Q2 2021 America Movil SAB de CV Earnings Call

Good morning, My name is state all of your conference operator today at this time of who'd like to welcome everyone to the America Mobile second quarter of 2021 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.

If you would like to ask the question. During this time simply press star followed by the number 1 on the telephone keypad. If he would like to withdraw the question that's of the county. Thank you now I will turn the call over to MS. Daniela Lecuona, the head of Investor Relations.

Thank you good morning, everyone. Thank you for joining of Gray work near to the sculptors second quarter financial and operating results.

Each of US on the line third on the enhanced needle who's the cognizant on somewhere in the.

We are full and thorough set of inculcate Neil.

Thanks, Daniel Good morning, everyone.

Thank you for being in.

The growth Carlos is going to make a summary of the results.

Thank you on the other good morning, everyone.

While the U S economy recovered rock the gym signing.

So on the presentation towards the latter part of the second quarter created uncertainty and confusion on the oil price collections in some segments of the financial markets.

On the yield on 3 quarters of the North for instance growth 15 basis points, which also equivalent of 50% increasing the yield.

The market book forward, the expected profit increases the emphasis by the state.

Instead of on Latin America in Congress and pleasure on the future expectations.

Moving on central banks, most of them the indices of Mexico to begin to create interest rates.

Foreign exchange volatility increased throughout Latin America.

In this context, we added $4.4 million wireless subscribers from the second quarter compared to a loss of nearly $5 million of the second quarter of 2020.

With 1 million on the solid.

$1.1 million soft the affiliate.

<unk> accounted for half of the postpaid net adds from the quarter.

Followed by last year with 200 and maybe.

9000 on Peru took over half of 34000.

Columbia of mixed with a contract at the line consequence of quarters.

For prepaid net.

<unk> total 2 million subscribers will continue the accounting for 777.

Thousands followed by Mexico, with total revenue 2000, and Brazil with clinical on the and 38 of them.

On the fusion platform within our corporate in terms of your telephone broadband accesses with Argentina, and Colombia, each contributing over 50000 guidance.

Year on year mobile postpaid attributed the fastest stacks of growth of the 10, 7%.

Mobile prepaid followed suit with 5.6% with fixed broadband coming in third.

On a 5% on Lotus.

More fixed both in basically the cash slightly less than 3% of year on year.

Revenue stock of 253 billion peso from Leslie.

And 1 of our peso from within a year before.

At constant exchange rates the February revenue increased 5.3% of year on year on.

Importantly, the effect of 1% on a sequential basis.

Moving to be noted that the second quarter of 2020, we're the 1 equal to the effects of the pandemic both in terms of commercial activity on revenue growth.

Of the details from the annual compared from maybe somewhat misleading.

But the first quarter of 2020 was largely the free of the effects of the pandemic on Capex will be a good reference in the first quarter of this year service revenue had region 1.2% from the prior year from the service revenues and more of our service revenues are both greater than pre pandemic levels.

Prepaid and postpaid more of our favorite burdens are both of the carrier levels in the half prior to the pandemic.

With prepaid revenue surging on the strength of the economic expansion in Mexico. The U S Central America Caribbean on Eastern Europe.

Prepaid revenues were up 9 on a 5% on posted 4.4% year on year.

Sure.

For the future on platform revenue of the different business lines of activity of motor trend over the last several quarters led by Fios broadband net cash increase of leverage of between 7 and 9% on.

Corporate networks, the constant corporate growth in the last 2 quarters.

Pay TV on wildland booth on both showing improving trends.

Second quarter EBITDA gain.

Given the $34.9 billion business.

The 2 pointed percent decreasing number of different times from the year in the quarter.

At constant exchange rates moving.

The 11, 9% however, as referenced adjusted for recovery of these kind of.

I will begin by approximately of the second quarter of last year EBITDA.

<unk> had on even stronger performance increased from 14, 6%.

The EBIT margin worth 83, 6%, which was 0.8 percentage points more than a year before each part of the greater commercial activity.

Our operating profit.

Increased 9% to $44.7 billion business.

Depreciation and amortization charges scaled the steady at 19% of service revenues, resulting in the increase in EBITDA.

Operating profit for the rest of 17, 9% at constant exchange rates on them.

On annual basis on <unk>.

6.2% quarter over quarter.

Correcting for the carrier of East Coast referred to before the end of increase in our operating profit would have been 23, 7%.

We raised the debt net of comprehensive income in the amount of $17.2 billion business.

The foreign exchange gains of 31, 1% volume.

1.1 billion pesos.

And the gains from the financial expenses, which were $4.4 billion totals.

More than offset our net interest expense of 4 of $8.4 billion price.

Our net profit.

Profit total fully support the big on personnel from the second quarter.

More than doubling that of the year end of the quarter on the lack of strong EBITDA growth on our net comprehensive financing income.

The loss of equivalent to 55 peso cents per share of $54 cents per ADR.

Yeah.

In the 6 months to June.

Our operating cash flow allowed us to fund capital expenditures from the amount of $57.4 billion pesos.

We view of net debt in the amount of $36.9 billion pesos.

And of which were quite substantial certainly the first half of the year.

On buyback shares in the amount of 11 billion businesses. The also quite substantially.

In addition, we reviewed by pipe from cases in parts of our level of obligations.

In fact, our share buybacks the through June which.

The amount of <unk> 755, 1 million shares.

Of those 1 of each of the last several years from the center.

Our free cash flow cash distributor of trend of strong growth and we continue to check for the last 6 years because of the.

The year steady very consistent increase in free cash flow year after year for the rest of us.

Clicking over 80% in dollar terms in the period.

And finally on it.

Our net debt to EBITDA ratio from <unk>.

In this quarter, which stood at 154 times less 12 months EBITDA.

From the 1.9 times a year before so we have had the largest correction.

And the net debt to EBITDA ratio the restructuring.

Volume in the of many of 10 years.

So with that.

I'd like to open these loans DMA and profit lower the Colombian cash thank.

Thank you thank you Carlos.

At this time I would like to remind everyone in order to ask the question crash car then the number 1 on your telephone keypad.

Cost of against the moment to compile the Q&A roster.

Your first question is from Marcelo Santos from JP Morgan Your line is open.

Hi, Good morning, Thanks for taking my questions I wanted to ask about the broadband in Brazil, and Mexico. So the first question related to Brazil.

You have been losing subscribers and broadband at least when we look at on a sale of data to me and we have seen many players in Brazil growing fiber from new ways of trying to least we're seeing.

The large OE team vivo free.

These vehicles to investing fiber what are your plans in Brazil, how do you see this going through plant 2.

The best yourself more in fiber microwave maybe your people net fiber and what would be the impact of Capex.

On Mexico I, just wanted you to comment a bit on the competitive environment. Because you also saw from Brooklyn losses of the quarter. So.

If you could comment on debt would be great. Thank you.

Thank you Marcelo.

Yes, hi.

Hello.

Well the first spoken about Brazil.

As you know we have Rob.

Cable networks in Brazil, so on bleeding dunes operating the network.

So we have a very strong prime to the breakdown the announced an order to the EBIT more to speak to our customers.

You look at the.

The new sales, 60% of the new phase each and are proud of debt is 240, megabits. So we already with the network.

Yep.

So we believe that we will protect all of the HFC net by the end of the year, we will operate 70% of on the network to really deliver the speed on the market as needed.

And secondly, just looking at <unk>, 2 of whom we already have 3 medium comparison with prior up to the home.

We operate 110, new cities with <unk> technology in order to Covid.

With high risk and we do look at those Cds of 110 CV.

Pension that we are getting negotiated this quite a while price is quite relevant.

Kind of programs between the end of the year was around $5 million on home passes with the Dupont and when you look at the figures we have the leader of the phone.

Try broadband in the marketplace and non.

We have not only focus on on the.

Speed that we need to review of the speed of the market as needed on the competition is offering whereas you know we are focused on the combo play that we have.

The rollout of Wallops Mulberry on.

Net operating currently working pretty good on.

And as you know the Isps are growing pretty rapidly, but the net regions that we don't have network. When you look at the market share and where we have network, we even increased the leader leading market share so thats the plan.

Brazil.

And from Mexico.

When you look at the cost of our base of 43% of debt.

Ethernet based on <unk> already zone.

On the risk is with the ESL.

Just to give you a flavor on the first half of the year, we build 1 million home passes day with fiber and we migrate the 500000.

Customer from copper to fiber.

We went to the increase that.

Sales of construction of migration in Mexico, and as well in Mexico, the market, causing the receiving when a sector of the bundles that we agree with the stream nurses of providers of zero, we have bundled with net leaks with the Disney plus and the ratio to the relaunch of <unk> Max So.

So we are moving the customers with the fire at <unk> in Mexico.

Perfect. Thank you very much.

Thank you.

Your next question comes from the line of the murder almost from UBS. Your line is open.

Hi, good morning.

Everyone.

Now, let's discuss the base.

The prepaid and postpaid of disease.

The division between mobile clients validates a lot of prepaid net of each separate Brazil first day of lot of Postbank, but.

It's just how they see the largest thousands of range yes.

The prepaid postpaid mix, how the seabed Les now can start in January of <unk>.

Net income.

The market had a lot of of Disconnections per day.

The dynamic how they see the prepaid playing out in the second half of plenty of work. Thank you.

Yeah.

Alright.

We don't hear you so well with all of you are talking about Mexico, or Brazil, but I can tell you of that.

My view.

Of the pandemic.

On the pandemic the sites.

A lot of people are using more on more and become more digital and of course, we have some disconnections.

Last last year in free space for a competitive <unk> today, we have more free to paid subscribers on what we have on last year before the disconnection. So people start to reconnect again on the start to use more of our IP, Mexico I'm talking about Mexico, the IPO in Mexico.

The higher than the first quarter of last year. So people is using more people is connecting.

And you'll see more data.

That's the model is what the web banking in the postpaid the peaceful leases still the leader be the worries about them.

The pandemic David on line to get there.

Like something.

Like can be Levered month's product, while also from people moving from postpaid to be these days, but we are seeing they are using.

Total sorbate vessel in Prepays on phosphates, all around Latin America, we're seeing the same.

Sure.

Anything else.

Yes, yes, well first of all thank you for hearing that was my question exactly just a quick follow up.

But if you announced the debt is discuss specifically, which other regions. The theme there is more potential for prepaid growth specifically prepaid growth. Thank you.

Yes.

Thank you.

The 7.

Sure.

For the prepaid the grow of being I think.

Of Colombia, we're growing in prepaid on Central America, we're growing also in prepaid on the Dominican Republic resonating well.

The Eastern Europe also.

We're growing in the prepaid side, so all of our owners.

The Pip volume.

Sometimes people Boston, 1.2 capex commitment every month.

And the year.

Moving to our prepaid platform of our great team Dr Bejar, having <unk> on human when on the day vessel.

We're okay on that.

That's very helpful. Thank you very much and have a good day.

Thank you.

Again to ask the question. Please press star 1 on your telephone keypad again Thats Star 1 on your telephone keypad. Your next question is from Alejandro the loss share from BBVA. Your line is open.

Hi, Good morning, everyone. Thank you then the match for taking my question.

Easily NAV.

Significantly increasing.

The pace of share buybacks recent months.

And even before reaching the desired level of leverage so.

Should we expect an increasing amount of capital distributions to shareholders. Once you reach your tier 1 thing cash cash net debt to EBITDA on <unk>.

Complete the sale of <unk>.

Verizon.

On the general body.

Reaching your level of staff during the.

Kind of level of soft class of capital distributions to shareholders. Thank you.

1 other.

The court.

You mentioned the <unk>.

On the overview.

A moment ago was the recall actually very good cash flow in the first half of the year on <unk>.

That allowed us to pay the yearly provisioning of.

All of the.

And the other would be range of constant from the operation of this is before voting on.

Of the proceeds from the platform.

Or what.

Whether we might end of having with the towers, So I think that the double.

Of our gave us confidence.

We were very much on track.

Mark.

The move it to our desired levels of revenue.

The date on that longer flow I think the.

Absolutely the the thinking of the company per day.

We will be reaching out to our loans.

We are confident that the.

2 things I mentioned on the bolt platform on the.

The towers.

And that's still on track to close the year.

And we've got the ended up moving.

Maintaining our cash flow allows us to.

The.

On the share buybacks.

The word with kind of flow.

Okay. Thank you very much.

On June.

Your next question is from Carlos <unk> from GBM. Your line is open.

Hi, Thank you good morning, I have 2 questions if I may the.

First 1 regarding capex.

The first 6 months of 2021, essentially down versus the last year.

Does this imply that it will pick up significantly during the second half or has something changed there.

On the second 1 in terms of regulation in Mexico, and just being the public consultation on regarding the potential wholesale.

Regulation for great for total mixing certain municipalities.

I'd like to understanding this can lead to.

Perhaps the authority.

The granting gel makes them think of your line.

In those areas. Thank you.

Well on.

On the Capex side.

We have our bucket of.

The 8 billion.

<unk> growth.

With the <unk> more 5% lessor, where in that range and we.

We are on track for the first 6 months we are.

And on budget.

We are not increasing anything else.

The <unk> says about the fiber to the home in Brookdale fiber to the home in Mexico. We have also on lots of fiber to the home all around Latin America everything is in.

Moving.

In these buckets, so that's more or less on telmex.

The.

We are on pay TV.

I hope we can get it.

A lot of guidance that the the <unk> the same.

The.

The that theres going to Dave on the TV. So I hope that we can have the PV sales mix for this year. So.

As we said all the waste.

Maybe not in the world.

Company from company that doesn't have.

Pay TV <unk> TV.

I hope that we can get because the pay TV license this year.

Do you think it's reasonable to think that those profit related burden on necessary.

Alright.

The thing so I know not necessarily is related to that.

The.

We have been carrying debt.

Okay.

The pay TV for maybe 10 years now we're asking for the breakdown of our more than that so I hope.

Here, we can David.

Great. Thank you.

Thank you.

Your next question is from October Arturo Langa from <unk>. Your line is open.

Hi, Good morning, Thank you for taking my question.

Just 1 I wanted to see if you can provide any more color regarding Colombia on what youre seeing there from.

The launch of once the operation.

Just to get the sense, how aggressive do you perceive them to be right now.

What are you what is the base case that we should be working with the should we expect something like on AT&T on them to Mexico, maybe on 1 period. The Chile is that or wouldn't tell from integrated was that like your working assumption or do you expect something much much.

Much less aggressive that would be very helpful. Thank you.

I cannot compare what they do AT&T, Mexico or the other 1 thing to the team there or in Peru, the what.

I think 1 per day in Columbia is very aggressive.

The brands that our plants are very aggressive what.

I think it's not only aggressiveness margin to have a good network of good branding with US was playing from.

From Barrington.

Customer care centers, good distribution network, the first of a lot of things the.

The.

The.

Hum.

I would offer okay on customers, we have a very low the NPS.

In Colombia deepwater for Pharos, so of <unk>.

Of course.

The strong competition there.

The other the competitors 1 telefonica.

On the diesel, but we feel comfortable we're investing there in the net worth we're having to move the quality there and the convergence is very important for us we have been putting a lot of.

Of our subscribers in the play so.

I remarked on ice very solid the big competition is the.

Strong competition.

Both comparative periods were competing.

Again, good competitors, but we feel that the wearing a good position on Colombia.

Thank you Daniel.

Okay.

There are no further questions at this time I will now turn the call over to Mr. Daniel Hajj for final remarks.

Yes.

Okay, well so.

Sure.

Our short the quality.

Thank you everyone.

The.

Sure.

The review want to add something Carlos or.

Thank you. Thank you. Thank you very much thank you.

This concludes today's conference call you may now disconnect perfect.

Okay.

Okay.

Alright.

Yes.

Okay.

Okay.

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