Business Context and Reporting Period
Company: América Móvil, S.A.B. de C.V. (NYSE: AMX, AMOV; BMV: AMX)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Fourth Quarter 2023 (ended December 31, 2023)
Filing Date: February 16, 2024
América Móvil reported financial and operating results for Q4 2023. The company operates across Latin America and Europe, with significant exposure to currency fluctuations, particularly the Mexican peso, Brazilian real, and the hyperinflationary Argentine peso. The company presented consolidated results both including and excluding Argentina to provide clarity on operational performance versus accounting impacts from currency devaluation.
Key Financial Metrics
| Metric (Q4 2023) | Value (Excluding Argentina) | Value (Including Argentina) | YoY Change (Excl. Argentina) |
|---|---|---|---|
| Total Revenue | MXN 204.4 billion | MXN 200.7 billion | -2.5% |
| Service Revenue | MXN 167.6 billion | MXN 164.7 billion | -0.1% (Nominal) / +3.7% (Constant FX) |
| EBITDA | MXN 79.7 billion | MXN 78.3 billion | -3.3% (Nominal) / +4.6% (Adj. Constant FX) |
| EBITDA Margin | 39.0% | 39.0% | -30 bps |
| Operating Profit (EBIT) | MXN 42.3 billion | MXN 41.8 billion | -6.2% |
| Net Income | MXN 26.4 billion | MXN 18.1 billion | +67.8% (Excl. Argentina) |
| Earnings Per Share (Mex$) | 0.29 | 0.29 | +31.8% (vs 0.22 in 4Q22) |
| Net Debt (Excl. Leases) | MXN 385.4 billion | MXN 385.4 billion | +3.9 billion (Full Year Increase) |
Cash Flow & Liquidity: Operating cash flow plus MXN 21.1 billion in net borrowings covered capital expenditures of MXN 156.3 billion, shareholder distributions of MXN 40.4 billion (including MXN 14.3 billion in buybacks), and labor obligations of MXN 11.8 billion.
Material Changes vs. Prior Period
- Subscriber Growth: Added 3.9 million wireless subscribers (2.7 million postpaid). Postpaid base grew 7.0% YoY to 122 million. Fixed-line broadband accesses grew 4.1% YoY to 32 million.
- Revenue Dynamics: Nominal revenue declined 2.5% due to the appreciation of the Mexican peso against regional currencies. At constant exchange rates, service revenue grew 3.7%.
- Argentina Impact: The inclusion of Argentina significantly reduced reported Net Income (from MXN 26.4B to MXN 18.1B) and Revenue due to the ~60% devaluation of the Argentine peso in December 2023 and IAS 29 hyperinflationary accounting rules. Excluding Argentina, Net Income rose 67.8% YoY.
- EBITDA Performance: Nominal EBITDA fell 3.3%, but adjusted for extraordinary items (tower sales in 2022) and constant exchange rates, it rose 4.6%.
- Regional Highlights:
- Brazil: Added 1.8 million postpaid subscribers; mobile service revenue +7.1% YoY.
- Mexico: Added 109k postpaid subscribers; service revenue +4.9% YoY.
- Central America: Mobile service revenue growth accelerated to 10.7% YoY.
- Colombia: Fixed-line service revenue accelerated to 5.9% YoY.
Guidance, Outlook, and Risks
- Debt Issuance: On February 1, 2024, the company issued a 10-year Sustainable Global Note of MXN 20.0 billion with a 10.3% coupon, the largest single-tranche issue for a Mexican corporate to date.
- Strategic Transactions:
- Telekom Austria: Increased stake to 58.4% as of December 31, 2023.
- ClaroVTR (Chile): Formalized financing arrangements with Liberty Latin America; partners must contribute matching amounts by July 31, 2024, or the 50:50 joint venture structure may cease.
- Risks & Contingencies:
- Currency Volatility: Significant exposure to exchange rate fluctuations, particularly the Argentine peso devaluation which created a MXN 3.7 billion negative impact on Q4 revenue and MXN 1.4 billion on EBITDA.
- Interest Rates: The quarter experienced extreme volatility in global interest rates, impacting financing costs.
- Argentina Operations: Continued economic instability and hyperinflation in Argentina pose risks to revenue recognition and cost management (dollar-denominated costs).
Investor Verification Checklist
- Argentina Accounting Treatment: Verify the specific impact of IAS 29 and IAS 21 on the consolidated income statement, noting the divergence between "Excluding Argentina" operational performance and "Including Argentina" reported GAAP figures.
- Constant Exchange Rate Growth: Confirm organic growth rates by reviewing the "constant exchange rate" metrics, as nominal peso figures are distorted by currency appreciation.
- Extraordinary Items: Review adjustments for tower sales (Mexico, Peru, Dominican Republic) and provision releases (Puerto Rico, Ecuador) to understand true operational EBITDA trends.
- ClaroVTR Financing: Monitor the July 31, 2024 deadline for the ClaroVTR joint venture financing arrangement to assess potential changes in the Chilean business structure.
- Debt Maturity & Costs: Analyze the impact of the new MXN 20 billion note issuance on future interest expense and liquidity.