America Movil swung back to profit in Q3 2018, as the company was boosted by favourable foreign exchange movements and increased uptake of lucrative mobile contract plans.
The Mexico-based operator group reported a net profit of MXN18.6 billion ($1 billion) for the three months ending September 2018, compared to a loss of MXN9.5 billion in the same quarter in the previous year, when results were heavily impacted by a Colombian arbitration ruling.
Revenue for the period rose to MXN249.2 billion, a 2.1 per cent increase from Q3 2017, attributed largely to a gain of 1.1 million postpaid subscribers in the quarter.
Brazil experienced the highest gains, with 472,000 net additions of postpaid subscribers, ahead of 184,000 in Mexico and 100,000 in Colombia. The postpaid base – whereby customers sign up to lucrative mobile contracts – increased 7.6 per cent overall from last year.
America Movil’s performance was also boosted by foreign exchange movement, which has hampered its earnings in recent quarters.
The company said continued expansion of the US economy meant a “new bout of dollar strength” that affected emerging markets in general, and particularly currencies in Argentina and Brazil.
However, this was offset by reduced political uncertainty, with Mexico and Colombian currencies appreciating versus the US dollar following elections in both countries.
Mobile service revenue in Mexico was also strong, growing 9.5 per cent. It grew even further in Brazil at 10.5 per cent. ARPUs increased 13 per cent in Brazil, 11 per cent in the US and 8 per cent in Mexico.
Gains were largely driven by an increase in overall data use, soaring 78.2 per cent year on year. This comprised rates doubling in Brazil, Peru and the US and growing more than 60 per cent in Mexico, Chile, Ecuador and Guatemala.
Q3 revenue in Mexico hit MXN71.8 billion, up from MXN66.2 billion year-on-year, with a 2 per cent increase in subscriber numbers – totaling 74.7 million at the end of the period.Subscribe to our daily newsletter Back