América Móvil reports Q3 profit decline
24 October 2014 |
Mexican conglomerate América Móvil has reported a drop of just under 40% in net profit for Q3 2014, compared to the same period last year.
Net profit for the Carlos Slim-owned operator fell to 10.12 billion pesos ($754 million) in the July-September period, from 16.38 billion pesos 12 months earlier.
The company’s tax burden rose by 4.43 billion pesos compared to Q3 last year, and it posted an exchange rate loss of 8.97 billion pesos.
Analysts had expected the company to report a strong net profit for Q3 2014, but one said that América Móvil’s “top line and ebitda numbers were OK”.
Despite a revenue increase following the consolidation of Telekom Austria – of which it now owns nearly 60% – América Móvil is thought to have been hard hit as a result of new regulation in Mexico.
In response this regulation, Slim said in July that the company would sell several assets in attempt to fall under the required 50% market share threshold set by the reform.
Rumours that an agreement would materialise between América Móvil and Verizon have been denied by the US carrier.
A further policy of the reform is the zero interconnection rate for traffic from other operators, which, according to América Móvil, has seen a 5.5% drop in mobile service revenues across Mexico, particularly in voice.
Earlier this month, América Móvil said it was planning to complete a merger of its Brazilian businesses by early December.