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 2024 (Ended March 31, 2024)
Filing Date: April 19, 2024
América Móvil is a leading telecommunications provider operating across Latin America and Europe. The company reported financial and operating results for Q1 2024, highlighting subscriber growth in wireless and fixed-line segments, though results were impacted by a cybersecurity incident in Central America and the absence of one-time tower sale revenues recorded in the prior year.
Key Financial Metrics
| Metric | Q1 2024 | Q1 2023 | YoY Change |
|---|---|---|---|
| Total Revenue (MXN Billion) | 203.3 | 208.9 | -2.7% |
| Service Revenue (MXN Billion) | 170.9 | 169.1 | +1.1% |
| EBITDA (MXN Billion) | 80.6 | 82.7 | -2.6% |
| EBITDA Margin | 39.6% | 39.6% | 0.0 pp |
| Operating Profit (EBIT) (MXN Billion) | 40.8 | 44.1 | -7.6% |
| Net Income (MXN Billion) | 13.5 | 30.1 | -55.2% |
| Earnings Per Share (MXN) | 0.22 | 0.48 | -54.2% |
| Net Debt (MXN Billion, excl. leases) | 392.5 | 385.4 (Dec '23) | +1.8% |
| Net Debt/EBITDAaL Ratio | 1.5x | N/A | - |
Note: Net Income decline is primarily driven by the absence of foreign exchange gains recorded in Q1 2023 and the lack of one-time tower sale revenues.
Material Changes vs. Prior Period
- Subscriber Growth: Added 1.5 million wireless subscribers (1.3 million postpaid). Fixed-line broadband accesses grew by 562,000, the best performance in four years.
- Revenue Dynamics: Service revenue grew 1.1% in nominal pesos but 5.0% at constant exchange rates. The decline in total revenue compared to Q1 2023 is largely due to the absence of extraordinary revenue from tower sales in the Dominican Republic and Peru recorded in the prior year.
- Profitability: Adjusted EBITDA (excluding tower sales) increased 7.5% year-over-year at constant exchange rates, the fastest pace in eight quarters. Operating profit increased 13.0% at constant exchange rates when adjusted for tower sales.
- Financing Costs: Comprehensive financing costs rose to 13.7 billion pesos (from near zero in Q1 2023) due to the absence of 13.7 billion pesos in foreign exchange gains recorded in the prior year and the booking of 1.7 billion pesos in FX losses.
- Central America Incident: A ransomware attack in January 2024 affected system activation capabilities, resulting in the disconnection of 584,000 prepaid subscribers in the region.
Guidance, Outlook, and Risks
- Capital Allocation: The Board proposed an ordinary dividend of MXN 0.48 per share and allocated 15 billion pesos to a share buyback fund for the period April 2024 to April 2025.
- Debt Issuance: Issued a 17.5 billion peso five-year global note in March 2024. Total notes issued under the program since June 2023 now total 54.5 billion pesos.
- Strategic Exits: The EUR 2.1 billion bond exchangeable into KPN shares matured in March 2024; the company ceased to be a shareholder in KPN.
- Risks and Contingencies:
- Cybersecurity: Ongoing restoration of systems in Central America following the ransomware event; potential impact on future subscriber acquisition in the region.
- Argentina Inflation: Financial results for Argentina are presented in constant peso terms per IAS 29 due to hyperinflation. Mobile service revenue in Argentina declined 13.7% in constant terms as price increases lagged inflation.
- Currency Volatility: The Mexican peso appreciated significantly against the USD and other regional currencies, impacting reported revenue in nominal terms.
Key Facts for Investor Verification
- Adjusted Performance: Verify the "Adjusted EBITDA" and "Constant Exchange Rate" figures, as nominal results are distorted by one-time tower sales in 2023 and significant FX fluctuations.
- Central America Impact: Assess the long-term financial impact of the 584,000 prepaid subscriber disconnections in Central America due to the cybersecurity incident.
- Argentina Exposure: Review the specific inflation-adjusted metrics for Argentina, where mobile revenue is contracting in real terms despite subscriber growth.
- Debt Profile: Confirm the net debt-to-EBITDAaL ratio of 1.5x and the composition of the new 17.5 billion peso bond issuance.
- Shareholder Returns: Verify the execution of the proposed 15 billion peso share buyback program and the dividend payment schedule.