AM net profit drops 18% after forex gains last year

23 Jul 2010

Mexican mobile giant American Movil (AM) has released its financial results for the three months ended 30 June 2010, revealing a 17.9% year-on-year decline in net profit to MXN18.7 billion (USD1.45 billion), with the company attributing the drop to extraordinary foreign exchange gains made in the same period a year earlier. Total revenue for the company in its second fiscal quarter rose by 11.9% to MXN100.9 billion, with service revenues up 10.8%, bolstered by an annual 41.6% increase in turnover from data services, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 9.4% against 2Q09 to MXN42 billion.

At end-June 2010 AM reported a wireless subscriber base of 211.3 million, adding some 4.9 million customers in the second quarter, 20% of which it said were signed up to post-paid services. The group noted that net additions were significantly higher than at the same time a year earlier; in Chile the rate was more than twice as high than 2Q09, while in Mexico, Peru and Brazil net additions were up 87.8%, 54.3% and 46.7% respectively y-o-y. Brazil meanwhile led the way in terms of the number of new customers, signing up 1.3 million new subscribers in the three-month period, with AM’s Mexican operations adding just over one million.

Alongside mobile operations, as previously reported by CommsUpdate, in January 2010 AM, which is controlled by Mexican billionaire Carlos Slim, announced plans to consolidate both of the businessman’s other telecoms companies: Carso Global Telecom (CGT) and Telmex Internacional (Telint). Having issued a tender for stock in both CGT and Telint last month, in its financial reporting it noted that by 16 July 2010 its interest in CGT had risen to 99.9%, adding that it now owns directly or indirectly approximately 94.6% of Telint’s outstanding shares and 59.4% of the stock of Mexican fixed line incumbent Telefonos de Mexico (Telmex). AM has said that it will consolidate the results of both Telmex and Telint from 1 July 2010 on the basis of the global consolidation method.