Business Context and Reporting Period
Company: América Móvil, S.A.B. de C.V.
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Year ended December 31, 2012 (Unaudited Preliminary)
Filing Date: February 20, 2013
América Móvil is the largest provider of wireless communications services in Latin America, operating in 18 countries. The company provides mobile voice, fixed voice, mobile data, fixed data, and paid television services. A significant development in 2012 was the full consolidation of Net Serviços de Comunicação, S.A. ("Net Serviços"), a Brazilian pay TV provider, beginning January 1, 2012, which impacts year-over-year comparability.
Key Financial Metrics (Year Ended Dec 31, 2012)
| Metric | 2012 (MXN Billions) | 2012 (USD Millions) | 2011 (MXN Billions) |
|---|---|---|---|
| Total Operating Revenues | 775.1 | 59,574 | 690.0 |
| Operating Income | 157.3 | 12,091 | 154.8 |
| Net Profit | 92.1 | 7,082 | 88.1 |
| Net Profit Attributable to Parent | 91.4 | 7,028 | 82.9 |
| Total Assets | 1,002.6 | 77,061 | 945.6 |
| Total Liabilities | 690.2 | 53,055 | 650.0 |
| Long-term Debt | 404.0 | 31,057 | 354.0 |
| Cash and Cash Equivalents | 45.5 | 3,497 | 59.1 |
| Net Debt | 372.2 | 28,609 | 321.5 |
Note: USD figures are for convenience only, using the exchange rate of Ps.13.0101 to U.S.$1.00 as of December 31, 2012.
Material Changes vs. Prior Period
- Revenue Growth: Total operating revenues increased 12.3% (Ps.85.1 billion) to Ps.775.1 billion. At constant exchange rates and excluding Net Serviços consolidation, revenue grew 6.9%.
- Segment Performance:
- Mobile Data: Increased 33.5% (Ps.34.2 billion) driven by SMS, web browsing, and content downloads.
- Paid Television: More than tripled due to the consolidation of Net Serviços.
- Fixed Voice: Decreased 11.1% due to lower long-distance traffic and interconnection rates.
- Profitability: Operating income increased 1.6% to Ps.157.3 billion. However, operating margin declined to 20.3% from 22.4% in 2011, attributed to higher subscriber acquisition costs and content charges.
- Net Profit: Increased 4.6% to Ps.92.1 billion, aided by a Ps.7.4 billion net exchange gain (vs. a Ps.22.4 billion loss in 2011) due to the appreciation of the Mexican peso.
- Debt: Net debt increased to Ps.372.2 billion from Ps.321.5 billion, partly due to financing for acquisitions of shares in KPN and Telekom Austria AG.
Guidance, Outlook, and Risks
- Recent Developments: The company intends to participate in KPN's €3 billion rights issue and has entered a relationship agreement granting the right to designate two individuals to KPN's supervisory board.
- Capital Allocation: In 2012, the company spent Ps.130.9 billion on capital expenditures (including 4G/LTE deployment), Ps.14.6 billion on dividends, and Ps.18.3 billion on share repurchases.
- Forward-Looking Statements: The filing contains projections regarding operating revenues, net income, and capital expenditures. Management cautions that actual results may differ due to economic conditions, regulatory developments, exchange rates, and competition.
- Accounting Change: Beginning January 1, 2012, commissions paid to distributors are presented as gross commission expense rather than a reduction in revenues. This change was retroactively applied to 2011 data for comparability in this report.
Key Facts for Investor Verification
- Unaudited Status: The 2012 financial data is unaudited preliminary information; final audited statements may differ materially.
- Consolidation Impact: The inclusion of Net Serviços (Brazil Pay TV) significantly alters revenue and cost structures compared to 2011; investors should review constant currency and organic growth metrics.
- Currency Exposure: Results are heavily influenced by the Mexican peso's appreciation against the U.S. dollar and Brazilian real, which generated a significant exchange gain in 2012.
- Debt Maturity: As of Dec 31, 2012, Ps.266.3 billion of long-term debt is due in 2018 and thereafter, while Ps.25.0 billion is due in 2014.
- Subscriber Growth: Total wireless subscribers grew to 261.6 million (from 241.8 million in 2011), with significant growth in Brazil and the U.S. (TracFone).