America Movil posts solid growth

09 September 2019

Mexican operator America Movil reported healthy profit growth in the second quarter, boosted by a strong mobile performance in its home market and Brazil, along with a decline in financial costs.

Controlled by tycoon Carlos Slim, the business posted net income of Mex$14.1bn (US$738.9m) up significantly from Mex$435m year-on-year.

However, revenue declined 2.7% to Mex$250bn, which the company said was because of gains in the Mexican peso against other currencies, including those in Latin America.

Nevertheless, the strength of the peso also helped America Movil lower overall financial costs by two-thirds to Mex$11.9bn.

Furthermore, it benefitted from a Mex$2.2bn foreign exchange profit, compared with a Mex$30bn loss in the comparable quarter last year.

“The operating profits and foreign exchange gains were instrumental in our turning a Mex$14.1 billion net profit in the period,” the company said in its earnings statement.

Elsewhere, mobile service revenue grew 5.6% in total, with an 8.3% rise in Mexico, 8.9%, rise in Brazil and a 6.9% increase in the Dominican Republic.

There were declines in Peru and Chile, following a reduction in interconnection rates and strong competition.

The company’s fastest-growing business by revenue was fixed-broadband, increasing 7.7%.

However, this was offset by declines in pay-TV which slipped by 4.2%.

America Movil ended the period with 278 million subscribers, with its mobile post-paid base up 7.2% year on year, though its prepaid base dropped 3.4%

The company added 1.6 million post-paid subscribers in Q2, mainly from Brazil, Mexico and Austria.