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: Three months ended March 31, 2023 (Q1 2023)
Filing Date: June 6, 2023
América Móvil is a leading telecommunications provider in Latin America, operating in 22 countries/territories plus a joint venture in Chile. The company reported 301 million wireless subscribers and 73.4 million fixed revenue generating units (RGUs) as of March 31, 2023. The report includes unaudited condensed consolidated financial information prepared under IFRS.
Key Financial Metrics (Q1 2023)
| Metric | Q1 2023 (MXN Millions) | Q1 2023 (USD Millions) |
|---|---|---|
| Operating Revenues | 208,926 | 11,539 |
| Operating Income | 44,125 | 2,437 |
| Operating Margin | 21.1% | - |
| Net Profit (Continuing Ops) | 31,239 | 1,725 |
| Net Debt | 365,100 | - |
| Capital Expenditures | 29,200 | - |
Note: USD figures are for convenience only, translated at an exchange rate of Ps.18.0932 to U.S.$1.00.
Material Changes vs. Prior Period
- Revenue Growth: Total operating revenues increased 1.7% (Ps.3.4 billion) year-over-year. At constant exchange rates, revenue grew 13.8%, driven by growth in prepaid, postpaid, corporate networks, and broadband, offset by declines in Pay TV and fixed voice.
- Profitability: Operating income rose 9.7% to Ps.44.1 billion, with operating margin expanding from 19.6% to 21.1%. Net profit from continuing operations decreased slightly by 2.2% to Ps.31.2 billion, primarily due to lower net foreign exchange earnings compared to Q1 2022.
- Costs: Total operating costs and expenses increased 0.7% (Ps.0.9 billion). At constant exchange rates, costs rose 12.8% due to higher energy costs, content payments, and inflationary pressures, partially offset by cost-saving programs.
- Debt Reduction: Net debt decreased to Ps.365.1 billion as of March 31, 2023, from Ps.418.1 billion in the prior year period.
- Foreign Exchange: Net foreign currency exchange gain was Ps.13.7 billion, down from Ps.22.5 billion in Q1 2022, reflecting currency depreciation against debt denominated in USD, EUR, and GBP.
Guidance, Outlook, and Risks
- Capital Expenditures: Budgeted capital expenditures for 2023 have returned to pre-pandemic levels. Q1 2023 capex was Ps.29.2 billion, primarily funded by operating activities.
- Share Repurchases: The company spent Ps.1.9 billion repurchasing shares in Q1 2023. Future repurchases depend on operating cash flow and market conditions.
- Divestitures: Completed the sale of 4,368 telecommunications towers in the Dominican Republic and Peru to Sitios Latam in early 2023.
- Risks and Contingencies:
- Currency Volatility: Significant exposure to exchange rate fluctuations (USD, EUR, BRL, ARS) impacts reported results.
- Inflation: High inflation rates, particularly in Argentina and Brazil, affect operating costs and wage adjustments.
- Regulatory Environment: Ongoing monitoring of regulatory developments and government policies across operating jurisdictions.
- Discontinued Operations: Operations in Panama and Chile are classified as discontinued operations following sales and joint venture formations in 2022.
Investor Verification Checklist
- Constant Currency Performance: Verify the 13.8% revenue growth at constant exchange rates to isolate operational performance from currency translation effects.
- Argentina Exposure: Review the Southern Cone segment results, where reported revenue and income declined significantly due to adverse economic conditions and currency depreciation in Argentina.
- Debt Maturity Profile: Assess the long-term debt maturity schedule, with Ps.269.9 billion due in 2027 and thereafter.
- Derivative Valuation: Note the net liability of Ps.22.1 billion in derivatives and other financial items as of March 31, 2023.
- Discontinued Operations: Confirm that 2022 comparative figures have been restated to exclude Panama and Chile operations.