Business Context and Reporting Period
Company: América Móvil, S.A.B. de C.V.
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Third Quarter 2022 (Ended September 30, 2022)
Announcement Date: October 18, 2022
América Móvil is a leading telecommunications provider operating across Latin America and Europe. The company reported strong subscriber growth, particularly in the postpaid segment, driven by 5G adoption and the integration of Oi's mobile clients in Brazil. The period included the completion of the Sitios Latinoamérica tower spin-off and the joint venture between Claro Chile and VTR.
Key Financial Metrics
| Metric | 3Q 2022 | 3Q 2021 | YoY Change |
|---|---|---|---|
| Total Revenue (MXN Billion) | 214.5 | 210.8 | +1.8% |
| Service Revenue (MXN Billion) | 179.7 | 174.5 | +3.0% |
| EBITDA (MXN Billion) | 83.2 | 81.3 | +2.3% |
| EBITDA Margin | 38.8% | 38.6% | +20 bps |
| Operating Profit (EBIT) (MXN Billion) | 43.6 | 41.4 | +5.2% |
| Net Income (MXN Billion) | 18.0 | 15.8 | +13.7% |
| EPS (Mex$) | 0.28 | 0.24 | +16.7% |
| Net Debt (MXN Billion) | 411.7 | n/a | 1.39x EBITDAaL |
Note: Revenue and EBITDA growth at constant exchange rates was 5.9% and 5.0% respectively, excluding Argentina to ensure consistency.
Material Changes vs. Prior Period
- Subscriber Growth: Added 2.9 million wireless subscribers (1.9 million postpaid). Total wireless base reached 307.8 million (+9.6% YoY). Fixed-line broadband accesses grew to 31.1 million (+2.1% YoY).
- Revenue Drivers: Mobile service revenue rose >9% at constant exchange rates, the fastest rate in five quarters. Brazil led growth at 22.5% (including Oi integration). Corporate networks revenue surged 12.6%.
- Profitability: Net profit increased significantly due to a 34.2% reduction in comprehensive financing costs, primarily driven by the absence of foreign exchange losses incurred in the prior year.
- Capital Allocation: Capital expenditures for the first nine months (105.3 billion pesos) were fully funded by operating cash flow. Shareholder distributions totaled 45.7 billion pesos, including 20.9 billion in share buybacks.
- Strategic Transactions: Completed the spin-off of Sitios Latinoamérica (29,090 towers) and the joint venture of Claro Chile with VTR. Sold interest in Claro Panama.
Outlook, Risks, and Unusual Items
- Argentina Inflation: Argentina's economy is deemed hyperinflationary. Financial results are adjusted under IAS 29. Revenue in constant peso terms declined 12.8% as price increases lagged actual inflation, though subscriber growth remained positive.
- Chile Joint Venture: Regulatory approval received for the Claro Chile/VTR joint venture, expected to improve market positioning.
- Natural Disaster: Hurricane Fiona impacted Puerto Rico in September, causing service disruptions and deteriorating operating metrics for the region. Full damage assessment is pending.
- 5G Expansion: Continued rollout of 5G services in Mexico (64 cities) and Brazil (27 cities), driving postpaid revenue growth and ARPU increases.
- Debt Management: Issued $750 million in 10-year dollar-denominated bonds and completed a tender offer for 550 million euro hybrid notes.
Investor Verification Checklist
- Argentina Adjustments: Verify the impact of IAS 29 inflationary accounting on reported revenue and EBITDA trends in Argentina.
- Constant Exchange Rates: Confirm organic growth rates by reviewing constant currency figures, as nominal peso appreciation masked growth in some regions (e.g., Colombia, Chile).
- Discontinued Operations: Review the treatment of TracFone and Claro Panama sales as discontinued operations to understand the composition of Net Income.
- Debt Maturity Profile: Assess the impact of the Sitios Latinoamérica spin-off on the consolidated debt load and future lease obligations.
- Puerto Rico Recovery: Monitor future filings for the quantified financial impact of Hurricane Fiona on the Caribbean segment.