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: Second Quarter 2022 (Ended June 30, 2022)
Announcement Date: July 12, 2022
América Móvil reported financial and operating results for Q2 2022, highlighting the integration of 12.9 million subscribers from the acquisition of Oi in Brazil. The company operates across Latin America and Europe, with significant exposure to currency fluctuations and local inflationary pressures, particularly in Argentina.
Key Financial Metrics
| Metric | Q2 2022 | Q2 2021 | YoY Change |
|---|---|---|---|
| Total Revenue (MxP Billion) | 217.4 | 210.4 | +3.3% |
| Net Service Revenue (MxP Billion) | 180.7 | 173.0 | +4.5% |
| EBITDA (MxP Billion) | 82.7 | 79.5 | +4.0% |
| EBITDA Margin | 38.0% | 37.8% | +0.2 pp |
| Net Income (MxP Billion) | 13.7 | 42.8 | -68.0% |
| Net Debt (MxP Billion) | 414.7 | 407.6 | +1.8% |
| Net Debt / LTM EBITDA | 1.36x | N/A | - |
| Capital Expenditures (MxP Billion) | 65.6 | 57.4 | +14.3% |
| Shareholder Distributions (MxP Billion) | 16.3 | 11.2 | +45.5% |
Note: Net Income decline is primarily due to the absence of discontinued operations (TracFone sale) in Q2 2022 compared to Q2 2021.
Material Changes vs. Prior Period
- Subscriber Growth: Total wireless subscribers reached 306 million, driven by 3.1 million organic net additions (1.8M postpaid, 1.3M prepaid) and the consolidation of Oi. Fixed-line broadband added 186,000 new accesses.
- Revenue Dynamics: Mobile service revenue grew 8.5% at constant exchange rates (CER), while fixed-line service revenue declined 0.5% YoY at CER. Broadband revenue grew 3.3%.
- Profitability: EBITDA grew 4.2% at CER. However, Net Income dropped significantly year-over-year due to the one-time gain from the TracFone sale in the prior year and higher financing costs.
- Financing Costs: Comprehensive financing costs rose to MxP 18.1 billion (from a net benefit in Q2 2021), driven by higher interest rates and foreign exchange losses.
- Regional Performance:
- Brazil: Mobile service revenue +20.1% (including Oi); EBITDA +8.8%.
- Argentina: Revenue fell 7.3% in constant peso terms due to hyperinflation; EBITDA margin expanded to 40.2%.
- Chile: Revenue declined 3.7% and EBITDA dropped 17.4% due to intense competition.
- Eastern Europe: Strongest performer with EBITDA growth of 10.3%.
Guidance, Outlook, and Risks
- Outlook: Management anticipates a reduction in working capital requirements in the second half of the year due to seasonality. The company plans to spin off Sitios Latinoamérica in Q3, transferring approximately MxP 55 billion in debt obligations.
- Strategic Initiatives: Continued 5G rollout (40 cities in Mexico, 250+ in Brazil) and fiber expansion. Share buybacks of MxP 16.3 billion were executed in Q2.
- Risks and Contingencies:
- Macroeconomic: High inflation in Argentina and currency volatility across Latin America impact reported results.
- Interest Rates: Rising global interest rates have increased financing costs and foreign exchange losses.
- Competition: Intense competition in Chile and Colombia has pressured ARPU and margins.
- Regulatory/Political: Demonstrations in Ecuador impacted commercial operations in June.
Investor Verification Checklist
- TracFone Impact: Verify the exclusion of TracFone discontinued operations when comparing Q2 2022 Net Income to prior periods.
- Argentina Inflation: Confirm that Argentina figures are adjusted for inflation (IAS 29) and excluded from constant exchange rate comparisons.
- Oi Integration: Assess the organic growth rate in Brazil excluding the 12.9 million Oi subscribers to gauge underlying performance.
- Debt Structure: Review the upcoming spin-off of Sitios Latinoamérica and the transfer of MxP 55 billion in debt.
- Currency Exposure: Monitor the impact of the strengthening US Dollar against local currencies (Peso, Real, Euro) on consolidated revenue and financing costs.