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: Second Quarter 2025 (Ended June 30, 2025)
Business Overview: América Móvil is a leading telecommunications provider operating across Latin America and Europe. The company reported strong growth in postpaid subscribers and service revenue, driven by mobile and fixed-line segments in key markets including Mexico, Brazil, and Colombia. The period was characterized by currency fluctuations, with the U.S. dollar weakening against most regional currencies, and the consolidation of Chilean operations.

Key Financial Metrics

Cash Flow (Jan-Jun 2025): Operating cash flow covered MXN 54.9 billion in capital expenditures, MXN 8.7 billion in share buybacks, and MXN 2.7 billion in labor obligations, resulting in a net debt reduction of MXN 7.3 billion for the half-year.

Material Changes vs. Prior Period

• Subscriber Growth: Added 2.9 million postpaid clients in 2Q25 (Brazil: 1.4M, Colombia: 199k, Mexico: 102k). Prepaid platform saw 1.1 million net disconnections, primarily due to clean-ups in Brazil, Chile, and Honduras, though Colombia and Argentina added prepaid subscribers.
• Revenue Acceleration: Mobile service revenue growth accelerated to 7.0% at constant exchange rates (from 5.7% prior quarter), driven by postpaid growth of 9.5%. Fixed-line corporate networks revenue rose 15.0% and PayTV 10.1%.
• Profitability Turnaround: Net income swung from a loss of MXN 1.1 billion in 2Q24 to a profit of MXN 22.3 billion in 2Q25. This was significantly aided by MXN 11 billion in foreign exchange gains, which reduced comprehensive financing costs by 80.8% year-over-year.
• Depreciation Impact: Operating profit growth (4.0%) lagged revenue growth due to a 24.5% increase in depreciation of rights of use associated with tower lease extensions and the consolidation of Chilean operations.

Guidance, Outlook, and Risks

• Management Commentary: Management highlighted the strongest revenue performance in over a year at constant exchange rates (7.9% increase). They noted broad-based expansion across business lines and countries, with Central America and Eastern Europe showing rapid expansion.
• Capital Allocation: Shareholders approved an additional MXN 10 billion for share buybacks. The company paid an ordinary dividend of MXN 0.52 per share (first installment paid July 14, second due November 10).
• Debt Management: Issued a USD 500 million bond in June 2025 with a record-low spread of 85 basis points over U.S. Treasuries. Reopened Global Peso-Denominated Notes totaling MXN 15.5 billion.
• Risks and Contingencies:
  • Regulatory: Telcel (Mexico) was fined MXN 1.8 billion by the Federal Telecommunications Institute (IFT) regarding alleged anti-competitive practices in SIM card distribution. Telcel denies the accusations.
  • Geopolitical/Economic: Uncertainty regarding U.S. tariffs on imports weighed on the U.S. dollar value against regional currencies. Argentina's figures are adjusted for hyperinflation (IAS 29).
  • Operational: Prepaid subscriber clean-ups in certain markets (Honduras, Brazil) impacted net subscriber counts.

Key Facts for Investor Verification

• FX Impact: Verify the sustainability of the MXN 11 billion foreign exchange gain, which was a primary driver of the net income turnaround.
• Prepaid Churn: Monitor the trend of prepaid disconnections in Brazil and Central America to ensure the "clean-up" does not signal broader market share loss.
• Regulatory Exposure: Assess the potential financial and operational impact of the MXN 1.8 billion fine against Telcel and any ongoing litigation.
• Debt Maturity: Review the maturity profile of the new USD 500M bond and the reopened Peso notes to understand future refinancing needs.
• Argentina Inflation: Confirm the methodology for Argentina's constant peso reporting and its impact on consolidated growth metrics.