Telmex posts decline in 4Q net profit as tax bill increases

4 Feb 2011

Mexican fixed line incumbent Telefonos de Mexico (Telmex) has reported a 32% year-on-year decline in net profit for its fourth fiscal quarter of the year, with the drop attributed to lower turnover and higher taxes. In the three months ended 31 December 2010 Telmex posted a net income of MXN3.39 billion (USD275 million), down from MXN4.99 billion in the same period a year earlier, while income tax for the quarter rose to MXN2.6 billion, up more than 70% against the MXN1.5 billion it paid in 4Q 2009. Earnings before interest, tax, depreciation and amortisation (EBITDA) for the period stood at MXN11.09 billion, down 9.4% in the year. Revenues meanwhile were impacted by continued declines in the operator’s fixed line voice subscriber base, with Telmex revealing that at end-December 2010 it had 15.6 million lines in operation, down by some 291,000 against the same date a year earlier. Such customer declines saw the operator generate total revenues of MXN27.96 billion, down 6% y-o-y, with Telmex also noting that turnover from data services had fallen 7.4% in the year as ‘revenues from a significant security and information technologies project were recognised in the fourth quarter of 2009’. Broadband customer additions proved a bright spot however, with Telmex signing up some 835,000 new high speed internet subscribers in the year to December 2010, bringing its total to 7.36 million.

Mexico, Telefonos de Mexico (Telmex)