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: First Quarter 2022 (Ended March 31, 2022)
Key Context: Consolidated figures exclude TracFone, which was sold in November 2021 and is reported as a discontinued operation. Argentina results are presented in constant pesos per IAS 29 due to hyperinflation.
Key Financial Metrics
| Metric | 1Q 2022 | 1Q 2021 | YoY Change |
|---|---|---|---|
| Total Revenue | MxP 211.2 Billion | MxP 206.3 Billion | +2.4% |
| Service Revenue | MxP 177.3 Billion | MxP 171.6 Billion | +3.3% |
| EBITDA | MxP 81.1 Billion | MxP 77.9 Billion | +4.2% |
| EBITDA Margin | 38.4% | 37.8% | +60 bps |
| Operating Profit (EBIT) | MxP 39.8 Billion | MxP 37.5 Billion | +6.1% |
| Net Income | MxP 30.8 Billion | MxP 1.8 Billion | n.m. |
| Net Debt (excl. leases) | MxP 425 Billion | MxP 407.6 Billion | +4.3% |
| Net Debt / EBITDAaL | 1.33x | n/a | - |
| Free Cash Flow | MxP -12.8 Billion | MxP 17.4 Billion | Turned Negative |
Note: Net Income surge driven by MxP 22.6 billion in foreign exchange gains.
Material Changes vs. Prior Period
- Subscriber Growth: Added 3.2 million net wireless subscribers (1.9M postpaid, 1.3M prepaid). Postpaid base grew 8.4% YoY to 110 million. Broadband accesses grew 2.3% YoY to 30.7 million.
- Revenue Mix: Mobile service revenue grew 6.3% YoY (constant currency), driven by Brazil (+10.3%), Peru (+9.7%), and Mexico (+9.5%). Fixed-line service revenue declined 1.1% YoY due to voice revenue contraction (-5.8%).
- Profitability: EBITDA margin expanded to 38.4% from 37.8%. Operating profit rose 6.1%.
- Cash Flow: Free Cash Flow turned negative (-MxP 12.8B) compared to positive MxP 17.4B in 1Q21, attributed to seasonal working capital requirements and capital expenditures of MxP 28.6B.
- Shareholder Returns: Distributions (dividends and buybacks) more than doubled to MxP 9.2 billion.
Outlook, Commentary, and Risks
- Management Commentary: Strong mobile growth in Brazil, Mexico, and Peru offset declines in fixed-line voice and PayTV. The company highlighted successful 5G launches in Mexico (18 cities) and the Dominican Republic.
- Strategic Moves:
- Completed acquisition of certain Oi assets in Brazil for R$3.6 billion.
- Approved a share buyback fund increase of MxP 26 billion for the 2022-2023 period.
- Declared an ordinary dividend of MxP 0.44 per share.
- Obtained financing (MxP 20.6B loan and $1B bond) to be transferred to Sitios Latinoamérica prior to its expected spin-off in Q3 2022.
- Risks and Contingencies:
- Argentina: High inflation impacts reporting; service revenue declined 1.2% in constant pesos as price increases lagged inflation.
- Chile: EBITDA fell 19.1% YoY due to intense competition and declining service revenues (-5.6%).
- Peru: EBITDA declined 6.2% due to reduced equipment margins and higher bad debt provisions.
- Macro: Rising global interest rates and currency fluctuations (Mexican peso appreciated vs. USD/Euro but depreciated vs. Brazilian Real).
Investor Verification Checklist
- FX Impact: Verify the sustainability of Net Income given the MxP 22.6 billion foreign exchange gain, which was a primary driver of the bottom line.
- Argentina Inflation: Review the constant peso adjustments for Argentina to understand real operational performance versus nominal reporting.
- Chile Performance: Investigate the 19% EBITDA decline and negative EBIT in Chile to assess competitive pressures.
- Cash Flow Seasonality: Confirm if the negative Free Cash Flow is strictly seasonal (working capital) or indicative of higher structural Capex needs.
- TracFone Exclusion: Ensure comparisons with prior years account for the discontinued operation of TracFone to avoid misleading growth metrics.