Business Context and Reporting Period
Company: América Móvil, S.A.B. de C.V.
Filing Type: Form 6-K (Report of a Foreign Private Issuer)
Reporting Period: Year ended December 31, 2023 (Preliminary Unaudited)
Filing Date: March 21, 2024
América Móvil is the leading telecommunications service provider in Latin America, operating in 23 countries or territories. The company provides wireless, fixed-line, broadband, and Pay TV services. As of December 31, 2023, the company reported 310.1 million wireless subscriptions and 73.7 million fixed Revenue Generating Units (RGUs). The financial data presented is preliminary and unaudited, subject to change upon completion of the independent audit.
Key Financial Metrics
| Metric | 2022 (Audited) | 2023 (Preliminary) | Change |
|---|---|---|---|
| Operating Revenues | Ps. 844,501 million | Ps. 816,013 million | (3.4%) |
| Operating Income | Ps. 170,871 million | Ps. 167,784 million | (1.8%) |
| Operating Margin | 20.3% | 20.6% | +0.3 pp |
| Net Profit (Continuing Ops) | Ps. 88,225 million | Ps. 80,790 million | (8.4%) |
| Net Profit (Total) | Ps. 81,506 million | Ps. 80,790 million | (0.9%) |
| Net Debt | Ps. 381.5 billion | Ps. 385.4 billion | +1.0% |
| Cash & Equivalents | Not explicitly stated | Ps. 26.6 billion | N/A |
Note: All figures in Mexican Pesos (Ps.) unless otherwise noted. 2023 USD equivalents provided in filing are for convenience only (e.g., Net Profit ~$4.78 billion USD).
Material Changes vs. Prior Period
- Revenue Decline: Total operating revenues decreased 3.4% year-over-year. However, at constant exchange rates, revenues increased 5.1%, driven by growth in mobile services and fixed broadband, offset by declines in fixed voice and Pay TV.
- Profitability: Net profit from continuing operations fell 8.4% to Ps. 80.8 billion. This was primarily due to a decrease in net foreign currency exchange gains and a Ps. 12.3 billion impairment charge related to the ClaroVTR joint venture in Chile.
- Cost Management: Operating costs decreased 3.6% in reported pesos but increased 4.8% at constant exchange rates due to inflationary pressures, higher energy costs, and network maintenance expenses.
- Discontinued Operations: Operations in Panama (sold July 2022) and Chile (converted to joint venture October 2022) are classified as discontinued operations. The 2022 net profit included a loss of Ps. 6.7 billion from discontinued operations, whereas 2023 had none.
- Segment Performance:
- Mexico Wireless: Revenues up 5.2%; Operating Income up 10.6%.
- Mexico Fixed: Operating Income down 25.4% due to rising maintenance costs and declining voice revenues.
- Colombia: Revenues down 12.0% due to Colombian peso devaluation against the Mexican peso.
- Argentina: Revenues down 8.2% due to hyper-inflationary accounting adjustments and currency devaluation.
Guidance, Outlook, and Risks
Management Commentary: Management highlights a cost savings program that helped offset inflationary pressures. The company continues to invest in capital expenditures (Ps. 156.3 billion in 2023) and repurchased Ps. 14.3 billion of its own shares.
Forward-Looking Risks:
- Currency Volatility: Significant exposure to exchange rate fluctuations, particularly the Argentine peso, Brazilian real, and Colombian peso, which materially impacts reported results in Mexican pesos.
- Regulatory Environment: Risks related to government policies, regulatory developments, and competition in the telecommunications sector.
- Joint Venture Impairment: The company recorded a Ps. 4.7 billion impairment on its investment in ClaroVTR (Chile) as of December 31, 2023.
- Hyper-inflation: Argentina's economic conditions and accounting treatment under IAS 29 create unusual effects on consolidated figures.
Liquidity: Net debt increased slightly to Ps. 385.4 billion. Approximately 71.5% of indebtedness is denominated in currencies other than the Mexican peso. The company has Ps. 186.5 billion in debt and contractual obligations due in 2024.
Investor Verification Checklist
- Audit Status: Confirm that the final audited 2023 financial statements do not materially differ from these preliminary unaudited figures.
- Constant Currency Analysis: Verify the "constant exchange rate" growth metrics (e.g., +5.1% revenue growth) to understand organic performance separate from currency translation effects.
- ClaroVTR Impairment: Review the specific details of the Ps. 12.3 billion impairment and the Ps. 4.7 billion investment impairment related to the Chile joint venture.
- Argentina Exposure: Assess the impact of Argentina's hyper-inflationary accounting and currency devaluation on future consolidated results.
- Debt Maturity: Evaluate the company's ability to service Ps. 186.5 billion in obligations due in 2024 given current cash flow and liquidity positions.