América Móvil Reports Rapid Subscriber Growth and Strong Earnings
América Móvil, S.A.B. de C.V. (BMV: AMX) [NYSE: AMX, AMOV], a major telecommunications services provider, has recently disclosed its financial output for the third quarter of the year, demonstrating not only steady subscriber growth but also resilient financial performance.
Subscriber Expansion Across Key Markets
In the third quarter, América Móvil added an impressive total of 1.8 million subscribers. Among these, 1.4 million were in the postpaid segment, driven significantly by contributions from countries like Brazil and Colombia. Additionally, there were 468 thousand net additions in the prepaid category, principally stemming from Colombia, Eastern Europe, and Argentina.
Remarkable Financial Performance
The total revenue for the third quarter hit 223 billion pesos, with service revenue showing an upward trend of 11.3% year-over-year in local currency. This growth is partly attributed to the previous depreciation of the Mexican peso against various currencies in the region, except for the Brazilian real. Adjustments for constant exchange rates indicated a 5.5% increase in service revenue, which marks an improvement compared to the previous quarter's growth rate of 4.7%.
Mobile and Fixed-Line Growth
Mobile service revenue also reported robust annual growth rates of 5.2% under constant exchange rates, with postpaid services rising by an impressive 6.3%. The fixed-line service revenue increased by 5.9%, benefitting from corporate networks and broadband revenue, which rose by 10.1% and 7.4%, respectively.
Profitability and Debt Position
This quarter saw EBITDA grow by 11.9% in Mexican pesos, while at constant exchange rates, it rose by 6.3%. After adjusting for one-off impacts, particularly concerning tower sales, there was a 7.3% hike in EBITDA. The net profit for the company reached 6.4 billion pesos, bolstered by a notable 14.2% improvement in operating profit along with a 4.8% decline in comprehensive financing expenses.
Debt and Capital Management
América Móvil's net debt, excluding leases, was recorded at 433 billion pesos at the end of September, which translates to a net debt-to-EBITDAaL ratio of 1.34 times. The organization successfully navigated its capital expenditures, shareholder distributions, and labor commitments purely through its net financing and operational cash flow.
Positive Outlook for Continued Growth
Looking forward, the company anticipates ongoing growth in its postpaid sector into the next year while foreseeing increased demand for broadband services throughout Latin America. América Móvil is also actively seeking strategic partnerships for satellite connectivity to further enhance its service offerings in more remote and underserved areas.
Challenges and Future Plans
Despite facing heightened competition in Mexico's fixed broadband sector, América Móvil maintains a forward-looking projection with an expectation to achieve over $5 billion in free cash flow by 2025. The capital expenditure guidance for 2024 remains steady at around $7.2 billion.
Key Insights and Strategies
América Móvil's robust financial results reflect a clear strategy for sustainable growth and a commitment to shareholder returns. The company's market capitalization currently stands at a significant $51.48 billion, highlighting its strong footprint in the telecommunications domain.
Commitment to Shareholders
The company has proudly raised its dividend for eight consecutive years and has ensured continued dividend payments for 24 consecutive years, underlining its commitment to delivering value to shareholders. This is aligned with its operational cash flow, which has successfully covered distributions.
Frequently Asked Questions
What were América Móvil's subscriber gains in Q3 2024?
América Móvil gained 1.8 million subscribers in the third quarter of 2024, including a notable 1.4 million in the postpaid segment.
How did the company's revenue perform during this quarter?
The total revenue reached 223 billion pesos, showcasing an 11.3% increase year-over-year in service revenue.
What is the current debt situation of América Móvil?
América Móvil's net debt at the end of September stood at 433 billion pesos, reflecting a net debt-to-EBITDAaL ratio of 1.34.
Is América Móvil focusing on expanding broadband services?
Yes, América Móvil sees a strong demand for broadband services in Latin America and is actively exploring partnerships to enhance connectivity.
How has América Móvil performed as a dividend payer?
The company has raised its dividends for eight years and has maintained payments for 24 consecutive years, demonstrating a strong commitment to shareholders.
