Business Context and Reporting Period
Company: América Móvil, S.A.B. de C.V. (NYSE: AMX, AMOV)
Filing Type: Form 6-K (Report of a Foreign Private Issuer)
Reporting Period: Third Quarter 2021 (Ended September 30, 2021)
Date of Filing: October 22, 2021
América Móvil is a leading telecommunications provider in Latin America and Europe. The filing details financial and operating results for Q3 2021, highlighting subscriber growth, revenue performance at constant exchange rates, and significant corporate actions including a tower spin-off and a joint venture in Chile.
Key Financial Metrics
| Metric | Q3 2021 | Q3 2020 | YoY Change (Nominal) | YoY Change (Constant FX) |
|---|---|---|---|---|
| Total Revenue | MxP 253.4 Billion | MxP 260.2 Billion | -2.6% | N/A |
| Service Revenue | MxP 211.5 Billion | MxP 216.1 Billion | -2.1% | +4.5% |
| EBITDA | MxP 87.6 Billion | MxP 86.5 Billion | +1.3% | +7.5% |
| EBITDA Margin | 34.6% | 33.2% | +1.4 pp | N/A |
| Operating Profit (EBIT) | MxP 47.2 Billion | MxP 45.1 Billion | +4.7% | +10.4% |
| Net Income | MxP 15.8 Billion | MxP 18.9 Billion | -16.4% | N/A |
| Earnings Per Share (Mex$) | 0.24 | 0.28 | -14.3% | N/A |
| Net Debt (Excl. Leases) | MxP 487.6 Billion | MxP 537.8 Billion (Dec '20) | -9.3% | N/A |
| Net Debt / LTM EBITDAaL | 1.55x | N/A | N/A | N/A |
Material Changes vs. Prior Period
- Subscriber Growth: Added 4.2 million wireless subscribers (2.2 million postpaid) and 57,000 fixed-line RGUs. Total wireless base reached 301.9 million (+7.6% YoY).
- Revenue Dynamics: While nominal revenue declined 2.6% due to the appreciation of the Mexican peso, service revenue grew 4.5% at constant exchange rates. Mobile service revenue rose 5.9% (constant FX), driven by Mexico and Brazil (+9% each).
- Profitability: EBITDA margin expanded to 34.6%, the highest in nine years, driven by revenue expansion and cost control. Operating profit increased 10.4% at constant exchange rates.
- Net Income Decline: Net profit fell 16.4% to MxP 15.8 billion, primarily impacted by a MxP 11.6 billion foreign exchange loss due to USD appreciation and higher comprehensive financing costs (+11.9%).
- Capital Allocation: In the first nine months of 2021, the company reduced net debt by MxP 37.6 billion, paid MxP 37.4 billion in shareholder distributions, and spent MxP 22.4 billion on share buybacks.
Guidance, Outlook, and Material Events
Corporate Actions and Strategy
- Latam Tower Spin-off: Shareholders approved the spin-off of approximately 36,000 telecommunications towers into Sitios Latinoamérica, S.A.B. de C.V.
- Chile Joint Venture: Announced a 50:50 joint venture with Liberty Latin America to combine VTR and Claro Chile operations, expected to close in H2 2022.
- Claro Panama Sale: Agreed to sell 100% interest in Claro Panama to Cable & Wireless Panama for US$200 million (cash/debt free).
- Investor Day: Held first Investor Day in four years on October 5, 2021, in New York City.
Risks and Contingencies
- Foreign Exchange: Significant volatility in the USD/MXN rate impacted net income and financing costs. Argentina's results are presented under IAS29 (hyperinflationary accounting).
- Supply Chain: Global supply shortages affected handset availability, particularly in the US and mid-to-low price ranges.
- Regulatory: Transactions (Chile JV, Panama sale) are subject to governmental and regulatory approvals.
Investor Verification Checklist
- Constant FX vs. Nominal: Verify the divergence between nominal peso declines and constant exchange rate growth to understand the true operational performance versus currency headwinds.
- Argentina Accounting: Confirm understanding of IAS29 inflationary accounting adjustments for Argentina, which are excluded from consolidated constant FX comparisons.
- Foreign Exchange Impact: Review the MxP 11.6 billion FX loss and its specific impact on the bottom line versus operating cash flow.
- Transaction Timelines: Monitor the closing conditions and regulatory approval status for the Chile JV and Panama sale.
- Debt Reduction: Validate the sustainability of the net debt reduction (1.55x EBITDA) amidst ongoing capital expenditure requirements for 5G and fiber expansion.