América Móvil announced in its quarterly report this week a 90 percent drop in its fourth-quarter net profit down to $703 million from $6.8 billion from the same period a year earlier. According to Reuters, the precipitous fall off was mainly due to the deconsolidation of Claro Chile and currency volatility.
The company said it added 1.5 million postpaid clients and 1.8 million prepaids, organically, in the fourth quarter for a total of 3.3 million subscribers. Brazil, Austria and Colombia were the main contributors with postpaid gains of 599,000, 322,000 and 160,000, respectively, whereas Mexico was the main contributor of prepaid net additions with 975,000 followed by Colombia and Central America with 546,000 and 247,000, respectively.
Fourth quarter revenue totaled $12 billion down 2.4 percent year-on-year in Mexican peso terms—as the Mexican peso appreciated vis-à-vis all of the company’s main operating currencies other than the Brazilian real—with service revenue declining 1.4 percent. At constant exchange rates, service revenue increased 6.0 percent year-on-year, with Eastern Europe leading the way at 9.6 percent, followed by Brazil at 9.0 percent and Mexico at 5.7 percent.
Other highlights included:
- Mobile and fixed-line service revenue were up 9.8 percent and 0.2 percent, respectively, at constant exchange rates. The expansion of mobile service revenue was driven by postpaid revenue growth that accelerated to 10.5 percent.
- EBITDA came in at $4.6 billion, 4.4 percent less than a year before. At constant exchange rates, EBITDA was up 2.3 percent year-on-year. Adjusted for extraordinary items, EBITDA rose 5.0 percent.
- Operating profit totaled $2.4 billion in the quarter, down 7.2 percent. After comprehensive financing costs of $450 million resulting in a net profit of $1.24 million from continued operations, 5.3 percent more than in the year-earlier quarter, and of $740 million once the effect of the deconsolidation of Claro Chile is taken into account.
- Cash flow plus $380 million in net borrowings enabled the company to cover capital expenditures of $8.65 million, shareholder distributions of 50.2 billion pesos and labor obligations of $1.32 million.
- At the end of December, net debt—excluding leases—stood at $21 million. It was equivalent to a net debt-to-EBITDA ratio of 1.30x.
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