America Movil reported another small drop in revenues in the second quarter, as the stronger peso sent sales 0.4 percent lower to MXN 253 billion. Service revenue dropped 4.6 percent, while equipment revenue jumped 34.0 percent as commercial activity picked up. At constant exchange rates, service revenue increased 5.3 percent year-on-year, following a recovery from the pandemic effects a year ago.
Mobile and fixed-line service revenues were up both on an annual basis and on a sequential basis at constant exchange rates. Mobile increases were 7.2 and 2.2 percent respectively, and fixed rose 1.5 percent annually and 0.6 percent compared to Q1. America Movil attributed the growth to an improvement in prepaid revenue in Mexico and the US, as well as Central America/Caribbean and Eastern Europe, where prepaid services are relatively more important. Fixed growth remained driven by broadband and corporate services, as the pay-TV and wireline markets continued to deteriorate.
After a small drop in costs, due mainly to lower bad debt provisions, EBITDA rose 2.8 percent year-on-year to MXN 85 billion, for a margin of 33.6 percent. Forex gains led to net profit more than doubling, to MXN 43 billion from MXN 19.5 billion a year ago.
American Movil said operating cash flow was sufficient in the first half of the year to fund capital expenditures of MXN 57.4 billion, reduce net debt by MXN 36.9 billion and buy back shares worth MXN 11 billion. At the end of June, net debt stood at MXN 591 billion, including MXN 103 billion in capitalized leases.
Customer growth in the second quarter reached 4.2 million mobile subscribers, including 1.4 million in Brazil, 870,000 in Argentina, and approximately 430,000 each in Mexico and Colombia. Just over half of the net adds were postpaid, with Brazil accounting for 1.1 million postpaid net adds, helping the postpaid subscriber base increase by 10.7 percent year-on-year. In total, the company had nearly 300 million mobile customers at the end of June, up 7.3 percent from a year ago.
In the fixed market, the group gained 128,000 broadband connections. However, total RGUs fell due to losses in pay-TV and wireline, with a net decrease of 132,000 in the quarter to 80.5 million.
