AMX America Movil SAB de CV

Mexico City - América Móvil, S.A.B. de C.V. (“América Móvil”) [BMV: AMX] [NYSE: AMX, AMOV], announced today its financial and operating results for the third quarter of 2023.

⁽¹⁾ Net Income / Average Shares Outstanding

⁽²⁾ 20 shares per ADR

⁽³⁾ EBITDA / Average Shares Outstanding

Note

Upon its sale in July 2022 Claro Panama became a discontinued operation. Claro Chile did so as well upon the establishment of the joint venture with Liberty Latin America in October 2022. The financial statements presented in this report account for those operations as discontinued operations.

The reported figures for Argentina corresponding to the third quarter of 2023 are presented in accordance with IAS29 reflecting the effects of inflationary accounting as the Argentinean economy is deemed to be hyperinflationary. All comparisons at constant exchange rates for América Móvil’s consolidated figures will exclude Argentina to ensure consistency.

Relevant Events

Telekom Austria stake to 56.5%

On July 24th we acquired shares corresponding to 5.55% of the voting rights in Telekom Austria AG thereby increasing our overall stake in the company to 56.55%.

We completed the spin-off of EuroTeleSites

On September 22nd we completed the spin-off of EuroTeleSites AG and listed its shares on the Official Market of the Vienna Stock Exchange. Shareholders of Telekom Austria AG received one EuroTeleSites share for every four Telekom Austria shares they held. Telekom Austria transferred 13 thousand towers in six countries to EuroTeleSites together with debt in the amount of one billion euros. EuroTeleSites has received a Baa2 rating from Moody’s and BBB- from Fitch. Telekom Austria currently has an A- rating from both S&P and Fitch and a Baa1 rating from Moody’s.

Access Lines

3.0M wireless net adds, 2.0M were postpaid clients

We added nearly three million wireless subscribers in the third quarter of which two million were postpaid clients: 1.2 million from Brazil, 406 thousand from Austria—including 398 thousand from A1 digital—, 104 thousand from Colombia and 93 thousand from Mexico. On our prepaid platform we had net additions of 950 thousand clients during the period. Brazil gained 193 thousand, followed by Colombia with 173 thousand, and Mexico with 81 thousand.

223k new broadband accesses

In the fixed-line segment, we gained 223 thousand broadband accesses, with 65 thousand each from Argentina and Brazil. Voice lines and PayTV units decreased by 160 thousand and 58 thousand, respectively.

Postpaid base +3.7% YoY and fixed-broadband accesses +3.2% YoY

At the end of September, our subscriber base totaled 306.2 million wireless subscribers, of which 119.3 million were postpaid clients. Additionally, we had 73.4 million fixed-line RGUs, which includes 31.6 million broadband accesses, 13.1 million Pay TV clients, and 28.8 million landlines. Year-on-year, our postpaid base increased 3.7%, prepaid 0.7%, and fixed-broadband accesses 3.2%.

⁽¹⁾ Includes total subscribers of all companies in which América Móvil holds an economic interest; does not consider the date in which the companies started being consolidated.

⁽²⁾ Reflects cleanup associated with the acquisition of Oi.

⁽¹⁾ Fixed Line, Broadband and Television (Cable & DTH).

⁽²⁾ The number of Pay TV units has been adjusted to the criteria by which we report to the local regulator.

⁽¹⁾ Includes total subscribers of all companies in which América Móvil holds an economic interest; does not consider the date in which the companies started being consolidated.

América Móvil Consolidated Results

Buoyed by strong U.S. economic data—particularly on employment levels—and lingering inflation concerns, ten-year dollar interest rates shot up by approximately 80 basis points over a ten week span in the third quarter, to 4.6%, driving another bout of dollar-strengthening. By the end of the quarter there was practically no more hope that interest rates would decline in the latter part of the year and there was instead preoccupation that the Fed was still not done raising interest rates.

Third quarter revenue reached 204 billion pesos, a 3.3% year-on-year reduction in Mexican peso terms, with service revenue falling 4.3%. As has been the case throughout several quarters, these figures reflect the appreciation of the Mexican peso vs. all other currencies in our region of operations, reducing the Mexican peso value of our international revenue. At constant exchange rates, service revenue growth expanded 3.8%.

On the fixed-line platform service revenue remained on trend, increasing 2.2% year-on-year—having risen from the 0.2% pace seen in the second half of last year—whereas on the mobile platform it rose 4.8%.

Brazil attained a positive fixed-line service revenue growth of 0.1%. In Mexico and Colombia fixed-line revenue decelerated, remaining stable in Austria and surging in Eastern Europe, to 21.5%, and in Central America, to 5.0%. In both cases it was the most rapid pace in at least one year. The slowdown in Mexico had to do with corporate networks services—broadband revenue actually accelerated to 8.2%, its best showing in a decade—while in Colombia it was the other way around.

In several countries—Brazil, Peru, Colombia and Central America—we had among the highest, if not the highest, net broadband additions in the past three years. Others, including Mexico, Austria, Peru and Central America posted their most rapid broadband revenue growth in at least one year with Brazil and Eastern Europe sustaining strong growth rates. This led to our consolidated broadband revenue expanding at the fastest rate in more than two years, 6.4%.

It is important to note that revenue from corporate network services has been gaining share within our revenue. This quarter it became the second most important revenue line within the fixed-line platform after broadband services. It already accounts for 19% of fixed-line services overall, with this share reaching 39% in Austria, 30% in Eastern Europe, 25% in Mexico and 23% in Puerto Rico.

In the third quarter corporate network revenue was up 5.4% in Austria, 63% in Eastern Europe, 2.6% in Mexico and 9.0% in Puerto Rico, with the consolidated figure rising 6.5%.

On the mobile platform revenue growth decelerated in Mexico from 6.4% to 4.6% and picked up in Central America, to 9.5% from 8.8%, with Brazil’s adjusting to a normal pace after the incorporation of Oi mobile clients in the second quarter of 2022.

In Mexican peso terms EBITDA totaled 80 billion pesos, declining 3.6% from the year-earlier quarter, as the EBITDA margin remained practically flat at 39.2%. At constant exchange rates EBITDA increased 5.0% in the period, which reflects among other things the effect of tower sales in Mexico and Peru that took place in the period and one-off events in Austria. Correcting for these, adjusted EBITDA was up 3.9%.

Our operating profit stood at 41.5 billion pesos in the quarter, a 6.7% year-on-year reduction in Mexican peso terms which partly stems from the EBITDA decline mentioned above but also from a 17.6% increase in depreciation of rights of use associated with tower leases. Most of this effect had to do with the successful renegotiation a year before of certain lease agreements in Brazil that reduced Claro’s obligations.

Our comprehensive financing cost totaled 29.7 billion pesos, including an 8.8 billion pesos net interest expense, 3.9% lower than that registered a year before. Under other financial expenses there is a 4.7 billion pesos charge associated with the partial impairment of our stake in Claro Chile, our joint venture with Liberty Latin America pursuant to the valuation of the new JV under IFRS rules. Finally, our comprehensive financing costs also include a 12.3 billion pesos foreign exchange loss in the quarter, resulting principally from a 3.8% depreciation of the Mexican peso and the Brazilian real vs. the U.S. dollar.

Net income amounted to 2.0 billion pesos. It was equivalent to three peso cents per share or four dollar cents per ADR. Year-to-date our net income totaled 58.0 billion pesos.

Capital expenditures came in at 100.2 billlion pesos in the nine months to September whereas distributions to shareholders reached 24.0 billion pesos. These included share buybacks in the amount of 7.7 billion pesos and dividends of 16.3 billion and were partly funded by 3.7 billion pesos in dividend income.

As of September our net debt excluding leases totaled 389.7 billion pesos and was equivalent to 1.43 times LTM EBITDA. It was 8.3 billion pesos higher than the figure at the end-of-December. In cash flow terms we obtained net financing in the amount of 12.2 billion pesos in the period.

 ⁽¹⁾ Adjusted to reflect the sale of Panama and the deconsolidation of Claro Chile on account of the new joint venture.

 ⁽²⁾ Total Revenue include Other Revenue.

 ⁽³⁾ Excludes the impact from the sale of towers in Peru and Telmex; and one-off events in Austria.

 n.m. Not meaningful.