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01/11 11:05
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Postpaid Clients Added just over 3 million postpaid clients in the quarter, with Brazil contributing 1.5 million, followed by Colombia with 251,000, Peru with 198,000, and Mexico with 98,000. Year-over-year, the postpaid base increased by 8.1%.
Prepaid Platform Recorded net disconnections of 31,000 due to losses in Brazil, Ecuador, and Chile, offset by additions in Argentina (253,000), Colombia (237,000), and Mexico (136,000).
Fixed-line Broadband Accesses Gained 526,000 broadband accesses, including 211,000 in Mexico, 86,000 in Brazil, 56,000 in Argentina, and 51,000 in Colombia. Fixed broadband accesses grew by 5.1% year-over-year.
Total Accesses At the end of September, had 408 million accesses, including 140 million postpaid clients and 79 million fixed-line RGUs.
Third Quarter Revenue Totaled MXN 233 billion, up 4.2% in Mexican peso terms and 6.2% at constant exchange rates. Service revenue also expanded at a 6.2% pace, driven by the appreciation of the Mexican peso versus the dollar, Chilean peso, and Argentine peso.
Mobile Platform Service Revenue Posted its best rate of growth in 2 years at 7.1%, with prepaid revenue expanding 3.9% and postpaid revenue climbing 9.1%. Mexico, Colombia, and Chile were the main contributors to this growth.
Fixed-line Service Revenue Decelerated to 4.7% from 7.9% in the prior quarter due to a slowdown in corporate networks revenue, which fell from a 15% increase in Q2 to a 3.5% increase in Q3. Corporate networks revenue now accounts for 21% of fixed-line service revenue.
EBITDA Totaled MXN 94 billion, up 4.9% in Mexican peso terms and 6.8% at constant exchange rates. Adjusting for tower sales a year ago, EBITDA growth outpaced revenue growth.
Operating Profit Came in at MXN 50 billion, up 5.6% in nominal terms and 6.4% at constant exchange rates.
Net Income Surged to MXN 23 billion, equivalent to 38 Mexican peso cents per share or 40 dollar cents per ADR, driven by FX gains and reduced comprehensive financing costs.
Operating Cash Flow Amounted to MXN 138 billion for the 9 months to September, after deducting MXN 34 billion in increased working capital and MXN 67 billion in interest payments and taxes.
Capital Expenditure Totaled MXN 85 billion over the 9-month period.
Free Cash Flow Amounted to MXN 53 billion, a 47% increase year-over-year compared to MXN 36 billion a year before. This increase was supported by MXN 2.3 billion in dividend income and allowed for shareholder distributions, equity investments, labor obligation payouts, and debt reduction.
Net Debt Reduced by MXN 16 billion, ending at MXN 454 billion, equivalent to 1.55x net debt to EBITDA after leases.
Postpaid client additions: Added over 3 million postpaid clients in the quarter, with Brazil contributing 1.5 million, followed by Colombia (251,000), Peru (198,000), and Mexico (98,000).
Fixed-line broadband growth: Gained 526,000 broadband accesses, including 211,000 in Mexico, 86,000 in Brazil, 56,000 in Argentina, and 51,000 in Colombia.
Mobile service revenue growth: Mobile service revenue grew at its fastest rate in 2 years (7.1%), driven by prepaid revenue recovery (3.9%) and postpaid revenue growth (9.1%). Mexico, Colombia, and Chile were key contributors.
Fixed-line service revenue: Decelerated to 4.7% growth from 7.9% in the prior quarter, due to a slowdown in corporate networks revenue.
EBITDA growth: EBITDA totaled MXN 94 billion, up 4.9% in nominal terms and 6.8% at constant exchange rates, with a trend of EBITDA growing faster than revenue.
Free cash flow increase: Free cash flow increased by 47% year-on-year to MXN 53 billion, supported by dividend income and reduced net debt by MXN 16 billion.
Corporate networks revenue: Corporate networks revenue, a growing segment, now accounts for 21% of fixed-line service revenue, despite recent volatility.
U.S. Economic Slowdown: The U.S. economy is showing signs of slowing down, as evidenced by a sharp decline in new job creation. This could impact the company's operations and revenue in the region.
Currency Volatility: The U.S. dollar has depreciated against several regional currencies, including the Mexican peso, Brazilian real, and Colombian peso. This currency fluctuation could affect financial performance and operational costs.
Prepaid Platform Disconnections: Net disconnections of 31,000 were recorded in the prepaid platform, with losses in Brazil, Ecuador, and Chile. This could indicate challenges in retaining prepaid customers in these markets.
Fixed-Line Service Revenue Deceleration: Fixed-line service revenue growth decelerated from 7.9% to 4.7%, driven by a slowdown in corporate networks revenue. This volatility in corporate network contracts and IT projects could impact overall revenue stability.
High Operating Cash Flow Deductions: Operating cash flow faced significant deductions, including MXN 34 billion in increased working capital and MXN 67 billion in interest payments and taxes. This could constrain financial flexibility.
Net Debt Levels: Net debt remains high at MXN 454 billion, equivalent to 1.55x net debt to EBITDA after leases. This could pose risks to financial stability and limit future investment capacity.
EBITDA Growth: EBITDA totaled MXN 94 billion and was up 4.9% in Mexican peso terms and 6.8% at constant exchange rates from the year-earlier quarter. Adjusting for tower sales a year ago, the company expects EBITDA to continue expanding more rapidly than revenue going forward.
Operating Profit: Operating profit came in at MXN 50 billion, up 5.6% in nominal terms and 6.4% at constant exchange rates. The company anticipates maintaining this growth trend.
Free Cash Flow: Free cash flow amounted to MXN 53 billion, a 47% increase year-on-year. The company expects to continue generating strong free cash flow.
Corporate Networks Revenue: Corporate networks revenue decelerated to a 3.5% increase in the third quarter from 15% in the second quarter. The company views this segment as increasingly relevant and expects it to remain an important revenue item.
Dividend Distribution: MXN 29 billion distributed to shareholders, including MXN 11 billion in share buybacks.
Share Buyback Program: MXN 11 billion allocated for share buybacks as part of the shareholder return plan.
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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