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: Fourth Quarter 2020 (ended December 31, 2020)
Filing Date: February 11, 2021
América Móvil is a leading telecommunications provider operating primarily in Latin America and the United States. The filing details financial and operating results for Q4 2020, highlighting subscriber growth, revenue performance, and strategic initiatives including a planned tower spin-off and a major acquisition in Brazil.
Key Financial Metrics
| Metric | Q4 2020 | Q4 2019 | Change (YoY) |
|---|---|---|---|
| Total Revenues | 255.0 billion MXN | 263.1 billion MXN | -3.1% |
| Service Revenues | 206.7 billion MXN | 207.3 billion MXN | -0.3% |
| EBITDA | 82.9 billion MXN | 81.8 billion MXN | +1.3% |
| EBITDA Margin | 32.5% | 31.1% | +1.4 pp |
| Operating Profit (EBIT) | 40.4 billion MXN | 44.3 billion MXN | -8.7% |
| Net Income | 37.3 billion MXN | 20.8 billion MXN | +79.6% |
| Earnings Per Share (MXN) | 0.56 | 0.31 | +80.6% |
| Net Debt | 647.0 billion MXN | 624.3 billion MXN (Total Debt) | 1.93x EBITDA |
Note: Net debt of 647 billion MXN includes capitalized lease obligations. Total financial debt was 628.4 billion MXN.
Material Changes vs. Prior Period
- Subscriber Growth: Added 6.8 million wireless subscribers in Q4 2020, double the additions of the prior quarter. Total wireless base reached 287 million. Postpaid additions were 2.7 million (led by Brazil with ~2 million), and prepaid additions were 4.0 million.
- Fixed Broadband: Added 208,000 new broadband accesses, a 5.4% increase in the installed base.
- Revenue Dynamics: While nominal revenues declined 3.1% due to the appreciation of the Mexican peso against other Latin American currencies (notably the Brazilian Real), service revenues grew 2.2% at constant exchange rates.
- Profitability Surge: Net income jumped 79.6% year-over-year. This was primarily driven by a comprehensive financing income of 15.4 billion MXN, largely due to foreign exchange gains of 36.2 billion MXN as the Mexican peso strengthened against the USD and Euro.
- Debt Reduction: Cash flow allowed for a net debt reduction of 64.9 billion MXN throughout the year, despite significant capital expenditures of 129.6 billion MXN.
Guidance, Outlook, and Strategic Events
- Tower Spin-off: The Board approved a plan to spin off tower assets in Latin America into an independent entity focused on development and co-location. Completion is expected in 2021.
- Brazil Acquisition: Claro (Brazil) accepted an offer to acquire 32% of Oi Group's mobile business for R$16.5 billion (Claro's share is 22%). The deal is subject to regulatory approval and includes approximately 4,700 mobile access sites.
- Regulatory Update (Mexico): The Federal Telecommunications Institute (IFT) issued a resolution on asymmetrical regulations for Telcel and Telmex. The company intends to challenge the resolution in accordance with applicable law.
- Outlook: Management noted that economic recovery was picking up speed in Q4 2020, with confidence levels rising following vaccine announcements. Latin American currencies strengthened notably against the USD during the quarter.
Investor Verification Checklist
- FX Impact: Verify the sustainability of the 79.6% net income increase, which was heavily influenced by one-time foreign exchange gains rather than core operational growth.
- Brazil Deal Closing: Monitor regulatory approvals from Anatel and CADE for the acquisition of Oi Group's mobile assets.
- Tower Spin-off Execution: Track the timeline and valuation of the planned tower asset spin-off in 2021.
- Argentina Inflation: Review the application of IAS 29 (inflationary accounting) for Argentina, which impacts the comparability of local results.
- Regulatory Challenges: Assess the potential financial impact of the IFT resolution challenge in Mexico regarding local loop and dedicated-link leasing rates.