AMX

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: First Quarter 2025 (Ended March 31, 2025)
Announcement Date: April 30, 2025

América Móvil reported financial and operating results for Q1 2025. The company operates across Latin America, the Caribbean, and Europe (Austria & Eastern Europe). Results are presented in Mexican Pesos (MXN) unless otherwise noted. Argentina figures are adjusted for inflation per IAS 29.

Key Financial Metrics

Cash Flow & Capital Allocation: Net financing of MXN 10.9 billion combined with operating cash flow funded MXN 24.7 billion in CapEx, MXN 3.8 billion in share buybacks, and MXN 7.0 billion in labor obligations.

Material Changes vs. Prior Period

• Subscriber Growth: Added 2.4 million postpaid subscribers (Brazil: +987k, Colombia: +163k, Mexico: +133k). Conversely, prepaid segment saw 1.0 million net disconnections, primarily in Mexico and Brazil.
• Fixed-Line Expansion: Connected 446,000 new broadband accesses (Mexico: +165k, Brazil: +98k, Central America: +52k).
• Revenue Drivers: Service revenue grew 15.8% in MXN terms. At constant exchange rates, service revenue grew 6.1% and Adjusted EBITDA 4.0%. Currency appreciation (Colombian, Chilean, Brazilian) contributed significantly to reported MXN growth.
• Profitability: Net income surged 38.6% driven by higher operating profit and a slight decrease in comprehensive financing costs. Depreciation and amortization rose 16.1%, partly due to the incorporation of Chilean operations.
• Regional Highlights:
  • Argentina: Service revenue +32.9% and EBITDA +35.3% (in constant peso terms) due to economic recovery and declining inflation.
  • Central America: Service revenue +15.3% and EBITDA margin expanded to 47.1%, recovering from a Q1 2024 cybersecurity incident.
  • Mexico: Service revenue flat (+1.0%) due to economic slowdown affecting prepaid ARPU (-2.2%), though broadband revenue grew 6.9%.

Guidance, Outlook, and Risks

• Capital Allocation: Board proposed an ordinary dividend of MXN 0.52 per share (payable in two installments) and an additional MXN 10 billion allocation to the share-buyback fund for the period April 2025–April 2026.
• Market Conditions: Management noted U.S. 10-year Treasury yields fell 60 basis points during the quarter. Most regional currencies appreciated vs. the USD, except the Mexican peso, which remained flat due to tariff uncertainty.
• Operational Risks:
  • Mexico: Economic deceleration continues to pressure prepaid revenue and ARPU.
  • Puerto Rico: Revenue declined 4.1% as government subsidies are phased out.
  • Argentina: Financials are subject to hyperinflation accounting (IAS 29); comparisons exclude Argentina for constant currency consistency.

Investor Verification Checklist

• Constant Currency Impact: Verify the distinction between reported MXN growth (14.1%) and constant currency growth (6.1% service revenue) to assess organic performance vs. FX tailwinds.
• Prepaid Churn: Investigate the 1.0 million prepaid disconnections in Mexico and Brazil to understand the depth of the economic slowdown impact on lower-tier segments.
• Argentina Inflation Adjustment: Confirm the methodology for Argentina's constant peso figures, as this region showed the highest growth rates (+33% service revenue).
• Debt Structure: Review the composition of the MXN 500 billion net debt, noting the mix of peso-denominated vs. foreign currency debt and lease obligations.
• CapEx Efficiency: Assess the return on the MXN 24.7 billion CapEx spend, particularly regarding 5G rollout and broadband expansion in key markets.