America Movil saw Q3 net profits nearly halve as it became the victim of wider economic factors, particularly in Mexico, as well as higher finance costs, as it seeks to expand outside Latin America through acquisitions.

The operator reported a net profit of MXN16.4 billion ($1.26 billion), a drop of 46 per cent from MXN30.5 billion a year ago.

Revenue rose to MXN194.2 billion, although it was only an increase of 0.7 per cent from MXN192.8 billion.

Almost half of its profits, expressed at the Ebitda level, comes from the Mexican market, where the operator has been affected by the disappointing local economy. Service revenue fell by 1.4 per cent to MXN36.29 billion.

And regulatory reforms of the country’s mobile market threaten to further worsen profits in the longer term. Hence, America Movil’s interest in buying into Europe’s undervalued telecoms market.

However, the company was hit by higher financing costs, as well as foreign exchange movements. Since December 2012, America Movil’s net debt increased by MXN68 billion to MXN440 billion (end-September figure). Outlays include MXN16.5 billion spent on acquisitions, part of which was the operator’s share of KPN’s rights issue.

The company made a loss of MXN2.9 billion on foreign exchange movements in Q3, compared to a gain of MXN9 billion a year ago. Total financing costs were MXN10.8 billion.

America Movil is seeking acquisitions outside Latin America. KPN is the most recent target although earlier this month the operator withdrew its €7.2 billion bid. Obstacles to the bid were financial but also political.