AMXVF America Movil Sa De Cv Mexico (PK)

Mexico City - América Móvil, S.A.B. de C.V. (‘‘América Móvil’’) [BMV: AMX] [NYSE: AMX, AMOV], announced today its financial and operating results for the fourth quarter of 2023.

For comparison purposes all the figures below exclude Argentina

⁽¹⁾ Net Income / Average Shares Outstanding

⁽²⁾ 20 shares per ADR

⁽³⁾ EBITDA/ Average Shares Outstanding

Note

Upon the establishment of the joint venture with Liberty Latin America in October 2022, Claro Chile became a discontinued operation. The financial statements presented in this report account for those operations as discontinued operations.

The reported figures for Argentina corresponding to the fourth quarter of 2023 are presented in accordance with IAS29 reflecting the effects of inflationary accounting as the Argentinean economy is deemed to be hyperinflationary. All comparisons at constant exchange rates for América Móvil’s consolidated figures will exclude Argentina to ensure consistency.

Relevant Events

Increase in our Telekom Austria stake

As a result of a number of transactions we increased our stake in Telekom Austria AG to 58.4% as of December 31^st, 2023. Telekom Austria has been a top performer within the telco sector in Europe.

Shareholder’s arrangement ClaroVTR

On December 26^th, 2023 we formalized the agreement with Liberty Latin America pursuant to which the partners agreed the financing arrangements needed to carry the company forward. This calls for both parties to contribute matching amounts to ClaroVTR by July 31, 2024. In the event this is not the case the current 50:50 joint venture would cease to be so.

MxP 20Bn 10-year Sustainable Global Note

On February 1^st, 2024 we issued a 10-year Sustainable Global MXN note in the amount of 20.0 billion Mexican pesos with a 10.3% coupon. This is the largest single-tranche issue for any Mexican corporate to date, with the order book having reached 26 billion pesos.

Access Lines

3.9M wireless net adds, 2.7M were postpaid clients

We added 3.9 million wireless subscribers in the fourth quarter of which 2.7 million were postpaid clients with our net additions for the year totaling 10.3 million. Brazil contributed with 1.8 million new contract clients, while 329 thousand came from Austria, 124 thousand from Argentina and 109 thousand from Mexico. The prepaid platform registered net additions of 1.3 million clients in the period, with Colombia gaining 456 thousand, Mexico 308 thousand, Argentina 278 thousand and Central America 269 thousand.

386k new broadband accesses

On the fixed-line segment we obtained 386 thousand broadband accesses. Mexico was the leader adding 165 thousand accesses, followed by Brazil with 61 thousand and Argentina with 51 thousand. Voice access lines and Pay TV units came down by 64 thousand and 68 thousand, respectively, in the quarter.

Postpaid base +7.0% YoY and fixed-broadband accesses +4.1% YoY

At the end of December we had 310 million wireless subscribers—of which 122 million were postpaid clients—and 74 million fixed-line RGUs. This figure includes 32 million broadband accesses, 13 million Pay TV clients and 29 million land-lines. Our postpaid base was the most dynamic one, increasing 7.0% year-on-year, followed by fixed-broadband accesses, up 4.1%. Prepaid subs rose 1.2% while Pay TV accesses fell 1.8% year-on-year.

⁽¹⁾ Includes total subscribers of all companies in which América Móvil holds an economic interest; does not consider the date in which the companies started being consolidated.

⁽¹⁾ Fixed Line, Broadband and Television (Cable & DTH).

⁽¹⁾ Includes total subscribers of all companies in which América Móvil holds an economic interest; does not consider the date in which the companies started being consolidated.

América Móvil Consolidated Results

The fourth quarter of 2023 turned out to be an extremely volatile one, with interest rates surging in the first month of the quarter to record highs not seen in over 16 years. This was in continuing with the trend that began early in the third quarter as inflation pressures brought about new increases in reference rates by the Fed. The yield of ten-year Treasury notes, which had stood as low as 3.75% in mid-July, shot up to 5% in exactly three months. But then things turned: new inflation readings appeared to be softer and the Fed put out the message that no new action on reference rates was expected for at least the remainder of the year. A huge rally in interest rates followed, with the ten-year Treasury yield plummeting back to where it had been in mid-July.

With the extreme financial stress over, the dollar, which had been overbought throughout the period of stress, fell against most currencies in our region of operations: 7.4% vs. the Mexican peso, 6.3% vs. the Brazilian real, 12.1% vs. the Colombian peso, and 4.3% vs. the euro. A major exception was the Argentine peso, which had long been in a special situation of its own. As a new administration took over the Argentine government in December, a new economic framework calling for liberalization of economic policy brought about a major devaluation of the currency, with the peso losing nearly 60% of its value vis-á-vis the dollar in December alone.

Argentina has gone through a period of high inflation the last several years. Since 2019 it has been subject to the accounting guidelines applicable to hyper-inflationary countries, with all the accounting variables expressed in real terms at constant Argentine pesos. For consolidation purposes in our financial statements—with no other economy considered hyper inflationary—those Argentine figures expressed in constant Argentine peso terms at the prevailing prices at the end of the period must be converted into Mexican pesos at the exchange rate observed at the end of the period, per IFRS rules. Given the magnitude of the Argentine peso depreciation, the application of the above-mentioned norm generates unusual effects.

We have thus decided to present a version of our financial statements excluding Argentina for greater clarity. Since 2019 we had been excluding Argentina from the analysis of our revenue and EBITDA at constant exchange rates that was presented every quarter, but not from our consolidated financial statements. We will present separately our consolidated results including Argentina after the application of both IFRS 29 and the IFRS 21 norms. In the discussion that follows, all figures cited, whether in nominal terms or at constant exchange rates, will exclude Argentina.

Our fourth quarter revenue was down 2.5% year-on-year to 204.4 billion Mexican pesos, with service revenue nearly flat, -0.1%, on account of the Mexican peso having increased in value vis-á-vis all other currencies in our region of operations save for the Colombian peso: 12% vs. the dollar; 5.7% vs. the real; 8.8% vs. the Peruvian sol and 1.8% vs. the euro. Under other income we registered a 67.4% reduction mostly having to do with the booking of certain extraordinary items in the fourth quarter of 2022, in particular the sale of towers by Telmex and Claro Peru and the release of certain provisions in Puerto Rico.

At constant exchange rates service revenue was up 3.7% with mobile service revenue growing 4.2% and that from the fixed-line platform expanding 3.0%. Mobile revenue decelerated from the 4.8% pace seen the prior quarter whereas fixed-line revenue accelerated from the 2.2% rhythm of the third quarter. This is the fourth quarter in a row with growth in both the fixed-line and mobile platforms. For the full year 2023 it was the first one in three years with positive growth in both platforms.

Mobile service revenue growth remained stable in Mexico at 4.5% whereas in Brazil it slowed down from the prior quarter to 7.1%. In Central America mobile service revenue growth accelerated to 10.7%.

On the fixed-line platform service revenue expanded at a faster pace in Mexico and Colombia, going from 3.6% to 5.9% in Mexico and from 1.0% to 5.9% in the latter. They maintained their pace in Brazil and decelerated somewhat in Austria and Central America. Revenue from corporate networks led the way on the fixed-line platform, expanding 8.1% from the year-earlier quarter, followed closely by broadband revenue that posted a 6.6% increase. PayTV revenue declined slightly, 1.1%, its smallest decline in over a year.

Corporate networks revenue growth was strongest in Eastern Europe, 30.2%; Colombia, 21.6%; Ecuador, 19.5%; and Mexico and Peru, with slightly more than 14% each. In Central America it accelerated to 6.6%, having posted every quarter over the last year faster growth rates than the preceding one.

Fourth quarter EBITDA came in at 79.7 billion pesos, a 3.3% reduction in nominal peso terms. At constant exchange rates and adjusting for the extraordinary items mentioned above—i) the tower sales in Mexico and Peru, ii) the release of provisions in Puerto Rico and Ecuador that took place in the fourth quarter of 2022 and 2023, iii) the settlement in the price of Oi in the current period, and iv) the reversal of duties booked in Austria—it rose 4.6%. Our operating profit stood at 42.3 billion pesos, a 6.2% decrease from the year-earlier quarter. At constant exchange rates and adjusting for the extraordinary items mentioned before, it was up 4.6%.

Comprehensive financing costs of 5.3 billion pesos were 5.9% higher than those of a year before, with net interest costs increasing 8.2%. We obtained foreign exchange gains of 7.3 billion pesos mostly on account of the Mexican peso strengthening vis-à-vis the dollar.

We booked a 26.4 billion pesos net profit, 67.8% higher than the one obtained a year before. The net profit for the full year came in at 82.8 billion pesos, a 12.8% increase over that obtained in 2022.

When Argentina is included in our consolidated income statement the impact is as follows:

1) total revenue in the fourth quarter is reduced by 3.7 billion pesos, to 200.7 billion pesos, with net service revenue also reduced, by 2.9 billion pesos, as is EBITDA, by 1.4 billion pesos—with EBITDA adjusted down to 78.3 billion pesos. These changes have to do with the requirement under IAS21 to convert flows into the currency of the consolidating entity using the exchange rate at the end of the period, there having been a major devaluation of the Argentine peso towards the end of the fourth quarter, which significantly reduced the Mexican peso value of the Argentine revenue and EBITDA streams relative to what had been recorded prior to this depreciation. A detailed explanation is presented under appendix B.

2) Comprehensive financing costs go up by 10.3 billion pesos with the inclusion of Argentina, mostly reflecting foreign exchange losses of 8.1 billion pesos in the country arising from lease and supplier debt as well as intercompany obligations.

3) Our net profit including Argentina is consequently lower than without Argentina, declining from 26.4 billion pesos in the latter case to 18.1 billion pesos. This figure, our net income, is equivalent to 29 peso cents per share and 33 dollar cents per ADR.

Including Argentina, our net debt excluding leases stood at 385.4 billion pesos in December, with the outstanding net debt having increased by 3.9 billion pesos throughout the year. Cashflow-wise our net debt increased by 21.1 billion pesos throughout the year, helping cover—together with our operating cash flow—capital expenditures in the amount of 156.3 billion pesos, shareholder distributions totaling 40.4 billion pesos—including 14.3 billion in share buybacks—and 11.8 billion pesos in labor obligations.

⁽¹⁾ Adjusted to reflect the deconsolidation of Claro Chile on account of the joint venture.

⁽²⁾ Adjusted for extraordinary items, particularly the sale of towers in 2023 by Telmex, Claro Peru and Claro Dominicana; and in 2022 by Telmex and Claro Peru. The release of certain provisions in Puerto Rico in 4Q22 and 4Q23, and Ecuador in 4Q22. The settlement of the price of Oi in 4Q23.

n.m. Not meaningful.