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01/11 03:32
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary shows strong financial performance, with subscriber and revenue growth, and increased EBITDA. The Q&A section reveals positive drivers in Brazil and Mexico, regulatory changes viewed positively, and a strong network and commercial strategy. Despite some unclear responses, the overall sentiment is positive, driven by strong financial metrics and optimistic guidance. The company's strategic focus on network quality and customer care supports a positive outlook, likely resulting in a stock price increase of 2% to 8% over the next two weeks.
Revenue Second quarter revenue totaled MXN 234 billion, a 13.8% year-on-year increase. This increase partly reflects the depreciation of the Mexican peso versus most currencies in the region of operations. At constant exchange rates, revenue increased by 7.9%, marking the strongest performance in over a year.
Service Revenue Service revenue growth moved up to 7.3%, with postpaid service revenue expanding 9.5% and prepaid revenue growth recovering to 3.1% from 0.9% in the preceding quarter. The rebound in prepaid revenue growth was driven by Mexico, where prepaid ARPU climbed 2.2% in the quarter after a 2.2% decline in the first quarter.
Equipment Revenue Equipment revenue grew by 12.5%, contributing to the broad-based revenue expansion across business lines and countries.
EBITDA EBITDA came in at MXN 92.4 billion, up 11.2% in Mexican peso terms and 5.1% at constant exchange rates. EBITDA margins were nearly flat sequentially across all countries.
Operating Profit Operating profit was MXN 47 billion, a 4% increase from the year-earlier quarter. This was impacted by a 24.5% jump in depreciation of right of use associated with tower leases due to the consolidation of the Chilean operation and accounting effects related to Argentina as a hyperinflationary country.
Net Profit Net profit was MXN 22.3 billion, equivalent to MXN 0.37 per share and $0.38 per ADR. This was supported by MXN 11 billion in foreign exchange gains.
Net Debt Net debt fell by MXN 7.3 billion in the six months to June. However, net debt to last 12 months EBITDA increased slightly to 1.56x due to the appreciation of the Mexican peso and the euro against the U.S. dollar.
CapEx CapEx amounted to MXN 54.9 billion in the six months to June.
Shareholder Distributions Shareholder distributions totaled MXN 9.4 billion, including MXN 8.7 billion in share buybacks and MXN 2.7 billion in labor obligations.
Postpaid Clients: Added 2.9 million postpaid clients, with Brazil contributing 1.4 million, Colombia 199,000, and Mexico 102,000.
Fixed Broadband Access: Gained 462,000 broadband accesses, including 231,000 in Mexico, 66,000 in Brazil, and 51,000 in Central America.
Revenue Growth: Second quarter revenue totaled MXN 234 billion, a 13.8% year-on-year increase. Service revenue grew by 7.3%, and equipment revenue grew by 12.5%.
Regional Revenue Performance: Revenue expansion was broad-based across business lines and countries, with Mexico and Colombia driving sequential acceleration of revenue growth.
EBITDA: EBITDA was MXN 92.4 billion, up 11.2% in Mexican peso terms and 5.1% at constant exchange rates. Margins were nearly flat sequentially across countries.
Net Debt: Net debt fell by MXN 7.3 billion in the first half of 2025, with CapEx amounting to MXN 54.9 billion.
Shareholder Distributions: Distributed MXN 9.4 billion to shareholders, including MXN 8.7 billion in share buybacks.
Tariffs imposed by the U.S. government: Significant uncertainty associated with tariffs on merchandise imports, which could impact operations and financial performance.
Currency fluctuations: The U.S. dollar's depreciation against regional currencies (e.g., Mexican peso, Brazilian real) could affect financial results and operational costs.
Subscriber disconnections: Net disconnections of 1.1 million prepaid subscribers in key markets like Brazil, Chile, and Central America, which could impact revenue.
Decline in fixed line services: Voice lines and PayTV units declined by 164,000 and 61,000, respectively, indicating challenges in maintaining fixed line service revenues.
Hyperinflation in Argentina: Accounting effects due to Argentina's hyperinflationary status could complicate financial reporting and operational planning.
Increased depreciation costs: Depreciation of right-of-use assets associated with tower leases increased by 24.5%, impacting operating profit.
Leverage concerns: Net debt to EBITDA ratio increased slightly due to currency appreciation, which could raise concerns about financial stability.
Revenue: Our second quarter revenue totaled MXN 234 billion, a 13.8% year-on-year increase. At constant exchange rates, we posted our strongest revenue performance in over a year with a 7.9% increase. Revenue expansion was broad-based across business lines and countries, with service revenue growth at 7.3% and equipment revenue at 12.5%. Postpaid service revenue expanded 9.5%, and prepaid revenue growth recovered to 3.1%.
EBITDA: EBITDA came in at MXN 92.4 billion, up 11.2% in Mexican peso terms and 5.1% at constant exchange rates. EBITDA margins were nearly flat sequentially across the board.
Operating Profit: Operating profit was MXN 47 billion, a 4% increase from the year earlier quarter.
Net Profit: Net profit was MXN 22.3 billion in the quarter, equivalent to MXN 0.37 per share and $0.38 per ADR.
Net Debt: Net debt fell by MXN 7.3 billion in the 6 months to June. Net debt to last 12 months EBITDA stood at 1.56x, a slight increase over the prior quarter.
CapEx: CapEx amounted to MXN 54.9 billion.
Shareholder distributions: MXN 9.4 billion, including MXN 8.7 billion in share buybacks and MXN 2.7 billion in labor obligations.
Share buybacks: MXN 8.7 billion in share buybacks as part of shareholder distributions.
The earnings call summary shows strong financial performance, with revenue, EBITDA, and net income growth. Mobile platform service revenue is up, and net debt is reduced. The Q&A reveals positive sentiment about mobile prepaid revenues and margin expansion in key regions. Potential acquisitions are in early stages but could offer strategic benefits. The competitive environment is manageable, with the company leveraging its strengths. While some uncertainties exist, the overall sentiment is positive, suggesting a potential stock price increase of 2% to 8% over the next two weeks.
The earnings call summary shows strong financial performance, with subscriber and revenue growth, and increased EBITDA. The Q&A section reveals positive drivers in Brazil and Mexico, regulatory changes viewed positively, and a strong network and commercial strategy. Despite some unclear responses, the overall sentiment is positive, driven by strong financial metrics and optimistic guidance. The company's strategic focus on network quality and customer care supports a positive outlook, likely resulting in a stock price increase of 2% to 8% over the next two weeks.
The earnings call shows mixed signals. Positive revenue growth and share buybacks are offset by economic slowdown, prepaid losses, and regulatory uncertainty. The Q&A reveals management's optimism about recovery and strategic focus but lacks clarity on some issues. Despite strong financials, concerns over regulatory changes and economic conditions in Mexico temper expectations. Given these factors, the stock price is likely to remain stable in the short term, leading to a neutral rating.
The earnings call summary reflects strong financial performance with revenue and EBITDA growth, improved leverage, and significant shareholder returns. Despite challenges in subscriber growth and currency fluctuations, the company maintains a stable outlook and proactive strategies. The Q&A reveals competitive positioning in broadband markets and strategic partnerships, although some lack of clarity in satellite connectivity details. Given these factors, along with increased share buybacks and dividends, a positive stock price movement is anticipated, assuming the market cap is not large enough to dampen the reaction.
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