding to the same segment both the activities related to the mobile services,
internet services, cable television and fixed and data services, services governed by the same regulatory framework of ICT Services).
To exercise its functions, both the Executive Committee and the CEO receive periodically the economic-financial information of Telecom
Argentina and its subsidiaries (in current currency as of the date of each transaction), that is prepared as a single segment and evaluate
the evolution of business as a unit of generation of results, administrating the resources in a unique way to achieve the objectives.
Regarding costs, they are not specifically allocated to a type of service, considering that the Company has a single payroll and operating
expenses that affect all services in general (non-specific). Further, decisions on CAPEX affect all the types of services provided by
Telecom in Argentina and are not allocated specifically to one of them.
Additionally,
Telecom, through Micro Sistemas, develops activities in the fintech industry in Argentina. Telecom also carries out activities abroad
(Paraguay, USA, Uruguay and Chile).
The
operations that Telecom develops through Micro Sistemas, and those developed abroad, are not analyzed as a separate segment by the Executive
Committee and the CEO, considering that they are not considered as individually significant. These operations do not meet the aggregation
criteria established by the standard to be grouped within the "ICT Services in Argentina" segment, and considering that they
do not exceed any of the quantitative thresholds identified in the standard to qualify as reportable segments, they are grouped within
the category "Other segments".
The
Executive Committee and the CEO continue to monitor this business to evaluate the manner in which its performance is reviewed and, eventually,
its consideration as a separate reportable segment provided it complies with the requirements established by IFRS Accounting Standards
to that effect.
The
Executive Committee and the CEO evaluate the profitability for each reportable segment based on the measure of the Adjusted EBITDA. Adjusted
EBITDA is defined as our net (loss) income less income tax, financial results, Earnings (losses) from associates and joint ventures,
and depreciation, amortization and impairment of Fixed Assets.
Presented
below is the Segment financial information as it is analyzed by the Executive Committee and the CEO for the three-month period ended
March 31, 2024 and 2023.
Consolidated
Income Statement as of March 31, 2024
| |
ICT
Services
in
Argentina |
ICT
Services in
Argentina –
Inflation
restatement |
ICT
Services in
Argentina
restated for
inflation |
Other
segments |
Other
segments –
Inflation
restatement |
Other
segments
restated for
inflation |
Eliminations |
Total |
| Revenues
|
559,149 |
61,935 |
621,084 |
59,745 |
7,242 |
66,987 |
(4,155) |
683,916 |
| Operating
costs without depreciation, amortization and impairment of Fixed Assets |
(371,804) |
(58,286) |
(430,090) |
(45,390) |
(5,457) |
(50,847) |
4,155 |
(476,782) |
| Adjusted
EBITDA |
187,345 |
3,649 |
190,994 |
14,355 |
1,785 |
16,140 |
- |
207,134 |
| |
|
|
|
|
|
| Depreciation,
amortization and impairment of Fixed Assets |
|
|
|
|
(233,281) |
| Operating
loss |
|
|
|
|
(26,147) |
| Losses
from associates and joint ventures |
|
|
|
|
(1,359) |
| Financial
cost |
|
|
|
|
797,844 |
| Other
financial results, net |
|
|
|
|
115,520 |
| Income
before income tax |
|
|
|
|
885,858 |
| Income
tax expense |
|
|
|
|
(210,826) |
| Net
income for the period |
|
|
|
|
675,032 |
| |
|
|
|
|
|
|
|
|
| Attributable
to: |
|
|
|
|
|
| Controlling
Company |
|
|
|
|
672,260 |
| Non-controlling
interest |
|
|
|
|
2,772 |
| |
|
|
|
|
|
|
|
675,032 |
TELECOM
ARGENTINA S.A.
Consolidated
Income Statement as of March 31, 2023
| |
ICT
Services
in Argentina |
ICT
Services in
Argentina –
Inflation
restatement |
ICT
Services in
Argentina
restated for
inflation |
Other
segments |
Other
segments –
Inflation
restatement |
Other
segments
restated for
inflation |
Eliminations |
Total |
| Revenues
|
188,104 |
594,368 |
782,472 |
13,126 |
41,451 |
54,577 |
(3,836) |
833,213 |
| Operating
costs without depreciation, amortization and impairment of Fixed Assets |
(130,435) |
(416,014) |
(546,449) |
(9,219) |
(29,088) |
(38,307) |
3,836 |
(580,920) |
| Adjusted
EBITDA |
57,669 |
178,354 |
236,023 |
3,907 |
12,363 |
16,270 |
- |
252,293 |
| |
|
|
|
|
|
| Depreciation,
amortization and impairment of Fixed Assets |
|
|
|
|
(264,278) |
| Operating
loss |
|
|
|
|
|
|
|
(11,985) |
| Earnings
from associates and joint ventures |
|
|
|
|
|
|
1,648 |
| Financial
cost |
|
|
|
|
|
|
34,582 |
| Other
financial results, net |
|
|
|
|
|
|
40,567 |
| Income
before income tax |
|
|
|
|
|
64,812 |
| Income
tax benefit |
|
|
|
|
|
|
|
45,665
|
| Net
income for the period |
|
|
|
|
|
|
|
110,477 |
| |
|
|
|
|
|
|
|
|
| Attributable
to: |
|
|
|
|
|
|
|
|
| Controlling
Company |
|
|
|
|
|
|
|
107,669 |
| Non-controlling
interest |
|
|
|
|
|
|
|
2,808 |
| |
|
|
|
|
|
|
|
110,477 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
information per geographical area is disclosed below:
| |
As
of March 31, |
As
of December 31, |
| |
2024 |
2023 |
2023 |
| Revenues
from customers located in Argentina |
619,569 |
779,675 |
n/a |
| Revenues
from foreign customers |
64,347 |
53,538 |
n/a |
| |
|
|
|
| CAPEX
corresponding to the segment “ICT Services in Argentina” |
94,063 |
89,453 |
n/a |
| CAPEX
corresponding to the segment “Other segments” |
10,605 |
8,964 |
n/a |
| |
|
|
|
| Fixed
Assets corresponding to the segment “ICT Services in Argentina” |
7,004,080 |
n/a |
7,091,335 |
| Fixed
Assets corresponding to the segment “Other segments” |
298,221 |
n/a |
395,633 |
| |
|
|
|
| Borrowings
corresponding to the segment “ICT Services in Argentina” |
2,405,516 |
n/a |
3,142,343 |
| Borrowings
corresponding to the segment “Other segments” |
40,520 |
n/a |
84,276 |
| |
|
|
|
Basic
earnings per share is calculated by dividing the net income attributable to the Controlling Company by the weighted average number of
ordinary shares outstanding during the period. On the other hand, diluted earnings per share is computed by dividing the net income attributable
to the Controlling Company for the period by the weighted average number of common shares issued and to be potentially issued at the
end of the period. Since the Company has no dilutive potential common stock outstanding, basic and dilutive earnings per share amounts
do not differ.
For
the three-month period ended March 31, 2024 and 2023, the weighted average number of shares outstanding amounted to 2,153,688,011.
| d) | Financial
reporting in hyperinflationary economies |
Since
Argentina has been considered a high-inflation economy for accounting purposes in accordance with IAS 29 since July 1, 2018, the
financial information expressed in Argentine pesos is restated in current currency of March 31, 2024.
The
table below shows the evolution of the indexes as of March 31, 2024 and 2023 and December 31, 2023 according to official statistics
(INDEC) in accordance with Resolution No. 539/18 of the FACPCE and the devaluation of the Argentine peso vs. de US dollar for the
same years / periods:
TELECOM
ARGENTINA S.A.
| |
As
of March 31,
2023 |
As
of December 31,
2023 |
As
of March 31,
2024 |
| |
|
|
|
| National
Consumer Price Index (National CPI) (December 2016=100) |
1,381.16 |
3,533.19 |
5,357.09 |
| |
|
|
|
| Variation
in prices |
|
|
|
| Annual
|
104.3% |
211.4% |
287.9% |
| Accumulated
3 months |
21.7% |
n/a |
51.6% |
| |
|
|
|
| Banco
Nación US$/$ exchange rate |
209.01 |
808.45 |
858 |
| |
|
|
|
| Variation
in the exchange rate |
|
|
|
| Annual |
88.3% |
356.3% |
310.5% |
| Accumulated
3 months |
18.0% |
n/a |
6.1% |
The
Company followed the same restatement policies for items identified in the annual consolidated
financial statements as of December 31, 2023.
NOTE
2 – CASH AND CASH EQUIVALENTS AND INVESTMENTS. ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS
| a) | Cash
and cash equivalents and Investments |
| |
March 31, |
December 31, |
| Cash
and cash equivalents |
2024 |
2023 |
| Cash
and Banks (1) |
73,831 |
137,926 |
| Time
deposits |
57,016 |
53,899 |
| Mutual
funds |
4,400 |
21,085 |
| Government
bonds at fair value |
15,357 |
29,342 |
| Total
cash and cash equivalents |
150,604 |
242,252 |
| (1) | As
of March 31, 2024 includes restricted funds for $10,193 million corresponding to the
funds to be paid to clients. |
| Investments |
|
|
| Current
|
|
|
| Government
bonds at fair value |
301,688 |
168,815 |
| Time
deposits |
12,853 |
18,361 |
| Mutual
funds |
553 |
788 |
| |
315,094 |
187,964 |
| Non-
current |
|
|
| Investments
in associates and joint ventures(a) |
32,936 |
36,096 |
| 2003
Telecommunications Fund |
1 |
1 |
| |
32,937 |
36,097 |
| Total
investments |
348,031 |
224,061 |
| (a) | Information
on Investments in associates and joint ventures is detailed below: |
Financial
position information:
| Companies |
Nature
of
relationship |
Main
activity |
Country |
Percentage
of
capital
stock owned
and
voting rights
(%) |
Valuation
as of
03.31.2024 |
Valuation
as of
12.31.2023 |
| Ver
TV. (1) |
Associate |
Cable
television station |
Argentina |
49.00 |
14,895 |
15,909 |
| TSMA
(1) (2) (3) |
Associate |
Cable
television station |
Argentina |
50.10 |
5,770 |
5,783 |
| La
Capital Cable (1) (2) |
Associate |
Closed-circuit
television |
Argentina |
50.00 |
3,474 |
3,409 |
| OPH
(1)(4) |
Joint
venture |
Holding |
USA |
50.00 |
8,797 |
10,995 |
| Total |
|
|
|
|
32,936 |
36,096 |
| (1) | Data
about the issuer arises from extra-accounting information. |
| (2) | Direct
and indirect interest. |
| (3) | Despite
owning a percentage higher than a 50% of interest, the Company does not have the control
in accordance with the requirements of IFRS Accounting Standards. |
| (4) | As
of March 31, 2024, includes $(1,520) million of currency translation adjustments. |
TELECOM
ARGENTINA S.A.
Earnings
information:
| |
Three-months
period
ended
March 31, |
| |
2024 |
2023 |
| |
Profit
(loss) |
| Ver
TV |
(733) |
1,125 |
| TSMA |
(13) |
217 |
| La
Capital Cable |
65 |
306 |
| OPH |
(678) |
- |
| Total |
(1,359) |
1,648 |
| b) | Additional
information on the consolidated statements of cash flows |
Changes
in assets/liabilities components:
| |
March 31, |
| Net
(increase) decrease in assets |
2024 |
2023 |
| Trade
receivables |
(85,087) |
(62,036) |
| Other
receivables |
(23,965) |
(36,646) |
| Inventories |
(11,416) |
(5,166) |
| |
(120,468) |
(103,848) |
| Net
increase (decrease) in liabilities |
|
|
| Trade
payables |
46,413 |
58,114 |
| Salaries
and social security payables |
15,282 |
(66) |
| Other
taxes payables |
23,681 |
14,270 |
| Other
liabilities and provisions |
17,108 |
(2,486) |
| |
102,484 |
69,832 |
Main
Financing activities components
The
following table presents the main financing activities components:
| |
March 31, |
| |
2024 |
2023 |
| Bank
overdrafts |
191,171 |
109,631 |
| Notes |
- |
49,473 |
| Bank
and other financial entities loans |
- |
3,976 |
| Total
borrowings proceeds |
191,171 |
163,080 |
| Notes |
(19,263) |
(9,449) |
| Bank
and other financial entities loans |
(50,829) |
(48,336) |
| Loans
for purchase of equipment |
(3,395) |
(7,230) |
| Total
payment of borrowings |
(73,487) |
(65,015) |
| Bank
overdrafts |
(22,603) |
(8,735) |
| Notes
|
(30,357) |
(17,546) |
| Bank
and other financial entities loans |
(22,235) |
(27,590) |
| By
DFI and loans for purchase of equipment |
(1,214) |
(16,865) |
| Total
payment of interest and related expenses |
(76,409) |
(70,736) |
Main
non-cash operating transactions
Main non-cash
operating transactions and that were eliminated from the consolidated statement of cash flows are the following:
| |
March 31, |
| |
2024 |
2023 |
| PP&E
and intangible assets acquisition financed with accounts payable |
48,710 |
94,939 |
| Right
of use assets acquisition through leases |
40,804 |
35,506 |
| Trade
payables cancelled with borrowings |
- |
2,510 |
| Trade
payables cancelled with government bonds |
1,456 |
- |
| Dividends
distribution from associates uncollected |
- |
504 |
Dividends
proceeds
Brief
information on dividends proceeds by the Company is provided below:
Three-month
period ended
March 31 |
Paying
Company |
Distributed
amount |
Dividends
collected |
Distribution
month |
Currency
of the
transaction
date |
Current
currency
as of March 31,
2024 |
Collection
month |
Current
currency
as of March 31,
2024 |
| 2024 |
Ver
TV |
March,
2024 |
281 |
281 |
March,
2024 |
281 |
| |
|
|
|
281 |
|
281 |
TELECOM
ARGENTINA S.A.
NOTE 3
– TRADE RECEIVABLES
| |
March 31, |
December 31, |
| Current
Trade receivables |
2024 |
2023 |
| Ordinary
receivables |
256,157 |
253,593 |
| Companies
under section 33 - Law No. 19,550 and related parties (Note 24.b) |
1,541 |
1,051 |
| Contractual
asset IFRS 15 |
48 |
67 |
| Allowance
for doubtful accounts |
(49,099) |
(53,254) |
| |
208,647 |
201,457 |
| Non-current
Trade receivables |
|
|
| Ordinary
receivables |
338 |
356 |
| Contractual
asset IFRS 15 |
17 |
26 |
| |
355 |
382 |
| Total
trade receivables, net |
209,002 |
201,839 |
Movements
in the allowance for doubtful accounts are as follows:
| |
March 31, |
| |
2024 |
2023 |
| At
the beginning of the year |
(53,254) |
(72,656) |
| Increases |
(17,020) |
(25,208) |
| Uses |
1,907 |
10,728 |
| RECPAM
and currency translation adjustments |
19,268 |
13,979 |
| At
the end of the period |
(49,099) |
(73,157) |
NOTE 4
– OTHER RECEIVABLES
| |
March 31, |
December 31, |
| Current
Other Receivables |
2024 |
2023 |
| Prepaid
expenses |
17,713 |
14,255 |
| Other
tax credits |
10,817 |
8,750 |
| Companies
under section 33 - Law No. 19,550 and related parties (Note 24.b) |
322 |
328 |
| DFI |
1,831 |
2,349 |
| Indemnification
assets |
48 |
68 |
| Guarantee
deposits |
2,903 |
3,665 |
| Call
option |
4,277 |
6,115 |
| Other |
15,887 |
18,740 |
| Allowance
for other receivables |
(2,024) |
(2,659) |
| |
51,774 |
51,611 |
| Non-Current
Other Receivables |
|
|
| Prepaid
expenses |
2,297 |
3,070 |
| Income
tax credits |
12,687 |
15,499 |
| Other
tax credits |
102 |
83 |
| DFI |
271 |
663 |
| Guarantee
deposits |
5,454 |
7,235 |
| Other |
540 |
3,213 |
| |
21,351 |
29,763 |
| Total
other receivables, net |
73,125 |
81,374 |
Movements
in the allowance for current other receivables are as follows:
| |
March 31, |
| |
2024 |
2023 |
| At
the beginning of the year |
(2,659) |
(3,537) |
| Increases |
(270) |
(66) |
| RECPAM
and currency translation adjustments |
905 |
632 |
| At
the end of the period |
(2,024) |
(2,971) |
NOTE
5 – INVENTORIES
| |
March 31, |
December 31, |
| |
2024 |
2023 |
| Mobile
handsets and others |
47,147 |
49,878 |
| Allowance
for obsolescence of inventories |
(2,939) |
(2,073) |
| Total
inventories |
44,208 |
47,805 |
Movements
in the allowance for obsolescence of inventories are as follows:
| |
March 31, |
| |
2024 |
2023 |
| At
the beginning of the year |
(2,073) |
(2,312) |
| Increases |
(895) |
(116) |
| Uses |
29 |
78 |
| At
the end of the period |
(2,939) |
(2,350) |
TELECOM
ARGENTINA S.A.
NOTE 6
– GOODWILL
| |
March 31, |
December 31, |
| |
2024 |
2023 |
| Argentina |
2,328,158 |
2,328,158 |
| Abroad |
8,977 |
12,830 |
| Total
goodwill |
2,337,135 |
2,340,988 |
Movements
in Goodwill are as follows:
| |
March 31, |
| |
2024 |
2023 |
| At
the beginning of the year |
2,340,988 |
2,336,054 |
| Increases |
- |
29 |
| Currency
translation adjustments |
(3,853) |
(49) |
| At
the end of the period |
2,337,135 |
2,336,034 |
NOTE 7
– PP&E
| |
March 31, |
December 31, |
| |
2024 |
2023 |
| PP&E
|
3,321,601 |
3,481,709 |
| Allowance
for obsolescence and impairment of materials |
(33,831) |
(33,346) |
| Impairment
allowance of PP&E |
(3,840) |
(3,759) |
| |
3,283,930 |
3,444,604 |
Movements
in PP&E (without allowance for obsolescence and impairment of materials and impairment allowance of PP&E) are as follows:
| |
March 31, |
| |
2024 |
2023 |
| At
the beginning of the year |
3,481,709 |
3,789,784 |
| CAPEX |
98,191 |
94,403 |
| Currency
translation adjustments |
(80,204) |
(1,986) |
| Net
carrying value of decreases and consumption of materials |
(154) |
(198) |
| Depreciation
of the period |
(177,941) |
(205,796) |
| At
the end of the period |
3,321,601 |
3,676,207 |
Movements
in the allowance for obsolescence and impairment of materials are as follows:
| |
March 31, |
| |
2024 |
2023 |
| At
the beginning of the year |
(33,346) |
(42,867) |
| (Increases)/Decreases |
(743) |
3,293 |
| Currency
translation adjustments |
258 |
12 |
| At
the end of the period |
(33,831) |
(39,562) |
Movements
in the impairment allowance of PP&E are as follows:
| |
March 31, |
| |
2024 |
2023 |
| At
the beginning of the year |
(3,759) |
(3,642) |
| Increases
|
(81) |
(977) |
| At
the end of the period |
(3,840) |
(4,619) |
NOTE
8 – INTANGIBLE ASSETS
| |
March 31, |
December 31, |
| |
2024 |
2023 |
| Intangible
assets |
1,407,030 |
1,425,767 |
| Impairment
allowance |
(51,427) |
(51,427) |
| |
1,355,603 |
1,374,340 |
Movements
in Intangible assets (without considering the impairment allowance) are as follows:
| |
March 31, |
| |
2024 |
2023 |
| At
the beginning of the year |
1,425,767 |
1,254,419 |
| CAPEX |
6,477 |
4,014 |
| Currency
translation adjustments |
(4,341) |
(159) |
| Amortization
of the period |
(20,873) |
(33,299) |
| At
the end of the period |
1,407,030 |
1,224,975 |
TELECOM
ARGENTINA S.A.
Movements
in Impairment allowance of intangible assets are as follows:
| |
March 31, |
| |
2024 |
2023 |
| At
the beginning of the year |
(51,427) |
(51,315) |
| Increases |
- |
- |
| At
the end of the period |
(51,427) |
(51,315) |
NOTE
9 – RIGHT OF USE ASSETS
| |
March 31, |
December 31, |
| |
2024 |
2023 |
| Leases
rights of use |
|
|
| Sites
|
205,424 |
208,734 |
| Real
estate and others |
31,941 |
32,138 |
| Poles |
27,267 |
22,191 |
| Indefeasible
right of use |
6,337 |
6,828 |
| Asset
retirement obligations |
54,664 |
57,145 |
| |
325,633 |
327,036 |
Movements
in right of use assets are as follows:
| |
March 31, |
| |
2024 |
2023 |
| At
the beginning of the year |
327,036 |
297,143 |
| Increase |
40,804 |
35,506 |
| Net
carrying value of decreases |
(184) |
(70) |
| Currency
translation adjustments |
(7,637) |
(93) |
| Amortization
of the period |
(34,386) |
(24,118) |
| At
the end of the period |
325,633 |
308,368 |
NOTE
10 – TRADE PAYABLES
| |
March 31, |
December 31, |
| |
2024 |
2023 |
| Current |
|
|
| Suppliers
|
407,528 |
532,484 |
| Companies
under Sect. 33–Law No. 19,550 and Related Parties (Note 24.b) |
7,912 |
8,585 |
| |
415,440 |
541,069 |
| Non-current |
|
|
| Suppliers
|
11,192 |
1,386 |
| |
11,192 |
1,386 |
| Total
trade payables |
426,632 |
542,455 |
NOTE
11 – BORROWINGS
| |
March 31, |
December 31, |
| Current |
2024 |
2023 |
| Bank
overdrafts – principal |
190,603 |
35,652 |
| Bank
and other financial entities loans – principal |
213,479 |
310,443 |
| Notes
– principal |
298,092 |
286,531 |
| Loans
for purchase of equipment |
15,366 |
23,626 |
| Remeasurement,
interest and related expenses |
136,608 |
198,104 |
| |
854,148 |
854,356 |
| Non-current |
|
|
| Notes
– principal |
1,049,918 |
1,514,903 |
| Bank
and other financial entities loans – principal |
397,014 |
606,002 |
| Loans
for purchase of equipment |
8,903 |
16,261 |
| Remeasurement,
interest and related expenses |
136,053 |
235,097 |
| |
1,591,888 |
2,372,263 |
| Total
borrowings |
2,446,036 |
3,226,619 |
Movements
in Borrowings are as follows:
| |
Balances
at
the
beginning of
the year |
Net
Cash
Flows |
Accrued
interests |
Exchange
differences,
currency
translation
adjustments
and others
|
Balances
as of
March 31,
2024 |
| Bank
overdrafts |
35,652 |
191,171 |
- |
(36,220) |
190,603 |
| Bank
and other financial entities loans – principal |
916,445 |
(50,829) |
- |
(255,123) |
610,493 |
| Notes
– principal |
1,801,434 |
(19,263) |
- |
(434,161) |
1,348,010 |
| Loans
for purchase of equipment |
39,887 |
(3,395) |
- |
(12,223) |
24,269 |
| Remeasurement,
interest and related expenses |
433,201 |
(76,409) |
56,538 |
(140,669) |
272,661 |
| Total
as of March 31, 2024 |
3,226,619 |
41,275 |
56,538 |
(878,396) |
2,446,036 |
| |
|
|
|
|
|
| Total
as of March 31, 2023 |
2,215,334 |
26,031 |
12,059 |
(*) (43,074) |
2,210,350 |
(*) Includes
$2,510 million of loans that do not represent cash movement.
TELECOM
ARGENTINA S.A.
In
relation to the situation described in Note 13.c) in the consolidated financial statements as of December 31, 2023, the Company
has complied with: a) the EBITDA/ Net Interest ratio and b) the Net Debt/EBITDA ratio established in the waivers obtained in March 2024,
and is also in compliance with the rest of the commitments assumed and in force on the date of issuance of these unaudited condensed
consolidated financial statements.
NOTE 12
– SALARIES AND SOCIAL SECURITY PAYABLES
| |
March 31, |
December 31, |
| |
2024 |
2023 |
| Current |
|
|
| Salaries,
annual complementary salaries, vacation, bonuses and their social security payables |
119,540 |
132,006 |
| Termination
benefits |
8,236 |
6,182 |
| |
127,776 |
138,188 |
| Non-current |
|
|
| Termination
benefits |
5,836 |
5,654 |
| |
5,836 |
5,654 |
| Total
salaries and social security payables |
133,612 |
143,842 |
NOTE 13
– INCOME TAX PAYABLE AND DEFERRED INCOME TAX ASSETS/LIABILITIES
Income tax
payable by company is presented below:
| |
March 31, |
December 31, |
| |
2024 |
2023 |
| Núcleo |
2,218 |
1,913 |
| NYSSA |
258 |
224 |
| Adesol |
354 |
158 |
| Pem |
36 |
58 |
| Opalker |
13 |
15 |
| Telecom
USA |
50 |
- |
| |
(*) 2,929 |
2,368 |
(*)
Includes $(925) million corresponding to the currency translation adjustments on initial balances of foreign subsidiaries, RECPAM and
to compensation made with tax credits.
Deferred
Income tax assets and liabilities, net of Telecom and its subsidiaries, and the actions for recourse tax receivable are presented below:
| |
March 31, |
December 31, |
| |
2024 |
2023 |
| Tax
carryforward |
(167,621) |
(749,569) |
| Allowance
for doubtful accounts |
(21,098) |
(25,447) |
| Legal
Claims and contingent liabilities |
(8,956) |
(11,093) |
| PP&E,
intangible assets and right of use assets |
929,152 |
943,905 |
| Cash
dividends from foreign companies |
15,464 |
20,669 |
| Income
tax inflation adjustment effect |
147,179 |
501,365 |
| Other
deferred tax liabilities (assets), net |
(3,061) |
(239) |
| Total
deferred tax liabilities, net |
891,059 |
679,591 |
| Actions
for recourse tax receivable |
(888) |
(1,346) |
| Total
deferred tax liability, net |
(*) 890,171 |
678,245 |
| |
|
|
| Net
deferred tax assets |
(16,282) |
(20,947) |
| Net
deferred tax liabilities |
906,453 |
699,192 |
(*)
Includes $2,571 million of currency translation adjustments on foreign subsidiaries’ initial balances.
As
of March 31, 2024, Telecom and some subsidiaries have cumulative tax loss carryforwards of $479,244 million (including $296 million
of unrecognized tax loss carryforwards for considering them non-recoverable), that calculated considering statutory income tax rate,
represents a deferred tax asset of $167,621 million.
The detail
of the maturities of estimated Tax loss carryforward is disclosed below:
| Company |
Tax
loss carryforward
generation year |
Tax
loss carryforward
amount as of 03.31.2024 |
Tax
loss carryforward
expiration year |
| Telecom |
2023 |
450,562 |
2028 |
| Micro
Sistemas |
2021 |
240 |
2026 |
| Micro
Sistemas |
2022 |
3,424 |
2027 |
| Micro
Sistemas |
2023 |
17,505 |
2028 |
| Micro
Sistemas |
2024 |
7,102 |
2029 |
| Interradios |
2023 |
1 |
2028 |
| Pem |
2024 |
63 |
2029 |
| Ubiquo |
2022 |
5 |
No
deadline |
| Ubiquo |
2023 |
46 |
No
deadline |
| AVC
Continente Audiovisual |
2021 |
3 |
2026 |
| AVC
Continente Audiovisual |
2022 |
37 |
2027 |
| AVC
Continente Audiovisual |
2023 |
135 |
2028 |
| AVC
Continente Audiovisual |
2024 |
33 |
2029 |
| Cable
Imagen |
2021 |
6 |
2026 |
| Cable
Imagen |
2022 |
16 |
2027 |
| Cable
Imagen |
2023 |
51 |
2028 |
| Cable
Imagen |
2024 |
15 |
2029 |
| |
|
479,244 |
|
TELECOM
ARGENTINA S.A.
Income
tax expense differed from the amounts computed by applying the Company’s statutory income tax rate to pre-tax income as a result
of the following:
| |
Three-month
period
ended March 31, |
| |
2024 |
2023 |
| |
Profit
(loss) |
| Income
before income tax |
885,858 |
64,812 |
| Non-taxable
items – Earnings (losses) from associates and joint ventures |
1,359 |
(1,648) |
| Non-taxable
items – Other |
320 |
(1,695) |
| Restatement
in current currency of Equity, goodwill and other |
447,470 |
427,734 |
| Subtotal |
1,335,007 |
489,203 |
| Effective
income tax rate |
34.83% |
34.74% |
| Income
tax expense at statutory tax rate of each companies |
(464,927) |
(169,949) |
| Deferred
tax liability restatement in current currency and other |
638,688 |
348,948 |
| Income
tax inflation adjustment |
(382,755) |
(130,080) |
| Income
tax on cash dividends of foreign companies |
(1,832) |
(3,254) |
| Income
tax benefit (expense) |
(210,826) |
45,665 |
| |
|
|
| Current
tax |
(1,738) |
(310) |
| Deferred
tax |
(209,088) |
45,975 |
| Income
tax benefit (expense) |
(210,826) |
45,665 |
NOTE
14 –OTHER TAXES PAYABLES
| |
March 31, |
December 31, |
| |
2024 |
2023 |
| Current |
|
|
| Other
national taxes |
54,352 |
50,329 |
| Provincial
taxes |
4,623 |
6,311 |
| Municipal
taxes |
2,325 |
2,717 |
| |
61,300 |
59,357 |
| Non-
current |
|
|
| Provincial
taxes |
7 |
17 |
| |
7 |
17 |
| Total
other taxes payables |
61,307 |
59,374 |
NOTE
15 – LEASES LIABILITIES
| |
March 31, |
December 31, |
| |
2024 |
2023 |
| Current |
|
|
| Argentina |
38,295 |
40,909 |
| Abroad |
1,883 |
2,661 |
| |
40,178 |
43,570 |
| Non-
current |
|
|
| Argentina |
56,632 |
68,732 |
| Abroad |
16,719 |
22,103 |
| |
73,351 |
90,835 |
| Total
leases liabilities |
113,529 |
134,405 |
TELECOM
ARGENTINA S.A.
Movements
in Leases liabilities are as follows:
| |
March 31, |
| |
2024 |
2023 |
| At
the beginning of the year |
134,405 |
136,445 |
| Increases
(*) |
36,696 |
35,505 |
| Financial
results, net (**) |
4,538 |
8,902 |
| Payments |
(13,619) |
(17,594) |
| Decreases
(included RECPAM and currency translation adjustments) |
(48,491) |
(24,943) |
| At
the end of the period |
113,529 |
138,315 |
(*) Included
in Rights of use assets acquisitions.
(**) Included
in Other foreign currency exchange gains (losses) and Other interests, net.
NOTE 16
– OTHER LIABILITIES
| |
March 31, |
December 31, |
| Current |
2024 |
2023 |
| Deferred
revenues on prepaid credit |
9,912 |
12,063 |
| Deferred
revenues on connection fees and international capacity leases |
2,179 |
2,614 |
| Debt
for acquisition of NYSSA |
600 |
860 |
| Companies
under section 33 - Law No. 19,550 and related parties (Note 24.b) |
2,559 |
3,575 |
| Funds
to be paid to clients |
10,193 |
10,946 |
| Other |
1,293 |
964 |
| |
26,736 |
31,022 |
| Non-current |
|
|
| Deferred
revenues on connection fees and international capacity leases |
1,661 |
2,314 |
| Pension
benefits |
2,936 |
3,410 |
| Companies
under section 33 - Law No. 19,550 and related parties (Note 24.b) |
4,485 |
6,267 |
| Debt
for acquisition of NYSSA |
1,043 |
1,556 |
| Other
|
88 |
163 |
| |
10,213 |
13,710 |
| Total
other liabilities |
36,949 |
44,732 |
NOTE
17 – PROVISIONS
The evolution
of provisions as of March 31, 2024 and 2023 is as follows:
| |
Balances
as of
December 31,
2023 |
Additions |
Reclassifica-tions |
Payments
|
RECPAM,
currency
translation
adjustments |
Balances
as
of
March 31, 2024 |
|
Capital
(i) |
Financial
result
(ii) |
| Current |
|
|
|
|
|
|
|
| Legal
Claims and contingent liabilities |
8,097 |
97 |
- |
1,376 |
(1,772) |
(2,570) |
5,228 |
| Total
current provisions |
8,097 |
97 |
- |
1,376 |
(1,772) |
(2,570) |
5,228 |
| Non-
Current |
|
|
|
|
|
|
|
| Legal
Claims and contingent liabilities |
19,418
|
1,749
|
1,460
|
(1,376) |
(5) |
(3,516) |
17,730
|
| Asset
retirement obligations |
20,181 |
4,108 |
- |
- |
- |
(6,997) |
17,292 |
| Total
non-current provisions |
39,599 |
5,857 |
1,460 |
(1,376) |
(5) |
(10,513) |
35,022 |
| |
|
|
|
|
|
|
|
| Total
provisions |
47,696 |
5,954 |
1,460 |
- |
(1,777) |
(13,083) |
40,250 |
| |
Balances
as of
December 31,
2022 |
Additions |
Reclassifica-tions |
Payments
|
RECPAM,
currency
translation
adjustments |
Balances
as
of
March 31, 2023 |
|
Capital
(iii) |
Financial
result
(ii) |
| Current |
|
|
|
|
|
|
|
| Legal
Claims and contingent liabilities |
12,435 |
1,098 |
- |
3,091 |
(1,792) |
(2,156) |
12,676 |
| Total
current provisions |
12,435 |
1,098 |
- |
3,091 |
(1,792) |
(2,156) |
12,676 |
| Non-
Current |
|
|
|
|
|
|
|
| Legal
Claims and contingent liabilities |
30,723 |
4,177 |
1,458 |
(3,091) |
- |
(3,664) |
29,603 |
| Asset
retirement obligations |
24,304 |
- |
- |
- |
- |
(4,325) |
19,979 |
| Total
non-current provisions |
55,027 |
4,177 |
1,458 |
(3,091) |
- |
(7,989) |
49,582 |
| |
|
|
|
|
|
|
|
| Total
provisions |
67,462 |
5,275 |
1,458 |
- |
(1,792) |
(10,145) |
62,258 |
| (i) | $1,846
million charged to Other operating expenses and $4,108 million to Right of use assets. |
| (ii) | Charged
to Other financial results, net - Other interests, net. |
| (iii) | Charged
to Other operating expenses. |
TELECOM
ARGENTINA S.A.
NOTE
18 – ADDITIONAL INFORMATION OF FINANCIAL ASSETS AND LIABILITIES
Financial
assets and liabilities denominated in foreign currencies
Financial
assets and liabilities denominated in foreign currencies as of March 31, 2024, and December 31, 2023 are the following:
| |
03.31.2024 |
12.31.2023 |
| |
In
equivalent millions of Argentine pesos |
| Assets |
189,971 |
271,373 |
| Liabilities |
(2,341,538) |
(3,414,888) |
| Net
Liabilities |
(2,151,567) |
(3,143,515) |
Offsetting
of financial assets and financial liabilities
The
following table presents financial assets and liabilities that are offset as of March 31, 2024 and December 31, 2023:
| |
As
of March 31, 2024 |
| |
Trade
receivables |
Other
receivables |
Trade
payables |
Other
liabilities |
| Current
and non-current assets (liabilities) - Gross value |
212,151 |
29,578 |
(429,781) |
(22,644) |
| Offsetting |
(3,149) |
(2,472) |
3,149 |
2,472 |
| Current
and non-current assets (liabilities) – Book value |
209,002 |
27,106 |
(426,632) |
(20,172) |
| |
As
of December 31, 2023 |
| |
Trade
receivables |
Other
receivables |
Trade
payables |
Other
liabilities |
| Current
and non-current assets (liabilities) - Gross value |
212,880 |
37,122 |
(553,496) |
(25,489) |
| Offsetting |
(11,041) |
(1,322) |
11,041 |
1,322 |
| Current
and non-current assets (liabilities) – Book value |
201,839 |
35,800 |
(542,455) |
(24,167) |
Fair
value hierarchy and other disclosures
The
measurement at fair value of the financial instruments of Telecom are classified according to the three levels set out in IFRS 13:
| - | Level
1: Fair value determined by quoted prices (unadjusted) in active markets for identical assets
or liabilities. |
| - | Level
2: Fair value determined based on inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly (e.g. as prices) or indirectly
(e.g. derived from prices). |
| - | Level
3: Fair value determined by unobservable inputs where the reporting entity is required to
develop its own assumptions. |
Financial
assets and liabilities recognized at fair value as of March 31, 2024 and December 31, 2023, and the level of hierarchy are
listed below:
| March 31,
2024 |
|
Level
1 |
|
Level
2 |
|
Total |
| Assets |
|
|
|
|
|
|
| Current
Assets |
|
|
|
|
|
|
| Mutual
Funds (1) |
|
4,953
|
|
- |
|
4,953
|
| Government
bonds (1) |
|
317,045
|
|
- |
|
317,045
|
| Other
receivables: DFI |
|
- |
|
1,831
|
|
1,831
|
| Other
receivables: Indemnification assets |
|
- |
|
10
|
|
10
|
| Non-current
Assets |
|
|
|
|
|
|
| Other
receivables: DFI |
|
- |
|
271
|
|
271
|
| Total
assets |
|
321,998
|
|
2,112
|
|
324,110
|
| Liabilities |
|
|
|
|
|
|
| Current
Liabilities |
|
|
|
|
|
|
| Other
liabilities: Debt for acquisition of NYSSA |
|
- |
|
600
|
|
600
|
| Non-current
Liabilities |
|
|
|
|
|
|
| Other
liabilities: Debt for acquisition of NYSSA |
|
- |
|
1,043
|
|
1,043
|
| Total
Liabilities |
|
- |
|
1,643
|
|
1,643
|
| (1) | Mutual
Funds are included in “Cash and cash equivalents” and “Investments”. Government bonds are included in “Cash
and cash equivalents” and “Investments”. |
TELECOM
ARGENTINA S.A.
| December 31,
2023 |
|
Level
1 |
|
Level
2 |
|
Total |
| Assets |
|
|
|
|
|
|
| Current
Assets |
|
|
|
|
|
|
| Mutual
Funds (1) |
|
21,873 |
|
- |
|
21,873 |
| Government
bonds (1) |
|
198,157 |
|
- |
|
198,157 |
| Other
receivables: DFI |
|
- |
|
2,349 |
|
2,349 |
| Other
receivables: Indemnification assets |
|
- |
|
15 |
|
15 |
| Non-current
Assets |
|
|
|
|
|
|
| Other
receivables: DFI |
|
- |
|
663 |
|
663 |
| Total
assets |
|
220,030 |
|
3,027 |
|
223,057 |
| Liabilities |
|
|
|
|
|
|
| Current
Liabilities |
|
|
|
|
|
|
| Other
liabilities: Debt for acquisition of NYSSA |
|
- |
|
860 |
|
860 |
| Non-current
Liabilities |
|
|
|
|
|
|
| Other
liabilities: Debt for acquisition of NYSSA |
|
- |
|
1,556 |
|
1,556 |
| Total
liabilities |
|
- |
|
2,416 |
|
2,416 |
| (1) | Mutual
Funds are included in “Cash and cash equivalents” and “Investments”.
Government bonds are included in “Cash and cash equivalents” and “Investments”. |
In
relation to the fair values set forth above, as of March 31, 2024, there were no changes in the methods and assumptions used with
respect to what was reported in Note 22 to the consolidated financial statements as of December 31, 2023.
The
Company also has certain financial instruments that are not measured at fair value for which the book value approximates their fair value,
except for:
Borrowings
As
of March 31, 2024, fair value of borrowings is as follows:
| |
Carrying
Value |
Fair
Value |
| |
|
|
| Notes |
1,450,479 |
1,374,040 |
| Other
borrowings |
995,557 |
1,001,432 |
| |
2,446,036 |
2,375,472 |
The
fair value of the borrowings was assessed as follows:
| a) | The
fair value of Notes traded in active markets was measured based on quoted market prices at
the end of the reporting period. As a result, its valuation classifies as Level 1. |
| b) | The
fair value of Notes that are not traded in an active market was measured based on quotes
provided by first-tier financial entities, so their valuation qualifies as Level 2. |
| c) | Fort
the rest of the borrowings, the fair values were calculated based on cash flows discounted
using a current lending rate, so as they are classified as level 3. |
NOTE
19 – PURCHASE COMMITMENTS
The
Company has entered into various purchase commitments with domestic and foreign suppliers amounting to approximately $555,780 million
as of March 31, 2024 (of which $166,041 million corresponds to Fixed Assets commitments). These purchase commitments include those
that contain “take or pay” clauses, which force the buyer to purchase a quantity of a product or service in a period, usually
annually, or, alternatively, to pay that amount even if it has not been taken or accepted to receive it.
NOTE
20 – EQUITY
As
of March 31, 2024 and December 31, 2023, the capital stock of Telecom Argentina amounts to $2,153,688,011, represented by the
same number of common book-entry shares with nominal value of $1, as detailed below:
| Class of
Shares |
|
Total |
| Class “A” |
|
683,856,600 |
| Class “B” |
|
628,058,019 |
| Class “C” |
|
106,734 |
| Class “D” |
|
841,666,658 |
| Total |
|
2,153,688,011 |
As
of the date of these unaudited condensed consolidated financial statements, all the shares of Telecom Argentina are authorized by the
CNV for public offering.
Class B
Shares are listed and traded on the leading companies’ panel of the BYMA and the ADS representing 5 Class “B”
shares of the Company are traded on the NYSE under the symbol TEO.
TELECOM
ARGENTINA S.A.
| b) | Restrictions
on distribution of profits |
Under
the LGS, the by-laws of the Company and rules and regulations of the CNV, a minimum of 5% of net income for the year in accordance
with the statutory books, plus/less previous years’ adjustments and accumulated losses must be appropriated by resolution of the
shareholders to a legal reserve until such reserve reaches 20% of the outstanding capital (common stock) plus inflation adjustment of
common stock.
NOTE
21 – REVENUES
| |
Three-month
period ended March 31, |
| |
2024 |
2023 |
| Mobile
Services |
278,328 |
339,812 |
| Internet
Services |
168,535 |
182,364 |
| Cable
Television Services |
101,424 |
154,795 |
| Fixed
and Data Services |
95,749 |
95,032 |
| Other
services revenues |
7,836 |
6,769 |
| Subtotal
Services revenues |
651,872 |
778,772 |
| Equipment
revenues |
32,044 |
54,441 |
| Total
Revenues |
683,916 |
833,213 |
NOTE
22 – OPERATING EXPENSES
Operating
expenses disclosed by nature of expense amounted to $710,063 million and $845,198 million for the three-month period ended March 31,
2024 and 2023, respectively. The main components of the operating expenses are the following:
| |
Three-month
period ended March 31, |
| |
2024 |
2023 |
| |
Profit
(loss) |
| Employee
benefit expenses and severance payments |
|
| Salaries,
social security expenses and benefits |
(141,159) |
(187,705) |
| Severance
indemnities |
(13,484) |
(10,085) |
| Other
employee expenses |
(3,181) |
(2,618) |
| |
(157,824) |
(200,408) |
| Fees
for services, maintenance, materials and supplies |
|
|
| Maintenance
and materials |
(53,495) |
(46,924) |
| Fees
for services |
(45,757) |
(49,919) |
| Directors
and Supervisory Committee’s members’ fees |
(785) |
(842) |
| |
(100,037) |
(97,685) |
| Taxes
and fees with the Regulatory Authority |
|
|
| Turnover
tax |
(27,284) |
(30,820) |
| Regulatory
Entity Fees |
(13,687) |
(16,453) |
| Municipal
taxes |
(6,315) |
(8,591) |
| Other
taxes and fees |
(5,414) |
(8,297) |
| |
(52,700) |
(64,161) |
| Cost
of equipment |
|
|
| Inventory
balance at the beginning of the year |
(49,878) |
(32,756) |
| Plus: |
|
|
| Purchases |
(23,501) |
(46,149) |
| Other |
2,375 |
4,275 |
| Less: |
|
|
| Inventory
balance at the end of the period |
47,147 |
35,967 |
| |
(23,857) |
(38,663) |
| Other
operating expenses |
|
|
| Legal
Claims and contingent liabilities |
(1,846) |
(5,275) |
| Rental
and internet capacity |
(4,862) |
(4,837) |
| Energy,
water and other services |
(14,025) |
(16,543) |
| Postage,
freight and travel expenses |
(4,138) |
(5,508) |
| Other |
(2,422) |
(1,457) |
| |
(27,293) |
(33,620) |
| Depreciation,
amortization and impairment of Fixed Assets |
|
|
| Depreciation
of PP&E |
(177,941) |
(205,796) |
| Amortization
of intangible assets |
(20,873) |
(33,299) |
| Amortization
of rights of use assets |
(34,386) |
(24,118) |
| Impairment
of Fixed Assets |
(81) |
(1,065) |
| |
(233,281) |
(264,278) |
TELECOM
ARGENTINA S.A.
Operating
expenses, disclosed per function are as follows:
Concept |
Operating
costs |
Administration
costs |
Commercialization
costs |
Other
expenses |
Total
03.31.2024 |
Total
03.31.2023 |
| Employee
benefit expenses and severance payments |
(83,022) |
(35,354) |
(39,448) |
- |
(157,824) |
(200,408) |
| Interconnection
costs and transmission costs |
(25,088) |
- |
- |
- |
(25,088) |
(24,855) |
| Fees
for services, maintenance, materials and supplies |
(36,373) |
(19,608) |
(44,056) |
- |
(100,037) |
(97,685) |
| Taxes
and fees with the Regulatory Authority |
(52,094) |
(365) |
(241) |
- |
(52,700) |
(64,161) |
| Commissions
and advertising |
- |
- |
(35,507) |
- |
(35,507) |
(48,550) |
| Cost
of equipment and handsets |
(23,857) |
- |
- |
- |
(23,857) |
(38,663) |
| Programming
and content costs |
(37,456) |
- |
- |
- |
(37,456) |
(47,770) |
| Bad
debt expenses |
- |
- |
(17,020) |
- |
(17,020) |
(25,208) |
| Other
operating expenses |
(17,795) |
(4,891) |
(4,607) |
- |
(27,293) |
(33,620) |
| Depreciation,
amortization and impairment of Fixed Assets |
(184,044) |
(32,396) |
(16,760) |
(81) |
(233,281) |
(264,278) |
| Total
as of 03.31.2024 |
(459,729) |
(92,614) |
(157,639) |
(81) |
(710,063) |
|
| Total
as of 03.31.2023 |
(552,320) |
(102,657) |
(189,156) |
(1,065) |
|
(845,198) |
NOTE 23
– FINANCIAL RESULTS
| |
Three-month
period ended March 31, |
| |
2024 |
2023 |
| |
Profit
(loss) |
| Interests
on borrowings (*) |
(26,368) |
(26,833) |
| Remeasurement
in borrowings (**) |
(29,511) |
10,981 |
| Foreign
currency exchange gains on borrowings (***) |
853,723 |
51,644 |
| Borrowings
renegotiation results |
- |
(1,210) |
| Total
financial cost |
797,844 |
34,582 |
| Fair
value gains/(losses) on financial assets at fair value through profit or loss |
(23,767) |
(11,047) |
| Other
foreign currency exchange gains (losses) |
97,655 |
(3,157) |
| Other
interests, net |
5,536 |
4,976 |
| Other
taxes and bank expenses |
(15,621) |
(8,064) |
| Financial
expenses on pension benefits |
(714) |
(1,043) |
| Financial
discounts on assets, debts and others |
(269) |
(3,227) |
| RECPAM |
52,700 |
62,129 |
| Total
other financial results, net |
115,520 |
40,567 |
| Total
financial results, net |
913,364 |
75,149 |
(*)
Includes $659 million and $217 million corresponding to net income and losses generated by DFI in the three-month period ended March 31,
2024 and 2023, respectively.
(**)
Related to Notes issued in UVA.
(***)
Includes $(1,916) million corresponding to net losses generated by DFI in the three-month period ended March 31, 2023.
NOTE 24
- BALANCES AND TRANSACTIONS WITH COMPANIES UNDER SECTION 33 - LAW No. 19,550 AND RELATED PARTIES
CVH
is the controlling company of Telecom Argentina, holding 28.16% of the capital stock of the Company. Additionally, both VLG (company
subsequently absorbed by CVH) and Fintech, contributed to the Voting Trust, in accordance with the Shareholders´ Agreement, shares
representing 10.92% of the capital of the Company so the shares subject to such agreement represent 21.84% of the total capital of the
Company (the “Shares in Trust”).
According
to the Voting Trust Agreement, the trustee appointed by CVH must vote the Shares in Trust as instructed or voted by CVH with respect
to all issues except in respect of certain matters subject to veto under the Shareholders’ Agreement.
| b) | Balances
with Companies under section 33 - Law No. 19,550 and Related Parties |
| · | Companies
under section 33 - Law No. 19,550 – Associates and joint ventures |
| CURRENT
ASSETS |
|
March 31, |
December 31, |
| Trade
receivables |
|
2024 |
2023 |
| Ver
TV |
Associate |
15 |
15 |
| OPH |
Joint
venture |
23 |
41 |
| |
|
38 |
56 |
| Other
receivables |
|
|
|
| La
Capital Cable |
Associate |
317 |
318 |
| Ver
TV |
Associate |
2 |
3 |
| |
|
319 |
321 |
TELECOM
ARGENTINA S.A.
| CURRENT
LIABILITIES |
|
March 31, |
December 31, |
| Trade
payables |
|
2024 |
2023 |
| La
Capital Cable |
Associate |
5 |
5 |
| TSMA |
Associate |
- |
2 |
| OPH |
Joint
venture |
997 |
1,624 |
| |
|
1,002 |
1,631 |
| Other
liabilities |
|
|
|
| OPH |
Joint
venture |
2,559 |
3,575 |
| |
|
2,559 |
3,575 |
| NON
- CURRENT LIABILITIES |
|
|
|
| Other
liabilities |
|
|
|
| OPH |
Joint
venture |
4,485 |
6,267 |
| |
|
4,485 |
6,267 |
| CURRENT
ASSETS |
|
March 31, |
December 31, |
| Trade
receivables |
|
2024 |
2023 |
| Other
related parties |
|
1,503 |
995 |
| |
|
1,503 |
995 |
| Other
receivables |
|
|
|
| Other
related parties |
|
3 |
7 |
| |
|
3 |
7 |
| CURRENT
LIABILITIES |
|
|
|
| Trade
payables |
|
|
|
| Other
related parties |
|
6,910 |
6,954 |
| |
|
6,910 |
6,954 |
| c) | Transactions
with companies under section 33 - Law No. 19,550 and related parties |
| · | Companies
under section 33 - Law No. 19,550– Associates and joint ventures |
| |
Transaction |
Kind
of related
party |
Three-month
period
ended
March 31, |
| |
|
|
2024 |
2023 |
| |
|
|
Profit
(loss) |
| |
|
|
Revenues |
| La
Capital Cable |
Services
revenues and other revenues |
Associate |
23 |
- |
| Ver
TV |
Services
revenues and other revenues |
Associate |
17 |
12 |
| OPH |
Services
revenues and other revenues |
Joint
venture |
66 |
- |
| |
|
|
106 |
12 |
| |
|
|
|
|
| |
|
|
Operating
costs |
| La
Capital Cable |
Fees
for services |
Associate |
(181) |
(877) |
| |
|
|
(181) |
(877) |
| |
Transaction |
Three-month
period
ended
March 31, |
| |
|
2024 |
2023 |
| |
|
Profit
(loss) |
| |
|
Revenues |
| Other
related parties |
Services
and advertising revenues |
1,068 |
655 |
| |
|
1,068 |
655 |
| |
|
|
|
| |
|
Operating
costs |
| Other
related parties |
Programming
costs |
(5,777) |
(7,067) |
| Other
related parties |
Editing
and distribution of magazines |
(832) |
(1,253) |
| Other
related parties |
Advisory
services |
(836) |
(1,152) |
| Other
related parties |
Advertising
purchases |
(137) |
(427) |
| Other
related parties |
Other
purchases and commissions |
(756) |
(322) |
| |
|
(8,338) |
(10,221) |
The
transactions discussed above were made by Telecom Argentina under the same conditions than would have been obtained from unaffiliated
third parties. When Telecom Argentina’s transactions represented more than 1% of its total shareholders’ equity, they were
approved according to Law No. 26,831, the Bylaws and the Executive Committees’ Faculties and Performance Regulation.
TELECOM
ARGENTINA S.A.
NOTE 25
– RECENT DEVELOPMENTS CORRESPONDING TO THE THREE-MONTH PERIOD ENDED MARCH 31, 2024
| a) | Decree
No. 690/20 - Amendment to the LAD |
In
relation to the situation described in Note 2.c).i) in the consolidated financial statements as of December 31, 2023, on February 20,
2024 the precautionary measure, which suspended the application of the Decree No. 690/20, was extended for an additional period
of six months, remaining in force until August 20, 2024. Consequently, the precautionary measure is fully in force as of the issuance
date of these unaudited condensed consolidated financial statements.
Finally,
through Decree No. 302/24 published in the Official Gazette on April 9, 2024, the PEN derogated the aforementioned Decree No. 690/20.
As of the date of issuance of these unaudited condensed consolidated financial statements, the Company is analyzing the effects of the
derogation of the Decree.
NOTE
26 – SUBSEQUENT EVENTS TO MARCH 31, 2024
| 1) | Provisions
of the Telecom Ordinary and Extraordinary Shareholders’ meeting |
At
the Ordinary and Extraordinary Shareholders’ Meeting held on April 25, 2024, the shareholders of Telecom decided, among other:
| (i) | To
approve the Board of Directors’ proposal stated in current currency as of March 31,
2024 using the National Consumer Price Index pursuant to CNV Resolution No. 777/18 in
connection with the Accumulated Deficit as of December 31, 2023 for $257,730 million
($390,775 million in current currency as of March 31, 2024): (i) absorb the amount
of $257,730 million ($390,775 million in current currency as of March 31, 2024) from
the “Voluntary reserve to maintain the Company's level of capital expenditures and
its current solvency level”; |
| (ii) | to
reclassify the amount of $84.257 million ($127,752 million in current currency as of March 31,
2024) from “Voluntary reserve to maintain the Company's level of capital expenditures
and its current solvency level” and to be charged against the “Contributed Surplus”; |
| (iii) | to
delegate on the Board of Directors the power to reverse between October 1, 2024 and
December 31, 2024 the “Voluntary reserve to maintain the Company's level of capital
expenditures and its current solvency level” in an amount that allows distribution
of dividends in cash or in kind or any combination of both options, for up to the maximum
amount of distribution of US$ 100 million, once the conditions detailed in Note 13.c) to
the consolidated financial statements as of December 31, 2023 are met or waived. |
| |
|
Carlos
Moltini |
| |
|
|
| |
|
Chairman
of the Board of Directors |
OPERATING
AND FINANCIAL REVIEW AND PROSPECTS AS OF MARCH 31, 2024
(In
millions of Argentine pesos in current currency or as expressly indicated)
As
provided under Resolution No. 777 issued by the CNV on December 28, 2018, this operating and financial review and prospects
discloses the comparative balances, restated to current currency as of March 31, 2024.
The
table below shows the evolution of the National CPI with the characteristics identified in Note 1.d) to the unaudited condensed consolidated
financial statements, for the last year and as of March 31, 2024 and 2023 according to official statistics (INDEC) and the Banco
Nación U.S. dollar exchange rate used for the preparation of this operating and financial review and prospects:
| |
As
of March 31,
2023 |
As
of December 31,
2023 |
As
of March 31,
2024 |
| |
|
|
|
| National
CPI (December 2016=100) |
1,381.16 |
3,533.19 |
5,357.09 |
| |
|
|
|
| Variation
in prices |
|
|
|
| Annual
|
104.3% |
211.4% |
287.9% |
| Accumulated
3 months |
21.7% |
n/a |
51.6% |
| |
|
|
|
| Banco
Nación US$/$ exchange rate |
209.01 |
808.45 |
858 |
| |
|
|
|
| Variation
in the exchange rate |
|
|
|
| Annual |
88.3% |
356.3% |
310.5% |
| Accumulated
3 months |
18.0% |
n/a |
6.1% |
| 2. | Telecom’s
activities for the three-month period ended March 31, 2024 (“3M24”) and
2023 (“3M23”) |
| |
|
|
|
|
|
| |
3M24 |
|
3M23 |
|
Variation |
| |
|
|
$ |
|
% |
| Revenues |
683,916 |
|
833,213 |
|
(149,297) |
|
(17.9) |
| Employee
benefit expenses and severance payments |
(157,824) |
|
(200,408) |
|
42,584 |
|
(21.2) |
| Interconnection
and transmission costs |
(25,088) |
|
(24,855) |
|
(233) |
|
0.9 |
| Fees
for services, maintenance, materials and supplies |
(100,037) |
|
(97,685) |
|
(2,352) |
|
2.4 |
| Taxes
and fees with the Regulatory Authority |
(52,700) |
|
(64,161) |
|
11,461 |
|
(17.9) |
| Commissions
and advertising |
(35,507) |
|
(48,550) |
|
13,043 |
|
(26.9) |
| Cost
of equipment and handsets |
(23,857) |
|
(38,663) |
|
14,806 |
|
(38.3) |
| Programming
and content costs |
(37,456) |
|
(47,770) |
|
10,314 |
|
(21.6) |
| Bad
debt expenses |
(17,020) |
|
(25,208) |
|
8,188 |
|
(32.5) |
| Other
operating expenses |
(27,293) |
|
(33,620) |
|
6,327 |
|
(18.8) |
| Depreciation,
amortization and impairment of Fixed Assets |
(233,281) |
|
(264,278) |
|
30,997 |
|
(11.7) |
| Operating
loss |
(26,147) |
|
(11,985) |
|
(14,162) |
|
118.2 |
| Earnings
(losses) from associates and joint ventures |
(1,359) |
|
1,648 |
|
(3,007) |
|
n/a |
| Financial
costs |
797,844 |
|
34,582 |
|
763,262 |
|
n/a |
| Other
financial results, net |
115,520 |
|
40,567 |
|
74,953 |
|
184.8 |
| Income
before income tax |
885,858 |
|
64,812 |
|
821,046 |
|
n/a |
| Income
tax benefit (expense) |
(210,826) |
|
45,665 |
|
(256,491) |
|
n/a |
| Net
income for the period |
675,032 |
|
110,477 |
|
564,555 |
|
n/a |
| |
|
|
|
|
|
|
|
| Net
income attributable to: |
|
|
|
|
|
|
|
| Controlling
Company |
672,260 |
|
107,669 |
|
564,591 |
|
n/a |
| Non-controlling
interest |
2,772 |
|
2,808 |
|
(36) |
|
(1.3) |
| |
675,032 |
|
110,477 |
|
564,555 |
|
n/a |
| |
|
|
|
|
|
|
|
| Earnings
per share for income attributable to the Controlling Company - Basic and diluted |
312.14 |
|
49.99 |
|
|
|
|
| |
|
|
|
|
|
|
|
| Adjusted
EBITDA(1) |
207,134 |
|
252,293 |
|
(45,159) |
|
(17.9) |
| (1) | Adjusted
EBITDA is a non-GAAP measure, defined as our net (loss) income less income tax benefit (expense),
financial results, earnings (losses) from associates and joint ventures, depreciation, amortization
and impairment of Fixed Assets. For further information on the use of adjusted EBITDA, see
“Adjusted EBITDA”. |
In
3M24, net income amounted to $675,032 million (compared to an income of $110,477 million in 3M23), representing 98.7% of revenues (compared
to 13.3% in 3M23). The increase in 3M24 compared to 3M23 was mainly due to a higher financial results, net gains for $838,215 million
which were partially offset by a decrease in income tax benefit (expense) of $256,491 million.
In
3M24, Adjusted EBITDA totaled $207,134 million, representing 30.3% of revenues in both periods. The decrease of $45,159 million in 3M24
compared to 3M23 was mainly due to a decrease in revenues of $149,297 million, partially
offset by the decrease in operating cost (without depreciation, amortization and impairment of Fixed Assets) of $104,138 million.
| |
|
|
Variation |
| |
3M24 |
3M23 |
$ |
% |
| Mobile
Services |
278,328 |
339,812 |
(61,484) |
(18.1) |
| Internet
Services |
168,535 |
182,364 |
(13,829) |
(7.6) |
| Cable
Television Services |
101,424 |
154,795 |
(53,371) |
(34.5) |
| Fixed
and Data Services |
95,749 |
95,032 |
717 |
0.8 |
| Other
services revenues |
7,836 |
6,769 |
1,067 |
15.8 |
| Subtotal
Services revenues |
651,872 |
778,772 |
(126,900) |
(16.3) |
| Equipment
revenues |
32,044 |
54,441 |
(22,397) |
(41.1) |
| Total
Revenues |
683,916 |
833,213 |
(149,297) |
(17.9) |
During
3M24 revenues decreased 17.9% or $149,297 million compared to 3M23, amounting to $683,916 million.
Albeit
the greater demand for services, revenues decreased mainly due to the fact that, as a consequence of the 287.9% annual inflation in Argentina,
the Company (and other competitors in the ICT industry) was unable to increase its prices during 3M24 to the same extent as the increase
in inflation.
Revenues
include $68,571 million and $632,905 million in 3M24 and 3M23, respectively, related to the effect generated by the restatement in current
currency as of March 31, 2024.
Mobile
Services
Mobile
services revenues in 3M24 amounted to $278,328 million (a decrease of $61,484 million or 18.1% as compared to 3M23), being the principal
contributor to our total services revenues for 3M24 (42.7% of services revenues in 3M24 as compared to 43.6% in 3M23). Mobile internet
services revenues remained stable in 3M24 and 3M23 and accounted for 92% of total mobile service revenues in both quarters.
The
effect generated by the restatement in current currency as of March 31, 2024 included in Mobile services revenues amounted to $28,053
million and $258,294 million in 3M24 and 3M23, respectively.
Mobile
services revenues in Argentina amounted to $248,513 million (a decrease of $66,084 million or 21% as compared to 3M23). This decrease
was mainly due to 23.6% decrease in the ARPU, partially offset by a 3.3% increase in the number of customers.
The
ARPU amounted to $3,872.0 as of March 31, 2024 (compared to $5,071.0 as of March 31, 2023). This decrease was mainly explained
by the fact that, as a consequence of the annual 287.9% inflation in Argentina, the Company (and other competitors in the ICT industry)
was unable to increase its prices during 3M24 to the same extent as the increase in inflation (the effect generated by the restatement
in current currency as of March 31, 2024 included in ARPU amounted to $381.7 and $3,844.2 as of March 31, 2024 and 2023, respectively).
Additionally, the decrease in ARPU is also explained by the fact that we granted greater discounts to customers in order to maintain
the customer base, considering the intense competition in the market and an increase in the migration of customers from postpaid to prepaid
services (which have a lower ARPU than postpaid customers).
Our
mobile customers in Argentina amounted to 21.2 million and 20.5 million as of March 31, 2024 and 2023, respectively. Out of the
total mobile customers as of March 31, 2024, 61% were prepaid customers and 39% were postpaid customers, whereas as of March 31,
2023, 58% were prepaid customers and 42% were postpaid customers. During 2023 and 2024, we observed a change in customer behavior, resulting
in an increase in prepaid services customers of 8.7% and a decrease in the postpaid services customers of 4.2%. Additionally, the average
churn rate per month amounted to 1.5% in 3M24 (compared to a 1.7% average in 3M23).
Mobile
services revenues generated in Paraguay amounted to $29,815 million in 3M24 (a $4,600 million or 18.2% increase compared to 3M23). The
increase was mainly due to the appreciation of the Guaraní against the Argentine Peso.
Núcleo’s
ARPU amounted to $4,251.3 as of March 31, 2024 (compared to $3,464.8 as of March 31, 2023), representing a 22.7% increase.
Núcleo’s
customer base remained stable amounting to 2.4 million customers as of March 31, 2024. Out of the total mobile customers as of March 31,
2024, 75% were prepaid customers and 25% were postpaid customers, whereas as of March 31, 2023, 79% were prepaid customers, and
21% were postpaid customers. The average churn rate per month amounted to 2.6% in 3M24 and 3M23, respectively.
Internet
Services
Internet
services revenues amounted to $168,535 million in 3M24, decreasing $13,829 million or 7.6% as compared to 3M23. The effect generated
by the restatement in current currency as of March 31, 2024 included in internet services revenues amounted to $16,558 million and
$138,526 million in 3M24 and 3M23, respectively.
The
decrease in internet services revenues in Argentina in 3M24 was mainly due to the decrease in the Broadband Internet access ARPU of 9.8%.
The
ARPU reached $12,733.2 in 3M24 as compared to $14,122.3 in 3M23. This decrease in ARPU is mainly explained by the fact that, as a consequence
of the [annual] 287.9% inflation in Argentina, the Company (and other competitors in the ICT industry) was unable to increase its prices
during 3M24 to the same extent as the increase in inflation (the effect generated by the restatement in current currency as of March 31,
2024 included in ARPU amounted to $1,184.7 and $10,711.2 as of March 31, 2024 and 2023, respectively).
The
customer base remained stable amounting to 4.1 million customers in both 3M24 and 3M23, which was a product of the Company's efforts
to maintain the customer base, considering the intense competition. The churn rate per month amounted to 1.5% and 1.7% in 3M24 and 3M23,
respectively.
Cable
Television Services
Cable
television service revenues amounted to $101,424 million in 3M24, decreasing $53,371 million or 34.5% as compared to revenues in 3M23.
The effect generated by the restatement in current currency as of March 31, 2024, included in cable television services revenues,
amounted to $10,167 million and $117,526 million in 3M24 and 3M23, respectively.
The
decrease in Cable television service revenues in 3M24 was mainly due to the decrease in ARPU, a 37.5% decrease compared to 3M23, and
a 1.5% decrease in the customer base compared to 3M23.
The
ARPU amounted to $9,041.0 as of March 31, 2024 compared to an ARPU of $14,460.9 as of March 31, 2023. The decreased is mainly
explained since annual inflation as of March 31, 2024 amounted to 287.9%, the Company (and other competitors in the ICT industry)
was unable to increase its prices during 3M24 to the same extent as the increase in inflation (the effect generated by the restatement
in current currency as of March 31, 2024 included in ARPU amounts to $894.0 and $10,971.7 as of March 31, 2024 and 2023, respectively).
In
3M24, the customer base in Argentina amounted to 3.1 million customers, decreasing a 1.5% compared to 3M23. This decrease is mainly due
to the economic situation in Argentina and the changes in customers’ consumption trends. Our Flow digital platform’s customer
base reached 1.5 million and our Premium Package’s customer base amounted to 1.2 million in 3M24, a 7.8% decrease compared to 3M23.
The average churn rate per month amounted to 1.8% in both 3M24 and 3M23.
Fixed
and Data Services
Revenues
generated by fixed and data services amounted to $95,749 million in 3M24, increasing $717 million or 0.8% as compared to 3M23. The effect
generated by the restatement in current currency as of March 31 2024 included in fixed and data services revenues amounted to $9,851
million and $72,201 million in 3M24 and 3M23, respectively.
The
increase in fixed and data services in Argentina in 3M24 was mainly due to the appreciation of data service subscriptions that are denominated
in dollars, partially offset by a decrease in ARPU, decreasing 6.4% as compared to 3M23, and a decrease in the customer base of 4.5%
compared to 3M23.
The
ARPU of fixed telephony services amounted to $5,875.6 as of March 31, 2024 compared to an ARPU of $6,276.9 as of March 31,
2023. The decreased is mainly explained since annual inflation as of March 31, 2024 amounted to 287.9%, the Company (and other competitors
in the ICT industry) was unable to increase its prices during 3M24 to the same extent as the increase in inflation (the effect generated
by the restatement in current currency as of March 31, 2024 included in ARPU amounts to $640.7 and $4,771.7 as of March 31,
2024 and 2023, respectively).
The
customer base of fixed telephony services amounted to 2.8 million in 3M24, decreasing a 4.5% compared to 3M23. The customer base decreased
mainly due to changes in consumption behaviour of customers.
Other
services revenues
Other
services revenues generated by other services amounted to $7,836 million in 3M24, increasing $1,067 million or 15.8% compared to 3M23.
The effect generated by the restatement in current currency as of March 31 2024 included in other services revenues amounted to
$625 million and $5,112 million in 3M24 and 3M23, respectively.
These
services include mainly revenues related to fintech services, revenues from billing remuneration and collection management on behalf
of third parties, administrative revenues and revenues from the sale of advertising space, among others.
The
increase in other services revenue in 3M24 was mainly due to the increase in fintech services in Argentina of $1,839 million as compared
to 3M23, principally due to the growth in the use of the "Personal Pay" digital wallet and the increase in the number of users,
which amounted to 2.5 million and 1.0 million in 3M24 and 3M23, respectively.
Equipment
Equipment
revenues amounted to $32,044 million in 3M24 (a decrease of $22,397 million or 41.1% compared to 3M23). This variation is mainly due
to a 37% decrease in handsets sold compared to 3M23.
The
effect generated by the restatement in current currency as of March 31, 2024 included in Equipment revenues amounts to $3,317 million
and $41,246 million in 3M24 and 3M23, respectively.
An
important operational performance measure used by the Company’s Chief Operating Decision Maker (as this term is defined in IFRS
Accounting Standard 8) is Adjusted EBITDA. Adjusted EBITDA is defined as our net (loss) income less income tax, financial results, Earnings
(losses) from associates and joint ventures, and depreciation, amortization and impairment of Fixed Assets. We believe Adjusted EBITDA
facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations such as capital
structures, taxation and the useful lives and book depreciation and amortization of PP&E and intangible assets, which may vary for
different companies for reasons unrelated to operating performance. Although Adjusted EBITDA is not a measure defined in accordance with
IFRS Accounting Standards (a non-GAAP measure), our Management believes that this measure facilitates operating performance comparisons
from period to period and provides useful information to investors, financial analysts and the public in their evaluation of our operating
performance. Adjusted EBITDA does not have a standardized meaning and, accordingly, our definition of Adjusted EBITDA may not be comparable
to Adjusted EBITDA as used by other companies.
The
following table shows the reconciliation of Net income to Adjusted EBITDA:
| |
|
|
|
|
|
|
|
| |
|
3M24 |
|
3M23 |
|
Variation |
|
| |
|
|
|
|
|
|
|
| |
|
($ million) |
|
$ |
|
% |
|
| Net
income |
|
675,032
|
|
110,477
|
|
564,555
|
|
n/a |
|
| Income
tax (benefit) expense |
|
210,826
|
|
(45,665)
|
|
256,491
|
|
n/a |
|
| Other
financial results, net |
|
(115,520)
|
|
(40,567)
|
|
(74,953)
|
|
184.8 |
|
| Financial
cost |
|
(797,844)
|
|
(34,582)
|
|
(763,262)
|
|
n/a |
|
| (Earnings)
Losses from associates and joint ventures |
|
1,359
|
|
(1,648)
|
|
3,007
|
|
n/a |
|
| Operating
loss |
|
(26,147)
|
|
(11,985)
|
|
(14,162)
|
|
118.2 |
|
| Depreciation,
amortization and impairment of Fixed Assets |
|
233,281
|
|
264,278
|
|
(30,997)
|
|
(11.7) |
|
| Adjusted
EBITDA |
|
207,134
|
|
252,293
|
|
(45,159)
|
|
(17.9) |
|
Adjusted
EBITDA amounted to $207,134 million in 3M24, representing a decrease of $45,159 million or 17.9% as compared to 3M23. Adjusted EBITDA
represented 30.3% of our total consolidated revenues in both 3M24 and 3M23, respectively.
Operating
costs without depreciation, amortization and impairment of Fixed Assets totaled $476,782 million in 3M24, which represents a decrease
of $104,138 million or 17.9% compared to 3M23. These lower costs are mainly associated with the decrease in Employee benefit expenses
and severance payments, Cost of equipment, Commissions and advertising, Taxes and fees with the Regulatory Authority, Programming and
content costs, Bad debt expenses and legal claims and contingent liabilities, partially slightly offset by Fees for services, maintenance,
materials and supplies and Interconnection and transmission costs. The headcount as of 3M24 totaled 21,079 employees.
Despite
being in a context in which annual inflation as of March 31, 2024 amounted to 287.9%, in general costs did not increase to the same
level.
The
effect generated by the restatement in current currency as of March 31, 2024 included in operating cost to $63,137 million and $442,188
million in 3M24 and 3M23, respectively.
Depreciation,
amortization and impairment of Fixed Assets
Depreciation,
amortization and impairment of Fixed Assets amounted to $233,281 million in 3M24, a decrease of $30,997 million or 11.7 % compared to
3M23.
The
variation is due to the effect of those assets that ended their useful life after March 31, 2023, partially offset by the impact
of the amortization of the CAPEX subsequent to that same date.
The
effect generated by the restatement in current currency as of March 31, 2024 included in depreciation, amortization and impairment
of Fixed Assets amounts to $191,019 million and $245,490 million in 3M24 and 3M23, respectively.
Operating
loss amounted to $26,147 million and $11,985 million in 3M24 and 3M23, respectively. Operating loss represented (3.8)% and (1.4)% of
revenues in 3M24 and 3M23, respectively.
| |
|
Variation |
| |
3M24 |
3M23 |
$ |
% |
| Interests
on borrowings |
(26,368) |
(26,833) |
465 |
(1.7) |
| Remeasurement
in borrowings |
(29,511) |
10,981 |
(40,492) |
n/a |
| Foreign
currency exchange gains on borrowings |
853,723 |
51,644 |
802,079 |
n/a |
| Borrowings
renegotiation results |
- |
(1,210) |
1,210 |
n/a |
| Total
financial cost |
797,844 |
34,582 |
763,262 |
n/a |
| Other
foreign currency exchange gains (losses) |
97,655 |
(3,157) |
100,812 |
n/a |
| Fair
value gains/(losses) on financial assets at fair value through profit or loss |
(23,767) |
(11,047) |
(12,720) |
115.1 |
| Other
interests, net |
5,536 |
4,976 |
560 |
11.3 |
| RECPAM
|
52,700 |
62,129 |
(9,429) |
(15.2) |
| Other |
(16,604) |
(12,334) |
(4,270) |
34.6 |
| Total
other financial results, net |
115,520 |
40,567 |
74,953 |
n/a |
| Total
financial results, net |
913,364 |
75,149 |
838,215 |
n/a |
Telecom
incurred in a financial gain, net of $913,364 million in 3M24 (compared to a gain of $75,149 million in 3M23). Financial Results, net
in 3M24 mainly include (i) foreign exchange gains measured in real terms of $951,378 million as a result of the U.S. Dollar appreciating
6.1% against the Argentine Peso compared to a 51.6% inflation (compared to a gain of $48,487 million in 3M23 and 18.0% devaluation of
the Argentine Peso against the U.S. dollar compared to a 21.7% inflation in 3M23) and (ii) interest on borrowings, measured in real
terms, of $26.368 million (compared to $26.833 million in 3M23). These effects are partially offset by (i) losses from remeasurement
in borrowings of $29,511 million (compared to a gain of $10,981 million in 3M23), (ii) fair value losses on financial assets at
fair value through profit or loss of $23,767 million (compared to a loss of $11,047 million in 3M23), (iii) the RECPAM, which amounted
to a gain of $52,700 million (compared to a gain of $62,169 million in 3M23), and (iv) other financial results of $11,068 million
(compared to $8,568 million in 3M23).
| · | Income
tax benefit (expense) |
Telecom’s
income tax includes the following effects: (i) the current tax payable pursuant to tax legislation applicable to Telecom, and (ii) the
effect of applying the deferred tax method on temporary differences arising out of the Company’s asset and liability valuation
according to tax versus financial accounting criteria, including the income tax inflation effect.
Income
tax expense amounted to $210,826 million in 3M24 compared to a benefit of $45,665 million in 3M23. It includes the following effects:
(i) current tax expenses, Telecom’s generated $1,738 million tax expense in 3M24 (compared to an expense of $310 million in
3M23), (ii) regarding the deferred tax in 3M24, Telecom recorded a deferred tax expense of $209,088 million compared to a gain of
$45,975 million in 3M23.
Telecom
Argentina recorded a net income of $675,032 million in 3M24 as compared to a net income of $110,477 million in 3M23 and represents an
98.7% of revenues as compared to 13.3% in 3M23.
Net
income attributable to controlling shareholders amounted to $672,260 million in 3M24 compared to a gain of $107,669 million in 3M23.
| Consolidated financial position analysis |
|
| |
March 31, |
December 31, |
|
| |
2024 |
2023 |
Variation |
| Financial
assets – current |
457,336 |
421,619 |
35,717 |
| Financial
assets – non-current |
271 |
663 |
(392) |
| Total
financial assets |
457,607 |
422,282 |
35,325 |
| |
|
|
|
| Borrowings
– current |
(854,148) |
(854,356) |
208 |
| Borrowings
– non-current |
(1,591,888) |
(2,372,263) |
780,375 |
| Total
borrowings |
(2,446,036) |
(3,226,619) |
780,583 |
| |
|
|
|
| Financial
liabilities, net – current |
(396,812) |
(432,737) |
35,925 |
| Financial
liabilities, net – non-current |
(1,591,617) |
(2,371,600) |
779,983 |
| Total
financial liabilities, net |
(1,988,429) |
(2,804,337) |
815,908 |
The consolidated
financial position, net (that is: Cash and cash equivalents, net of funds to be paid to clients, plus Financial investments and DFI less
Borrowings) is debt and amounted to $1,988,429 million as of March 31, 2024, which represents a decrease of $815,908 million compared
to December 31, 2023.
| · | CAPEX
in PP&E and Intangible Assets and Rights of use assets additions |
CAPEX
and Rights of use assets additions composition 3M24 and 3M23 is as follows:
| |
In
millions of $ |
Variation
|
| |
3M24 |
3M23 |
$ |
% |
| PP&E |
98,191 |
94,403 |
3,788 |
4.0 |
| Intangibles
assets |
6,477 |
4,014 |
2,463 |
61.4 |
| Total
CAPEX |
104,668 |
98,417 |
6,251 |
6.4 |
| Rights
of use assets |
40,804 |
35,506 |
5,298 |
14.9 |
| Total
CAPEX and Right of use asset additions |
145,472 |
133,923 |
11,549 |
8.6 |
The
main CAPEX projects are related to the expansion of cable TV and internet services in order to improve the transmission and speed offered
to customers; the deployment of 4G and the expansion of 5G services to support the growth of mobile Internet services, improvement of
the quality service together with the launch of innovative Value-Added Services.
In
terms of infrastructure, during 2024 we continued to improve the services we provide by deploying the 4G / LTE network, together with
the technological reconversion of our 2G / 3G networks to 4G and LTE, and the deployment of fiber optics to connect homes with Broadband,
which also had an impact on fixed and data network. The deployment of 4G/LTE reached a coverage of 97% of urban population. Additionally,
we reached a coverage of 98% of the population of major cities of Argentina. Our customers with access to our 4G network, according to
the latest benchmark of March 31, 2024 carried out by Ookla, perceive a better service experience reaching average speeds of 38.6
Mbps, compared to 30 Mbps as of March 31,2023. On the other hand, approximately 68% of the calls are made by Volte, a technology
that allows making and receiving voice calls over the 4G Network with substantial improvements in audio and video quality. During 2024
we continued with the expansion of our 5G network and are planning to reach 200 sites in 2024.
Additionally,
we continued to deploy the mobile sites connectivity in order to achieve better quality and capacity, replacing radio links with high
capacity fiber optics connections. Finally, the plan to connect remote and low-density areas through satellite backhaul continued.
| 3. | Summary
of comparative consolidated statements of financial position |
| |
March 31, |
| |
2024 |
2023 |
2022 |
2021 |
2020 |
| Current
assets |
770,327 |
679,178 |
685,935 |
873,958 |
1,129,048 |
| Non-current
assets |
7,373,226 |
7,501,645 |
9,136,125 |
9,638,559 |
9,842,818 |
| Total
assets |
8,143,553 |
8,180,823 |
9,822,060 |
10,512,517 |
10,971,866 |
| Current
liabilities |
1,533,735 |
1,395,991 |
1,484,767 |
1,462,790 |
1,611,026 |
| Non-current
liabilities |
2,633,962 |
2,841,273 |
3,104,768 |
3,539,845 |
3,480,147 |
| Total
liabilities |
4,167,697 |
4,237,264 |
4,589,535 |
5,002,635 |
5,091,173 |
| Equity
attributable to the Controlling Company |
3,885,937 |
3,864,686 |
5,154,846 |
5,417,383 |
5,793,329 |
| Equity
attributable non-controlling interest |
89,919 |
78,873 |
77,679 |
92,499 |
87,364 |
| Total
Equity |
3,975,856 |
3,943,559 |
5,232,525 |
5,509,882 |
5,880,693 |
| Total
liabilities and equity |
8,143,553 |
8,180,823 |
9,822,060 |
10,512,517 |
10,971,866 |
| 4. | Summary
of comparative consolidated income statements |
| |
3M24 |
3M23 |
3M22 |
3M21 |
3M20 |
| Revenues
|
683,916 |
833,213 |
930,060 |
1,014,561 |
1,100,369 |
| Operating
costs |
(710,063) |
(845,198) |
(920,099) |
(948,348) |
(999,283) |
| Operating
income (loss) |
(26,147) |
(11,985) |
9,961 |
66,213 |
101,086 |
| Earnings
(losses) from associates and joint ventures |
(1,359) |
1,648 |
950 |
1,005 |
1,610 |
| Financial
results, net |
913,364 |
75,149 |
177,023 |
83,217 |
(26,720) |
| Income
before income tax |
885,858 |
64,812 |
187,934 |
150,435 |
75,976 |
| Income
tax benefit (expense) |
(210,826) |
45,665 |
221 |
(39,675) |
(29,684) |
| Net
income |
675,032 |
110,477 |
188,155 |
110,760 |
46,292 |
| Other
comprehensive income (loss), net of tax |
(103,739) |
(3,483) |
(13,029) |
664 |
(21,705) |
| Total
comprehensive income |
571,293 |
106,994 |
175,126 |
111,424 |
24,587 |
| Attributable
to Controlling Company |
598,958 |
104,663 |
176,279 |
107,766 |
27,337 |
| Attributable
to non-controlling interest |
(27,665) |
2,331 |
(1,153) |
3,658 |
(2,750) |
| 5. | Summary
of comparative consolidated statements of cash flow |
| |
3M24 |
3M23 |
3M22 |
3M21 |
3M20 |
| Net
cash flows from operating activities |
171,229 |
206,118 |
291,235 |
338,672 |
282,784 |
| Net
cash flows used in investing activities |
(224,218) |
(237,682) |
(299,800) |
(169,852) |
(202,825) |
| Net
cash flows from (used in) financing activities |
27,656 |
9,735 |
7,354 |
(32,189) |
55,000 |
| Net
foreign exchange differences and RECPAM on cash and cash equivalents |
(66,315) |
(5,950) |
(10,942) |
(4,969) |
(1,245) |
| Total
cash and cash equivalents (used in) from the period |
(91,648) |
(27,779) |
(12,153) |
131,662 |
133,714 |
| 6. | Statistical
data (in physical units in index-term) |
| |
03.31.24 |
03.31.23 |
03.31.22 |
03.31.21 |
03.31.20 |
| Mobile
telephony services lines |
23.5 |
22.8 |
22.4 |
21.0 |
21.0 |
| Internet
Access |
4.1 |
4.1 |
4.2 |
4.2 |
4.1 |
| Cable
TV customers |
3.3 |
3.4 |
3.5 |
3.5 |
3.5 |
| Fixed
telephony services lines (included IP) |
3.1 |
3.2 |
3.3 |
3.4 |
3.3 |
| |
03.31.24 |
03.31.23 |
03.31.22 |
03.31.21 |
03.31.20 |
| Liquidity
(1) |
0.50 |
0.49 |
0.46 |
0.60 |
0.70 |
| Solvency
(2) |
0.95 |
0.93 |
1.14 |
1.10 |
1.16 |
| Locked-up
capital (3) |
0.91 |
0.92 |
0.93 |
0.92 |
0.90 |
| 1) | Current
assets/Current liabilities. |
| 2) | Total
equity/Total liabilities. |
| 3) | Non-current
assets/Total assets. |
Telecom
is part of a key industry for Argentina’s economic development and its regional and global projection, with a major role in creating
value not only for the different verticals of the Industry 4.0 but also in people's everyday lives, and in generating the talent required
for the evolution of society.
We
began a new year with a change in political leadership in the National Government, amidst a complex socio-economic environment where
both macro and micro-economic variables showed an unfavorable scenario, directly impacting the Company's revenues.
We
believe that there will be a trend towards inflation deceleration and stability in the exchange rate, as well as regularization in the
conditions for the purchase of technological equipment.
Despite
the challenging context in which we operate, we continue to uphold our commitment to our customers to offer the best comprehensive ecosystem
of digital services, connectivity, and entertainment, pillars upon which the digital lives of individuals and organizations rely. To
bolster the economic sustainability of the business, we are concentrating our efforts on achieving an optimal balance between the necessary
adjustment of our product list prices, maintaining a scheme of commercial promotions, and adapting to the demands of high competition
that characterize this market.
This
commitment is also reflected in our sustained dedication to fulfilling investment plans in systems and infrastructure, which enable the
development of new digital services, which we believe are essential for the evolution of our customer base and the digital development
of the country.
In
addition, the availability of a dedicated spectrum for 5G technology resulting from the bidding process that took place in October 2023,
increases opportunities to expand and enhance new services, particularly those associated with B2B industry sectors.
We
are prepared to embrace the exponential technological change brought by 5G, which will serve as the cornerstone for the digital transformation
of industries and a competitive factor for the economy. Beyond offering a new connectivity experience for individuals and households,
5G is positioned as a major enabler of innovation and technology-based developments.
While
the adoption of this technology is not yet widespread, we are supporting the deployment of 5G networks to meet the demand in areas where
a higher concentration of compatible devices is identified, thus prioritizing the experience of these customers.
We
seek to continue to expand infrastructure and build new 5G sites, adjusting the planning of these deployments, taking into account the
intensive dollarized investments required by this new ecosystem.
With
the commitment to connecting Argentinians and offering them state-of-the-art digital services, we continue to analyze the evolution of
international markets in search of financing opportunities that align with our strategy, and access the local capital market and/or obtain
bank loans from local entities to continue driving our investment plan.
From
a regulatory perspective, on April 10, 2024, through Decree No. 302/24, the National Government repealed Decree No. 690/20,
enacted in August 2020, which had declared ICT Services as essential public services and limited, among other things, free competition
and the freedom to set prices. The repeal of the Decree reduces the uncertainty that the ICT Services industry has been experiencing
in recent years. This first measure of the National Government towards the ICT industry generates positive expectations regarding the
demands that the sector has been making, and keeps us attentive to the regulatory developments of this new stage in Argentina.
On
the other hand, Telecom continues to analyze opportunities for regional positioning as leaders in digital services and in its evolution
towards becoming a technology company, focusing on the development of innovative services that expand the footprint of our platform ecosystem.
Our
digital transformation facilitates the evolution of the Company's operational model, incorporating technological enablers that bring
innovation, such as automation processes, artificial intelligence, cloudification, and big data management, to continue scaling the digitalization
of operations efficiently and swiftly. These enablers drive us to expand our footprint in new businesses supported by the digital economy,
based on IoT solutions, fintech, cybersecurity, entertainment, and smart home.
In
line with its purpose, the Company we seek to continue to drive the growth of the digital economy, expand talent, and accompany the evolution
of various variables such as energy efficiency, which are pillars of sustainable management. Along this path, we continue to build the
future and be the leading choice of our customers.
| |
Carlos
Moltini |
| |
|
| |
Chairman
of the Board of Directors |
CORPORATE
INFORMATION
| · | INDEPENDENT
AUDITORS Price Waterhouse & Co S.R.L. (member of PricewaterhouseCoopers) |
BYMA
| |
Market
quotation ($/share) |
Volume
of shares |
| Quarter |
High |
Low |
traded
(in millions) |
| 1Q23 |
499.50 |
332.25 |
8.4 |
| 2Q23 |
687.45 |
390.73 |
7.0 |
| 3Q23 |
959.80 |
621.60 |
11.9 |
| 4Q23 |
1,752.45 |
773.30 |
10.6 |
| 1Q24 |
2,073.15 |
1,333.80 |
8.5 |
NYSE*
| |
Market
quotation (US$/ADR) |
Volume
of ADRs |
| Quarter |
High |
Low |
traded
(in millions) |
| 1Q23 |
6.70 |
4.24 |
8.2 |
| 2Q23 |
6.72 |
4.71 |
6.5 |
| 3Q23 |
6.43 |
4.79 |
8.0 |
| 4Q23 |
8.64 |
4.60 |
11.0 |
| 1Q24 |
7.97 |
6.53 |
8.7 |
* Calculated at 1 ADR = 5 shares
| · | INVESTOR RELATIONS for information
about Telecom Argentina S.A., please contact: |
| In Argentina |
| Telecom Argentina S.A. |
| Investor Relations Division |
| General Hornos 690 |
| (1272) Autonomous City of Buenos Aires |
| Argentina |
| https://inversores.telecom.com.ar/ar/es/contacto.html |
| Outside Argentina |
| JPMorgan Chase Bank N.A. |
| 383 Madison Avenue, Floor 11. |
|
New York, NY10179
Attn: Depositary Receipts Group
Tel: +1 212 622 5935 |
| · | INTERNET http://institucional.telecom.com.ar/inversores/ |
| · | DEPOSIT AND TRANSFER AGENT FOR ADSs |
| JPMorgan Chase Bank N.A. |
| 383 Madison Avenue, Floor 11 |
| New York, NY10179 |
|
Attn: Depositary Receipts Group
adr@jpmorgan.com –
www.adr.com |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
Telecom
Argentina S.A.
|
| Date: |
May 20, 2024 |
By: |
/s/ Luis Fernando Rial
Ubago |
| |
|
|
Name: |
Luis Fernando Rial Ubago |
| |
|
|
Title: |
Responsible for Market Relations |
Telecom Argentina (NYSE:TEO)
Historical Stock Chart
From May 2024 to Jun 2024
Telecom Argentina (NYSE:TEO)
Historical Stock Chart
From Jun 2023 to Jun 2024
