America Movil reported healthy profit growth in Q2, as the Mexican operator was boosted by a strong mobile performance in its home market and Brazil, along with a decline in financial costs.
The operator, controlled by tycoon Carlos Slim, posted net income of MXN14.1 billion ($738.9 million), up significantly from MXN435 million in Q2 2018. Revenue, however, declined 2.7 per cent to MXN250 billion, which the company said was due to gains in the Mexican peso against other currencies, including in Latin America.
But the strength of the peso also helped America Movil lower overall financial costs by two-thirds to MXN11.9 billion. It also benefitted from a MXN2.2 billion foreign exchange profit, compared with a MXN30 billion loss in the comparable quarter of 2018.
In its earnings statement, the company said: “The operating profits and foreign exchange gains were instrumental in our turning a MXN14.1 billion net profit in the period.”
Mobile service revenue grew 5.6 per cent in total, with an 8.3 per cent rise in Mexico, 8.9 per cent rise in Brazil and a 6.9 per cent increase in the Dominican Republic. There were declines in Peru and Chile, due to a reduction in interconnection rates and strong competition.
The company’s fastest-growing business by revenue was fixed-broadband, increasing 7.7 per cent. This was offset by declines in pay-TV which slipped by 4.2 per cent.
America Movil ended the period with 278 million subscribers, with its mobile post-paid base up 7.2 per cent year on year, though its prepaid base dropped 3.4 per cent.
It added 1.6 million post-paid subscribers in the second quarter, mainly from Brazil, Mexico and Austria.Subscribe to our daily newsletter Back