Mexico-based America Movil – Latin America’s largest mobile operator – has reported a 51 percent rise in net profit for the third quarter amid signs that the region is recovering from the economic slump. According to a Wall Street Journal report, the firm reported better than expected profit of MXN18.7 billion (US$1.4 billion) for the quarter thanks to strong sales growth and foreign exchange gains. The company, which operates in 18 countries in the region, added 4 million mobile subscribers during the quarter, bringing its total to 194.3 million. However, the firm’s share price dropped in response to the results and executives were cautious on the scale of the recovery. “Although there are signs of an incipient economic recovery in several countries, particularly in South America, subscriber growth has remained subdued throughout the region,” CFO Carlos Garcia Moreno said during a conference call.
Brazil, America Movil’s second-largest mobile market (after Mexico), reported the most subscriber additions during the quarter, adding 1.8 million to finish the quarter with 42.3 million. However, the growth in Brazil put pressure on margins at the unit, which saw its EBITDA margin fall to 22 percent from 22.8 percent a year ago. The US was America Movil’s second best performing market in terms of subscriber growth during the quarter, with its Tracfone MVNO adding 712,000 subscribers to reach 13.2 million by the end of September. However, CEO Daniel Hajj played down the prospects of the operator expanding further into the country. “We don’t want to own a network in the US. We are happy being an MVNO,” Hajj said.