América Móvil sees operating profit jump 9.3%
América Móvil’s operating profit increased 9.3% in Q2, with net profit more than doubling year on year to reach 42.8 billion pesos (US$2.1 billion).
Although it warned that Coronavirus impacts in Q2 2020 have seen some year-on-year comparisons skewed, foreign exchange gains, debt reduction, equipment and customer additions drove the positive results, published on Tuesday.
The Mexican peso appreciated 2.4% in the quarter against the US dollar. América Móvil’s revenues increased 0.4% to 252.5 billion pesos when compared to 2020, while EBITDA increased 2.8% in nominal terms compared to Q2, 2020.
Short term debt reduced 20.4%, while long-term debt reduced 2.1%.
At the end of June, net debt stood at 591 billion pesos including 103 billion pesos in capitalised leases.
Equipment revenue increased by 34% as commercial activity increased.
Strong operating cash flow allowed the business to fund capital expenditures to the tune of 57.4 billion pesos in H1 while reducing debt by 36.9 billion pesos and buying back shares for 11 billion pesos.
On customers, standout markets for wireless additions included Brazil, the Caribbean and Peru. Year on year, there was a 15.3% increase in wireless subscribers in Brazil; 10.3% in the Caribbean and 10.7% in Peru. Across all markets, wireless line subscriptions increased 7.3%.
In fixed line the highest number of adds was recorded in Argentina, Paraguay and Uruguay, which, counted as one market and saw a 31.4% increase in customers.
Mobile and fixed-line service revenue were up both on an annual basis and sequential basis at constant exchange rates. In the case of mobile, the increases were 7.2% and 2.2%, respectively; in the case of fixed-line, 1.5% and 0.6%.
The expansion of mobile service revenues was driven by prepaid services, up 9.5% and 3.7%, respectively.