America Movil 4Q net profit declines on increased tax costs

3 Feb 2010

Mexican mobile giant America Movil (AM) has released its financial results for the year ended 31 December 2009, revealing a 17.2% quarter-on-quarter drop in net income in the last three months of the year to MXN12.95 billion (USD989 million). The drop was attributed to higher income tax payments in the company’s fourth quarter; AM made tax payments of MXN7.46 billion in 4Q 2009, while in the corresponding period a year earlier the company reported a tax gain of MXN394 million. Despite the slip in the fourth quarter, for full year 2009 AM posted a net profit of MXN70.49 billion, up 18.5% year-on-year against MXN59.49 billion in 2008. Revenue meanwhile rose 13.4% in the last three months of the year, to MXN107.09 billion, driven by service revenues (up 14.8% q-o-q at MXN92.36 billion), while in the full twelve-month period AM generated turnover of MXN394.71 billion, up 14.2% y-o-y, exceeding expectations. Earnings before interest, tax, depreciation and amortisation (EBITDA) for FY 2009 were MXN158.88 billion compared to MXN138.41 billion a year earlier, while in 4Q 2009 EBITDA reached MXN40.82 billion, a 16.9% rise compared to the previous three-month period.

AM reported that in the three months to end-December 2009 it added 6.6 million new subscribers, while also noting that net adds in the year to that date were 18.2 million, bringing its overall customer base to more than 200 million. Brazilian mobile operator Telecom Americas (Claro) led the way, adding 2.1 million new subscribers in 4Q 2009, followed by AM’s US-based unit Tracfone, with 1.2 million new customers. Mexican cellco Radiomovil Dipsa (Telcel), the group’s largest operator by subscribers with 59.17 million at end-December 2009, added 807,000 in the three-month period.

Last month it was announced that Mexican billionaire Carlos Slim, who controls Mexican fixed line incumbent Telefonos de Mexico (Telmex), sister company and regional fixed line group Telmex Internacional (Telint), as well as AM, would look to consolidate the three companies. Under the proposals Slim plans to absorb both companies into AM, and will subsequently delist both Telmex and Telint from the markets on which they trade.

Mexico, America Movil (AM)