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 2024 (Ended June 30, 2024)
Filing Date: July 18, 2024
América Móvil is a leading telecommunications provider operating across Latin America and Europe. The company reported financial and operating results for Q2 2024, highlighting subscriber growth in key markets including Brazil, Colombia, and Mexico, alongside significant foreign exchange impacts on consolidated net income.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | YoY Change |
|---|---|---|---|
| Total Revenue (MXN Billions) | 205.5 | 202.5 | +1.5% |
| Service Revenue (MXN Billions) | 175.1 | 169.2 | +3.5% |
| EBITDA (MXN Billions) | 83.1 | 78.7 | +5.6% |
| EBITDA Margin | 40.4% | 38.9% | +150 bps |
| Operating Profit (EBIT) (MXN Billions) | 45.5 | 40.3 | +12.9% |
| Net Income (MXN Millions) | -1,093 | 25,875 | -104.2% |
| Net Debt (MXN Billions, excl. leases) | 404.2 | 385.4 (Dec '23) | +18.8% (QoQ) |
| Net Debt/EBITDAaL | 1.38x | N/A | - |
Cash Flow & Capital Allocation (H1 2024): Operating cash flow and net financing of 14.3 billion pesos covered 56.2 billion pesos in capital expenditures, 12.5 billion pesos in share buybacks, and approximately 12.5 billion pesos in labor obligations.
Material Changes vs. Prior Period
- Subscriber Growth: Added 2.4 million net wireless subscribers in Q2. Postpaid additions were 1.8 million (Brazil: 907k, Colombia: 183k, Mexico: 99k). Prepaid additions were 599k (Colombia: 261k, Argentina: 191k). Fixed-line broadband accesses increased by 376k.
- Revenue Mix: Service revenue grew 3.5% YoY (4.7% at constant exchange rates), while equipment revenue declined 9.8% YoY.
- Profitability vs. Net Income: While Operating Profit rose 12.9% to 45.5 billion pesos, the company reported a Net Loss of 1.1 billion pesos. This was primarily driven by comprehensive financing costs of 40.2 billion pesos, largely due to foreign exchange losses from the depreciation of the Mexican peso.
- Debt Position: Net debt increased to 404.2 billion pesos, driven mostly by currency translation effects rather than cash flow usage.
Outlook, Risks, and Management Commentary
- ClaroVTR Consolidation: Liberty Latin America will not exercise its catch-up right in the Chilean joint venture. América Móvil expects to increase its stake from 50% to ~91% upon regulatory approval, consolidating the operation. This is expected to add less than 0.1x to the net debt/EBITDA leverage ratio.
- Infrastructure Investment: In Chile, the company is modernizing mobile infrastructure (adding 1,200 sites, 5G rollout) and migrating fixed-line customers to FTTH. In Brazil, the company passed 10 million 5G customers.
- Argentina Inflation: Argentina's inflation rate eased to single digits in April, allowing for positive revenue growth in constant peso terms (Service revenue +9.3% YoY). Financial results for Argentina are presented in accordance with IAS 29 (hyperinflationary accounting).
- Key Risks: Significant exposure to foreign exchange fluctuations, particularly the Mexican peso, which materially impacted net income. Regulatory approvals are required for the Chilean consolidation.
Investor Verification Checklist
- FX Impact: Verify the magnitude of foreign exchange losses (32.1 billion pesos in Q2) and their impact on future net income projections given currency volatility.
- Chile Consolidation: Monitor the timeline for regulatory approval to consolidate ClaroVTR and the resulting impact on leverage ratios and EBITDA.
- Argentina Normalization: Assess the sustainability of revenue growth in Argentina as inflation stabilizes and the peso exchange rate fluctuates.
- Capital Discipline: Review the balance between high capital expenditures (56.2 billion pesos in H1) and free cash flow generation to ensure continued ability to fund buybacks and debt service.
- Postpaid Migration: Confirm the trend of accelerating postpaid subscriber growth in Brazil and Colombia as a driver for ARPU stability.