America Movil’s struggles continued as the operator reported a 50.5 per cent drop in net income for Q1, with currency fluctuations delivering a hit to earnings.
In its earnings statement, the operator revealed it generated a net profit of MXN17.7 billion ($940 million) in Q1 2018, a drop from MXN35.9 billion in the same quarter year prior. Despite the drop, the company will be encouraged it swung back into the black, after reporting net losses in the previous two quarters.
Revenue for Q1 hit MXN254.5 billion, a 3.7 per cent drop from MXN264.2 in Q1 2017, but on a constant currency basis the figure rose 2.8 per cent. Service revenue dropped 4.4 per cent, reaching MXN221 billion from MXN231.3 billion, but also rose on constant exchange rates by 2.1 per cent.
EBITDA was “practically flat” at MXN71.2 billion, but at constant exchange rate it was up 5.9 per cent.
The company noted long-term US interest rates rose to levels “not seen in over four years”, but the “Latin American market was not affected by the increase in the US interest rates”.
“In fact, the Mexican peso became one of the best performing currencies following its depreciation in the fourth quarter of 2017,” it added.
The company said the main drags on revenue came from fixed-line voice, “reflecting major reductions in long distance revenues in Brazil and Mexico”. The major revenue drivers came from post paid and prepaid data, together with fixed-broadband gains.
Home market Mexico was a bright spot for the company in the quarter, with total revenue increasing to MXN66.5 billion from MXN63.4 billion in the comparable 2017 quarter: service revenue increased 6.3 per cent year-on-year.
Wireless subscribers in Mexico rose 1.4 per cent to 74 million. The company ended the quarter with 279 million wireless subscribers across its operations, a 0.3 per cent drop from the same period of 2017.