Iusacell posts first profit since 2001

27 Feb 2006

Mexican mobile operator and long-distance telco Iusacell has posted a quarterly net profit for the first time since 2001. The company reported a net profit of MXP143 million (USD13.6 million) in the three months ending 31 December 2005, compared to a net loss of MXP375 million in 4Q2004. Net loss for full-year 2005 was MXP706 million, narrowed from a loss of MXP2.06 billion the previous year, on the back of a 25% hike in revenues to MXP6.51 billion. Iusacell, the country’s third largest cellco behind Telcel and Movistar, says it will focus investments in 2006 on boosting its post-paid subscriber base and use of its CDMA 1xEV-DO network, which it launched in 2005.

Last month Iusacell struck a deal to restructure all of its debt, hopefully putting an end to years of dispute with its investors. In May 2005 the troubled Mexican company revealed that creditors were insisting on immediate repayment of a USD350 million debt on which the company has failed to pay interest since June 2003. Iusacell, majority owned by Mexican businessman Ricardo Salinas Pliego, says it has reached a provisional agreement with creditors who represent more than half of the USD350 million debt, to exchange bonds for new debt. Its subsidiary Grupo Iusacell Cellular, has struck a similar agreement to restructure an additional USD416 million worth of debt. The company plans to launch the debt offer before 15 March, and hopes to free up close to USD200 million in cash in the process.

Mexico, Iusacell (inc. Unefon)