America Móvil B de C : Q3 2022 Transcript

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Bloomberg Transcript

Daniel Hajj Aboumrad, Chief Executive Officer

Carlos Garcia Moreno Elizondo, Chief Financial Officer

Oscar Von Hauske, Chief Fixed-line Operations Officer

Daniela Lecuona, Head of Investor Relations

Alejandro Chavelas

Diego Aragao

Carlos De Legarreta

David Joyce

Soomit Datta

Fred Mendes

Lucas Chaves

Marcelo Santos

Megan McDonald

Walter P Piecyk Jr.

Good morning. My name is Emily and I will be your conference operator today. At this time, I would like to welcome everyone to the America Movil Third Quarter 2022 Conference Call and Webcast. All lines have been placed on mute to prevent any background noise.

After the speakers remarks, there will be a question and answer session. (Operator Instructions) now, I will turn the call over to Miss Daniel Lecuona Head of Investor Relations, please go ahead.

Thank you, good morning everyone, thank you for joining us today to discuss our third quarter financial and operating results, we have on the line Mr.Daniel Hajj CEO, Mr.Carlos Moreno CFO, --.

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Bloomberg Transcript

Hi Daniela and good morning everyone, Carlos gonna make the summary of the results.

Thank you and very good morning everyone, increasingly hawkish told by the first corner from the back of continued, inflationary pressures brought about renewed increases in US interest rate in the latter half of the third quarter of the alone in space cap within your weights and in the quarter 3.33% just making a break of the 4% of used a surly that was the context of the third quarter for us. in the quarter we had a $2.9 million wireless subscribers of which 1.9 million were posted -- more than half of the new post appliance came from Brasil, we're all struck contributing -- jobs, Columbia 215,000 and Peru 155,000. Net of scholar games in prepaid amounted to 1 million with Mexico leading the way with O'Connor and 2008 followed by Columbia with 300,000 and Central American and European blocks with approximately 25% each.

On the fixed-line platform, broadband access has increased by 156,000 in the quarter, where I can be not being the main contributor and the Central American Eastern European blocks following took. Mobile posted was our fastest growing active group, increasing 11.9% year year-on-year 118 million followed by mobile prepaid that declined 8.2% to 190 million. In both cases access growth accelerated in the third quarter, on the fixed-line platform broadband access lies goes 2.1% to 31 million. While -- and PayTV axis scale 1.6% and 1.3% respectively.

The revenue appears to be on an improving plank our third quarter reveneue which decline a MXN15 billion, it was up 1.8% year-on-year which every seven years rising 3% in Mexican place. As constant exchange rates, service revenue expanded 5.9%, as mobile service revenue jumped 9.7% and fixed-line service revenue remained almost lat growing 0.2%. Year-over-year, the Mexican peso appreciative strongly disability Colombian and Chilean pesos -- and 18% respectively, and even more this is the Euro 15%. If you mean practically - disabilities dollar and the purple until the appreciation of the pesos extensive difference between -- Rome phenomenal and the content exchange rate -- is revenue goes more than 9% year-on-year at constant exchange rates, both is the pre-paid and the post-test segments, it was the fastest rate of growth of -- at least our quarters with posted revenue growth accelerating in each of the last two quarters, partly board by 5G services.

Brasil -- (inaudible) followed by Mexico on this team. You up with 9.7% and 6.9% respectively. A few percent Columbia posted is best revenue growth in third quarter and did the Central America block with 6.5%. Ecuador on improving current for several quarters.

Now, ported is 1.6% revenue increase to do. ' And if you can platform growth and revenue growth 3.4% at constant exchange rate and that of copper network increased 12.6%. Also, the fastest pace in at least at quarters, helping offset 5.4% reduction in payTV services and a 6.1% decline wireline voice revenue. Eastern Europe with American Republic and Puerto Rico where the top performers with double-digit growth and revenue growth.

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Bloomberg Transcript

Copper network was our fastest growing business line across the board with the Brazil posting at 27.7% with Columbia 14.4% and Mexico 8.1%. -- and revenue increase between 4% and 5% in both Mexico and Brazil, we often use revenue -- 18.5%. -- 2.3% per year-on- year -- 3.2 billion pesos it was an increase of 5% that constantly generate, with EBIDTA margin, which have been on improving parental year, expanding to 38.8% -- 8.6% are you before the trial and Eastern Europe with immense and raise capital growth, we can compare pretend I like % respectively EBIDTA expansion helping about a 5.7% increase in operating profit the 44 billion pesos resulting resulting them MXN18 billion net profit in the quarter, after MXN17 billion in comprehensive financing costs that were 33% below that of the prior year, mostly on a comprehensive -- losses incurred than. The increase in current and deferred taxes, as mostly to do with our current book the certain tax office a year ago which reviewed line item at the time you keep at least and that increasing profit the difference is simply increase explained that increasing profits to base --.

Our operating cash flow allowed us to fully cover, our capital expenditures by MXN105 billion in the nine months to September. The remainder to variables MXN72 billion in next announcing waiting period. So -- MXN45 billion was it's been a shareholder distributions. Including MXN21 billion share buyback, MXN20 billion labor obligations I'm thinking become pesos in the net acquisition of ownership interest coming from the acquisition of a portion of our smaller clients on one stand and detail of our increasing clarify in Cairo Panama on the organ.

I will not dare excluding initial- end of September October of 4 billion pesos equivalent to 1.39x our last 12 months EBIDTA after leases - a spin-off of future Latin America and over resulted in the publication of 29,000 -19,000 in 13 countries. But also brought about a reduction of 47 billion pesos in our net debt. As it migrated over to cities. With these the summary I will target back to you- Thank you.

Thank you Carlos, you can start with questions, please.

(Operator Instructions) Our first question today comes from Diego Aragao with Goldman Sachs. Diego. Please go ahead.

{BIO 17889908 }

Good morning. (Multiple Speaker) Better now. (inaudible) speak a little bit slowly because (inaudible)

t

Thank you. Sounds good.

So, yes. The first question related to (inaudible) if you can help (inaudible) And secondly, I would like to understand the quarter -- Thank you.

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Bloomberg Transcript

We don't understand the first question. The second question on the tax a -- is what you are asking, Diego.

{BIO 17889908 }

Yes, so the in the quarter and -- of the towers and recently.

Daniel Hajj

Okay, with the tax rate in the quarter the effective tax rate was 40% was mostly to do with the tax regime in Mexico, as you know we have a the inflation -- tax regime which in essence, we allow you only to be docked the or unquote real interest payments on the debt. So not be nominal interest rate, you can be debt but the only the real payment that is the nominal rate minority inflation. As the inflation went up and basically always matched the weights on the debt of America Movil the deductions for interest payments in Mexico has become much smaller, so that's basically what explained the situation in the quarter.

It obviously also have to do with there being a smaller profit in this quarter, but it was basically to do with this inflation and inflationary accounting, okay, there will be some changes in our setup, so we don't expect this to continue going forward on the your first question which had to do with the tablet.

I really am quite curious or maybe you can read it again, please. (Inaudible)

You have a very bad line. Why don't you send me your question via text or email? And I will read it out loud following question.

Analyst

perefct.

Our next question comes from the line of David Joyce with Barclays. David, your line is open.

{BIO 16413886 }

Thank you.

Can you please help us understand if the wireline RGU weakness was more from a macroeconomic softening, or was it from a step up in competitors offers or you just seeing your own client switch to mobile only voice video. Thank you.

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Daniel Hajj

(inaudible) Good morning. You see a very good increase in revenue in mobile and a good trend in each side, so we grow 156,000 subscribers in the paid side.

So, we have a good increase, we used to have in the first quarter and second quarter - trend in the revenue service in the big line and today we have 0.2% increase in the -- so we are increasing and I think we're doing much better. The competition is aside the competition in some countries higher than in other countries in the big side you know that there's a lot of companies that are putting tiger all around Latin America, but I think we have a good service, a good combo and we're offering mobile convergence and it's helping most to maintain and to have a better wait, less disconnections with this, we have mobile fix and broadband together in a combo I need can be most, effective is also very important we are growing also with this being less the rate on these connections on the PayTV so I can say that overall, in mobile we do very good in the revenue growth to growth and fix the trend is going better. Who growing 0.2% and we used to have negative the growth in the big size in the other quarters.

Bloomberg Transcript

Analyst

Thank you.

And could you please update us on your plans for your 5G and fire fiber rollouts where you expect to be by the end of this year and end of next year. Program, your key markets.

Daniel Hajj

On 5G and growth on fiber is what we're asking?

Yeah. How much of your plant do you expect to be upgraded by the end of this year and next year for 5G and for fiber?

Daniel Hajj

Our its -- what I can tell you that from September last year to September this year.

• this year. We have been putting around the 7.5 million houses in fibers. So I think we do a very good increase in housing in fiber. I think it's one of the highest that we have been having in the last year and it's helping us to get more speed, better quality and to have more customers.

So we are upgrading in part of this, this is upgrading our network, the other party's going to new cities Greenfield very, so that's what we're doing. So it's different in each country but that's more or less what we have been doing. In 5G, in countries where we have licenses? Let's say in Mexico, in Mexico we already have 64 cities that the main cities in 5G

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