Currency fluctuations drove Mexico-based America Movil to a net loss in the second quarter, offsetting a year-on-year increase in revenue.
The operator reported a loss of MXN236 million ($12.4 million) in the recent quarter compared with a profit of MXN14.3 billion in Q2 2017, on revenue of MXN257 billion, up 4.3 per cent year-on-year.
At the heart of its troubles was a weakening in the value of the Mexican peso relative to the US dollar during the quarter, caused by rising US interest rates, investor caution over the future of the North American Free Trade Agreement, and Mexico’s elections.
This meant America Movil’s financial costs doubled to MXN32.2 billion.
“A widening yield-differential versus other countries led to an appreciation of the dollar versus most currencies…the Mexican peso and the Brazilian real were also affected by this process but even more so on account of local events,” America Movil said in a statement.
“The expansion of both post paid and prepaid data revenues continued to stand out”, the company added.
In its domestic market, revenue was up 8 per cent to MXN71.1 billion.
Last week it was reported Mexico’s telecom watchdog wants America Movil to continue with the process of separating its fixed-line and mobile units, even though the operator challenged the move in court.