Yahoo Finance América Móvil, S.A.B. de C.V. (NYSE:AMX) Q1 2024 Earnings Call Transcript
América Móvil, S.A.B. de C.V. (NYSE:AMX) Q1 2024 Earnings Call Transcript April 17, 2024
América Móvil, S.A.B. de C.V. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning. My name is Candice and I will be your conference operator today. At this time I'd like to welcome everyone to the América Móvil First Quarter 2024 Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and answer-session. [Operator Instructions] Thank you. I would now like to turn the conference call over to Ms. Daniela Lecuona, Head of Investor Relations.
Daniela Lecuona : Thank you so much. Good morning everyone. We're very excited to have you today on the line discussing our financial and operating results for the quarter. We have Mr. Daniel Hajj, our CEO, Mr. Carlos Garcia Moreno, CFO, and Mr. Oscar Von Hauske, COO.
Daniel Hajj Aboumrad : Good morning. Welcome to the América Móvil First Quarter Financial and Operating Report. And Carlos is going to make a summary of the report. Carlos.
Carlos Garcia Moreno : Thank you, Daniel. Good morning, everyone. Thanks for being in the call. Well, the strong rally in interest rates took place in the latter part of 2023, came to an end in the first quarter. Strong employment readings and other indications of a still vibrant economy, kept pushing back the timing of expected reductions by the Fed of its discount rate and cutting back the expected number of such reductions to be had this year. The Mexican peso, which had depreciated slightly versus the Dollar at the beginning of the year, rubbed off the interest rate increases and resumed its appreciating trend gaining ground versus the dollar and all other currencies in our region of operations. In the first quarter, we added 1.5 million wireless subscribers of which 1.3 million were postpaid clients, including Brazil with 555,000, Austria with 260,000, Colombia with 126,000, and Mexico with 105,000.
On our prepaid platform, we gained 263,000 subscribers in the period. Colombia added 378,000, followed by Argentina with 226,000, and Brazil with 146,000. On the other hand, we disconnected 584,000 subscribers in Central America, mostly on account of a cybersecurity incident that affected our ability to activate clients. On the fixed-line segment, we connected 562,000 new broadband accesses, the best performance in four years. Mexico was the main contributor with 325,000 clients, followed by Brazil with 92,000 and Columbia with 23,000. Our postpaid base increased 6.4% year-on-year, while fixed broadband accesses were up 4.8%. We continue to lose PayTV clients and fixed post lines and this has been a secular trend for quite some time. Our first quarter revenue totaled MXN203 billion pesos, with service revenue expanding 1.1% to MXN171 billion, and other revenue declining 71.7% to MXN2.4 billion.
The latter figure reflects extraordinary revenue in the first quarter of 2023 on account of the sale of towers by Dominican Republic and Peru, this quarter there were practically no tower sales. At constant exchange rates service revenue increased 5%, up from 3.7% the precedent quarter. We saw an acceleration of service revenue growth on both the fixed-line and the mobile platforms, as you can see in the slide, which improved sequentially from 3% to 5.1% on the fixed-line side and from 4.2% to 4.9% on the mobile-line side. So an acceleration in revenue growth on both fixed and mobile, which means an acceleration of service revenue growth in [América Móvil] (ph). In most of our main markets, including Mexico and Brazil, service revenue growth exceeded inflation for the period, with Austria and Colombia being the principal markets where revenue did not increase in real terms.
Mexico was the main driver behind the fixed-line revenue expansion, which went from 5.9% in the precedent quarter to 9.7% in the current period, the fastest rate of growth in years. It was followed by Peru, where the revenue growth rate nearly doubled sequentially from 4.4% to 8%. Brazil reported a 1% increase, its best showing in seven years, as the headwinds from PayTV of the last five years gave way to solid broadband revenue growth. Within the fixed-line platform, corporate network revenue, which represents 21% of fixed-line service revenue, was the most dynamic business line, planning 13.5% year-on-year, followed by broadband services that were up 6.4%. On the mobile platform, Mexico, Brazil, and Peru, were the countries where revenue growth picked up the most sequentially, going from 4.5% to 5.8% in Mexico, from 7.1% to 8.5% in Brazil, and from 2.6% to 4.9% in Peru.
Colombia returned to positive mobile revenue growth after two quarters of declines. EBITDA came in at MXN80.6 billion. It was 2.6% lower than the year before on account of the extraordinary tower sales for the first quarter mentioned before, which affected the annual comparison. At constant exchange rates and adjusting for the tower sales EBITDA increased 7.5% year-on-year, its fastest pace in eight quarters, buoyed by strong subscriber and revenue growth on both platforms and consistent control over costs and expenses. Our operating income reached MXN4.8 billion, a 7.6% decline from the year before, correcting for the tower sales, it was up 2.5% in Mexican peso terms and 13% at constant exchange rates. Our comprehensive financing cost totaled MXN13 billion in the first quarter.
They were close to 0 a year before on the back of strong foreign exchange gains that had amounted to MXN13.7 billion then. This year we instead -- booked MXN1.7 billion in foreign exchange losses. We raised a net profit in the amount of MXN13.5 billion that was equivalent to 22 peso cents per share and 25 dollars cents per ADR. The difference vis-a-vis the year -- earlier quarter, is mostly explained by the aforementioned tower sales and the difference in the foreign exchange gains/losses. In cash flow terms, we obtained net financing in the amount of MXN17 billion -- MXN17.4 billion, which helped us fund our capital expenditures of MXN21.8 billion and covered MXN4.8 billion in share buybacks and MXN6.5 billion pesos in labor obligations. In the first part of every year, we have mentioned several times, we face working capital requirements that need to be financed.
And on top of it, in March we have to pay [duties] (ph) on the usage of spectrum and several telecom related taxes in various countries. And these taxes, duties are paid for the most part in March. This was an important [amount] (ph) that we don't see every quarter, which in this particular quarter add up to nearly MXN13 billion. So every year we have to make this payment -- every year it's in March. And this year, it amounted to nearly MXN13 billion. Our share buybacks in the first quarter, which was MXN4.8 billion I mentioned before, were 2.5 times greater than those of the year earlier quarter and 9% greater than those of the first quarter of 2022. In fact, this quarter we acquired 3 times more shares than the quarter of last year than the year before.
And in terms of leverage, as you can see in the slide, it's been very flat. We've been -- for over a year practically flat at 1.5 times. Net debt to EBITDA, we expect that we will remain within the range that we have mentioned, which is 1.3 times and 1.5 times net debt to EBITDA. So with that I will pass the floor back to Daniel for Q&A. Thank you, Daniel.
Daniel Hajj Aboumrad : Thank you, Carlos. We can start with the Q&A.
See also 12 Most Shorted Stocks in 2024 and
12 Best Diversified Stocks To Invest In.
To continue reading the Q&A session, please click here.
