América Móvil, S.A.B. de C.V. [BMV: AMX] [NYSE: AMX, AMOV], a leading telecom services provider, disclosed its financial outcomes for the second quarter of 2024 today. The company saw a rise in its subscriber base, with significant postpaid user growth in Brazil, Colombia, and Mexico. Despite this, América Móvil posted a net loss for the quarter due to substantial comprehensive financing costs, primarily from the depreciation of the Mexican peso against other currencies.
Key highlights from the report include the addition of 2.4 million subscribers, with 1.8 million in the postpaid segment. Brazil led the gains, followed by Colombia and Mexico. The company also reported a 1.5% year-on-year increase in second-quarter revenue, reaching 206 billion pesos. Service revenue was up by 3.5% in Mexican peso terms and 4.7% at constant exchange rates.
Mobile service revenue growth accelerated to 5.1%, with postpaid revenue growing by 6.2%. The fixed-line platform saw a 4.1% increase in service revenue, with broadband revenue growth improving to 7.9%. América Móvil’s EBITDA rose by 5.6% in Mexican peso terms and 6.9% at constant exchange rates, resulting in a 40.4% EBITDA margin.
Despite these positive revenue and subscriber growth figures, the company’s comprehensive financing costs of 40.2 billion pesos led to a reported net loss of 1.1 billion pesos for the quarter. The net debt, excluding leases, stood at 404.2 billion pesos at the end of June, equivalent to a net debt-to-EBITDAaL ratio of 1.38 times.
América Móvil’s financial position allowed it to cover 56.2 billion pesos in capital expenditures, 12.5 billion pesos in share buybacks, and an equivalent amount in labor obligations. The report also mentioned the upcoming consolidation of ClaroVTR in Chile, which is expected to add less than 0.1x net debt/EBITDA to the company’s leverage.
InvestingPro Insights
América Móvil’s latest financial report indicates a resilient performance in a challenging economic environment, as evidenced by the subscriber and revenue growth. Complementing the company’s disclosed financial outcomes, InvestingPro data reveals a market capitalization of $54.64 billion, underscoring its significant presence in the telecommunications sector. The company’s Price to Earnings (P/E) ratio stands at 16.21 for the last twelve months as of Q2 2023, suggesting a valuation that may attract investors looking for established earnings stability relative to its share price.
InvestingPro Tips highlight América Móvil’s consistent dividend payments, with a notable track record of 24 consecutive years, and a current dividend yield of 2.85%. This may appeal to income-focused investors, especially considering the company’s low price volatility, which provides a level of predictability in investment returns. Moreover, analysts predict profitability for the company this year, despite two analysts revising their earnings expectations downwards for the upcoming period. For investors seeking deeper insights and additional InvestingPro Tips, there are 5 more tips available, which could further inform investment decisions. To access these, investors can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
América Móvil’s status as a prominent player in the Wireless Telecommunication Services industry is further solidified by its substantial gross profit margin of 61.62% for the last twelve months as of Q2 2023. The company’s ability to maintain profitability over this period, despite the reported net loss in the second quarter, demonstrates its operational efficiency and the potential for recovery as it navigates currency headwinds and financing costs.
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