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: Third Quarter 2024 (Ended September 30, 2024)
Filing Date: October 17, 2024
América Móvil is a leading telecommunications provider operating primarily in Latin America and Europe. The company reported financial and operating results for Q3 2024, highlighting subscriber growth across mobile and fixed-line segments, revenue expansion driven by service revenue, and improved profitability metrics.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | YoY Change |
|---|---|---|---|
| Total Revenue (Mex$ Billions) | 223.5 | 203.8 | +9.6% |
| Service Revenue (Mex$ Billions) | 188.2 | 169.1 | +11.3% |
| EBITDA (Mex$ Billions) | 89.4 | 79.9 | +11.9% |
| EBITDA Margin | 40.0% | 39.2% | +0.8 pts |
| Operating Profit (EBIT) (Mex$ Billions) | 47.4 | 41.5 | +14.2% |
| Net Income (Mex$ Billions) | 6.4 | 2.0 | +216.8% |
| Earnings Per Share (Mex$) | 0.10 | 0.03 | N/A |
| Net Debt (Mex$ Billions) | 433.0 | 385.4 (Dec '23) | +12.4% (vs Dec '23) |
| Net Debt/EBITDAaL | 1.34x | N/A | N/A |
Note: Net debt excludes leases. Net debt increased partly due to the depreciation of the Mexican peso against non-peso financial obligations.
Material Changes vs. Prior Period
- Subscriber Growth: Added 1.8 million net mobile subscribers in Q3, including 1.4 million postpaid. Total wireless base reached 315.8 million. Fixed-line broadband accesses grew by 327,000, totaling 33.2 million.
- Revenue Drivers: Service revenue grew 11.3% in local currency terms, driven by mobile service revenue (best performance in over a year) and fixed-line corporate networks. At constant exchange rates, service revenue rose 5.5%.
- Profitability Surge: Net income nearly tripled year-over-year to 6.4 billion pesos, aided by a 14.2% increase in operating profit and a 4.8% reduction in comprehensive financing costs.
- Regional Performance:
- Brazil: EBITDA up 13.2%; fixed-line service revenue grew 4.1% (best in 8 years).
- Argentina: Service revenue up 17.2% (constant peso terms) as inflation pressures eased.
- Central America: EBITDA up 13.9%, the best performance in three years.
- Colombia: Service revenue up 4.5%, the highest growth rate in three years.
Outlook, Risks, and Unusual Items
- ClaroVTR Consolidation: On October 3, 2024, América Móvil received approval to consolidate ClaroVTR (Chile) from October 31, 2024. Upon conversion of loans to equity, AMX will hold approximately 91% ownership.
- ESG Rating Upgrade: MSCI ESG Ratings upgraded the company to "A" from "BBB" in August 2024, citing improvements in cybersecurity, data privacy, and corporate governance.
- Capital Allocation: In the first nine months of 2024, the company covered 86.7 billion pesos in capital expenditures and 32.9 billion pesos in shareholder distributions (split evenly between buybacks and dividends).
- Risks and Contingencies:
- Argentina: Financial results are presented under IAS 29 due to hyperinflation; comparisons exclude Argentina for constant exchange rate consistency.
- Ecuador: Facing economic challenges including liquidity constraints, oil production disruptions, and an energy crisis causing power cuts.
- Currency Volatility: The depreciation of the Mexican peso against the dollar, euro, and other regional currencies (except the Brazilian real) positively impacted reported revenue in peso terms.
Investor Verification Checklist
- ClaroVTR Integration: Verify the timeline and financial impact of the full consolidation of ClaroVTR in Chile starting October 31, 2024.
- Argentina Inflation Accounting: Review the specific adjustments made under IAS 29 for Argentina to understand the real growth versus nominal reporting.
- Debt Composition: Analyze the impact of the Mexican peso's depreciation on the reported net debt increase of 47.3 billion pesos since December 2023.
- EBITDA Adjustments: Confirm the magnitude of one-off items (tower sales) excluded from adjusted EBITDA calculations to assess core operating leverage.
- Capital Expenditure Run Rate: Assess if the 86.7 billion pesos in Capex for the first nine months aligns with long-term infrastructure investment plans.