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: Nine months ended September 30, 2023 (Unaudited)
Business Overview: América Móvil is a leading telecommunications provider in Latin America, operating in 22 countries and territories plus a joint venture in Chile. It ranks first in wireless, fixed-line, broadband, and Pay TV services based on revenue-generating units (RGUs). Major operations are in Mexico and Brazil.
Key Financial Metrics
| Metric (Nine Months Ended Sep 30, 2023) | Amount (MXN Millions) | Amount (USD Millions) |
|---|---|---|
| Total Operating Revenues | 615,300 | 34,707 |
| Operating Income | 125,976 | 7,106 |
| Net Profit (Continuing Operations) | 61,663 | 3,478 |
| Net Profit Attributable to Parent | 58,049 | 3,274 |
| Operating Margin | 20.5% | - |
| Total Assets | 1,592,142 | 89,806 |
| Total Debt | 507,044 | 28,601 |
| Net Debt | 389,700 | 21,982 |
| Cash and Cash Equivalents | 28,270 | 1,595 |
Note: USD amounts are translated at the rate of Ps. 17.7287 to U.S.$1.00.
Material Changes vs. Prior Period
- Revenue: Total operating revenues decreased 2.1% (Ps. 13.2 billion) compared to the first nine months of 2022. However, at constant exchange rates, revenues increased 11.6%, driven by growth in prepaid, postpaid, corporate networks, and broadband, offset by declines in Pay TV and fixed voice.
- Profitability: Net profit from continuing operations decreased 3.8% (Ps. 2.4 billion) to Ps. 61.7 billion. Operating income remained relatively flat, decreasing only 0.2%.
- Costs: Total operating costs and expenses decreased 2.6% (Ps. 13.0 billion). At constant exchange rates, costs increased 11.3% due to higher energy costs, network maintenance, and IT expenses.
- Subscriber Growth: Total RGUs increased to 379.6 million (from 374.0 million in 2022). Wireless subscribers grew to 306.2 million, while fixed RGUs remained stable at 73.4 million.
- Discontinued Operations: Results for 2022 were restated to exclude operations in Panama (sold) and Chile (converted to a joint venture).
Guidance, Outlook, and Risks
- Recent Developments: On November 29, 2023, the company increased its stake in Telekom Austria AG to 58%. In December 2023, it entered an agreement to provide additional capital to the ClaroVTR joint venture in Chile.
- Capital Allocation: The company spent Ps. 7.7 billion on share repurchases during the period and Ps. 100.2 billion on capital expenditures, primarily funded by operating cash flows.
- Segment Performance:
- Mexico Wireless: Revenues increased 6.0%; operating margin improved to 32.6%.
- Brazil: Revenues decreased 2.0% (increased 8.3% at constant rates); operating margin improved slightly to 14.9%.
- Colombia: Revenues decreased 18.0% due to currency effects; adjusted revenues increased 1.4%.
- Southern Cone: Revenues decreased 18.1% due to adverse economic conditions in Argentina; adjusted revenues decreased 7.1%.
- Risks and Contingencies:
- Currency Volatility: Significant exposure to exchange rate fluctuations (USD, Euro, Brazilian Real, Argentine Peso) impacts reported results.
- Impairments: Recorded impairments related to the ClaroVTR joint venture (accounts receivable and investment) totaling Ps. 12.9 billion in 2023.
- Regulatory and Economic: Risks include inflation, government policies, and regulatory developments in operating countries.
Investor Verification Checklist
- Constant Currency Growth: Verify the 11.6% revenue growth at constant exchange rates to understand organic performance separate from currency translation effects.
- ClaroVTR Impairments: Review the Ps. 12.9 billion in impairments related to the Chilean joint venture and the terms of the new capital commitment agreement.
- Debt Maturity Profile: Assess the debt maturity schedule, noting Ps. 12.9 billion due in 2024 and Ps. 11.6 billion in 2025.
- Argentina Exposure: Evaluate the impact of hyperinflation and economic instability in the Southern Cone segment on future cash flows.
- Share Repurchases: Confirm the status of the Ps. 20 billion repurchase fund approved in April 2023.