América Móvil Powers Ahead with Strong Q3 Performance
In a quarter marked by rising oil prices, inflation expectations, and interest rates, América Móvil demonstrated its resilience and ability to adapt. During its third-quarter conference call on October 21, the company reported impressive financial and operating results that exceeded expectations.
With oil prices reaching a new peak in mid-September, the Fed's decision to increase its policy rate by 25 basis points was inevitable. However, América Móvil's strong performance in the quarter allowed it to navigate these challenges with ease. The company added 3.1 million postpaid subscribers, with Brazil leading the way with 743,000 additions. Colombia followed closely with 348,000, while Peru and Argentina also contributed significantly.
In the prepaid segment, América Móvil recorded a net disconnection of 5 million users, primarily due to subscriber-based cleanups in Mexico and Colombia. Notwithstanding this trend, the company managed to post net prepaid subscriber gains in Eastern Europe, Argentina, Central America, and Ecuador that totaled 745,000 subscribers.
The fixed line segment also showed impressive growth, with América Móvil connecting 390,000 new broadband accesses during the quarter. Brazil was the main contributor, followed closely by Colombia and Argentina. Pay TV net additions totaled 50,000 units, with Eastern Europe and Central America accounting for most of the growth.
On a year-over-year basis, América Móvil's revenue increased by 7.6% to MXN 251 billion, while EBITDA reached 40.8% margin, a 0.5% percentage increase from the previous year. At constant exchange rates, service revenue was up 5.3%, and EBITDA grew 6.7%. The company's mobile postpaid and fixed broadband accesses remain the main drivers of customer growth, increasing by 8.9% and 5.6%, respectively.
América Móvil's CEO, Daniel Hajj, highlighted the strong performance of its mobile platform, which saw a 7.5% year-over-year increase in postpaid service revenue at constant exchange rates. While prepaid revenue rose 4.3%, slightly less rapidly than the previous quarter, it was still very much in line with the prior quarters.
The company's operating profit for prepaid service revenue growth decelerated in Mexico and Brazil but accelerated in Eastern Europe, Central America, the Caribbean, and Ecuador. América Móvil reported a net profit of MXN 24 billion in the quarter, 7% higher than the previous year's quarterly net income.
With capital expenditures totaling MXN 76 billion for the nine months to September, América Móvil was able to fund its investments through its strong cash flow. This allowed it to reduce net debt by MXN 34 billion and distribute MXN 27 billion to shareholders via share buybacks and dividends.
