Q2 2025 America Movil SAB de CV Earnings Call
Good morning. My name is Nadia and I'll be your conference operator today.
At this time, I would like to welcome everyone. To the American Mobile second quarter, 2025 conference call and webcast.
All lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question and answer session.
If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad,
If you would like to withdraw your question, please press star followed by 2.
Thank you.
Now, I will turn the call over to miss Daniela, louanna head of investor relations.
Thank you. Good morning everyone. Thank you for joining us today to discuss our second quarter financial and operating results. We have on the line with Dash CEO Mr. Call, and also Mr. House CEO.
Speaker Change: Thank you, Daniela. Welcome everyone. Uh, Carlos is gonna, uh, make a summary of the second quarter results. So thank you. Danielle, good morning everyone. Well, the second quarter was characterized by significant uncertainty associated with the carries, the US government seeks to impose on merchandise inputs.
Speaker Change: We have this uncertainty did not have much of an impact on individual activity during this period.
Carlos: The 10 year equation, not ended the first order 421 and the second quarter at 423.
Carlos: Uh, percent it did well on the value of the US dollar which During the period fell against most currencies in our region of operation.
Carlos: 77, this is the Mexican peso 5%. This will be real.
Carlos: 2.9%. This will be the Colombian Peso 2.1%. This will be chill, and peso and 8.2% versus the Euro.
Carlos: We added 2.9 Million posted clients with the field, contributing 1.4 million, followed by colon, by 9,000, and Mexico would account 20000.
Carlos: on the 3x platform, we recorded net connections of 1.1, million subscribers,
Carlos: Is connecting, approximately 500,000 clients each?
Carlos: While Columbia to 9,000 subscribers, Argentina, 251,000 and Mexico, 83,000.
Carlos: Altogether. We gained 1.7 million subscribers in the quarter between 50 and posted.
Carlos: In the fictional statement, we gained 462,000 including 231,000 in Mexico, compared to 155,000 the prior quarter.
66,000 in Brazil and 51,000 Central America.
Carlos: Both lines and 30 units declined by 15554 and 61,000 respectively. During the quarter,
Carlos: at the end of June, we had 444 million taxes, which are currently 37 million were posted, clients, and 71 778 million were fixed line. Are you use?
Carlos: Year-over-year, our post State base increased, 6.8% was the fastest growing by accident, and please board and accesses increased by 4 and a half percent.
Carlos: Book accesses constitute, our main drivers of Revenue growth.
In Mexican best of terms and our second quarter Revenue in order to connect the 4 billion pesos that's a 13.48% year-on-year increase which partly reflects depreciation over that period of the Mexican peso. This is most of the currencies in our region of operations. We're talking about a second quarter.
Carlos: Second quarter of 2024.
Carlos: A constant exchange rate. We posted our strongest Revenue performance in over a year. I think it's some report I saw that it was over 12 years, in 12 years at 7.9% increase.
Carlos: Our Revenue expansion was grow based across business lines and across countries with service rather than the growth moving up to 7.3%, as can be seen in this life and that of equipment Revenue to 12 and a half percent.
Carlos: It's important to note that practically all our subsidiaries registered faster, growth sequentially, all of them.
Carlos: On the mobile platform, both specific Revenue expanded 9 and a half percent. Also, the best result in over a year with 2 Tech Revenue growth recovering to 3.1% from 0.9% to 70% in quarter,
Carlos: Percent decline in the first quarter.
Carlos: As can be seen in this slide prepared to grow new Worlds, the growth rate of start consumption in the country which you likely bottomed in the first 4.
Carlos: And the pixel platformer corporate was revenue and revenue were up 15% and 10.1% respectively. Representing also the best performance in several quarters with Brokers that have been decelerating slightly sequentially to 8.2% on 9.8%.
Carlos: Mexico and Colombia, where the countries that have the greatest impact.
Carlos: On this sequential acceleration of Revenue growth as can be seen here in this slide.
Carlos: If that came in at 92.2%, 4 billion pesos.
Carlos: It was top 11.2% in Mexican pesos and 5.1% at constant exchanges improving sequentially from the buyer order. And I think again something to notice that even the margins were nearly flat sequentially across the board. Practically in all countries. Margining margins were flat sequential,
Carlos: Our operating profit came in at 47 billion. Pesos at a 4% increase on the year quarter as the depreciation of price of use associated with that jumped 24 and a half percent on account of the consolidation with Chilean operation and certain effects of shared with accounting methodology applicable to Argentina as a hyperinflationary country.
Carlos: Our integral Financial cost with down significantly on account of having registered 11 billion pesos in foreign exchange gains. This have to post a net profit of 22.3 billion pesos in the quarter.
Carlos: Our net. Net profit was equivalent to 37 pesos per share.
Carlos: In cash returns, I would need to fill by 7.3 billion. Pesos, in 6 months to June
Carlos: in that period, our capex amounted to 54.9 billion pesos. I will share all the distributions to 9.4 billion pesos with and that's including 8.7 billion in share BuyBacks.
And we covered 2.7 billion pesos in Labor Day.
Carlos: our net that will uh last almost every 1.66 times life, increase with the prior quarter, most on accounts of the appreciation, is the second quarter of the Mexican peso and the Euro with the Euro, the, the us as I mentioned before the
Carlos: In Castro terms. Net that actually fell. I recorded I can so that should come to a reduced letters over here letters. Uh the greater Leverage is basically on account of
Carlos: Uh, exchange rate movement.
Carlos: Okay, so with that, I will pass the floor back to Daniel, and maybe we can open it for you. Thank you, Carlos and, uh,
Carlos: Let's open the Q&A.
Speaker Change: Of course, at this time, I would like to remind everyone in order to ask a question, press star, then the number 1 on your telephone keypad or pause. Just a moment to compile the Q&A roster.
Speaker Change: The first question, go to Marcelo Santos of JP Morgan Marcelo. Please go ahead.
Marcelo Santos: Hi, good morning, thanks for the opportunity for asking, questions. I have 2. The first question is about the Brazilian mobile environment. If you could comment a bit, you had a strong performance with Revenue acceleration. Uh, I just wanted to hear your comments on on the main drivers of that and the second question would be if you could comment a bit on the recently approved regulatory changes in in the Mexican uh, Telco framework. Just wanted to hear your your your considerations. Thank you very much.
Marcelo Santos: Hi. Hi Marcelo. Well, I think
A lot of flex program has been very successful, so all overall uh uh we are doing good. Uh, customer care is doing also as we have been a good performance, digitalizing everything. Uh, and uh our NPS has been growing, very good. People is thinking of a very good service when the we talk about claro and I think that's what we need to do. It's not only price, it's not only. The commercial area is not only quality when you do all the things together, then. Uh, uh, uh, the, the market is responding, very good. So, that's what we have been doing. Uh, and, and that's, uh, what we, we have also our new bank, it's still small. But, uh, our agreement with new bank has been good, uh, and, uh, they are looking for good customers. Uh,
Marcelo Santos: Uh and uh that's also something that he has been helping us convergence, it's important. So a lot of our picks customers has also our uh postpaid or prepaid or vice versa. So all overall I think we have a very strong strong performance and we have been executing very good in Brazil. So that's more or less. What uh, you could see. I I see for
Marcelo Santos: For the next. Uh, no. No big changes on the next, uh, quarters in Brazil. I think we are doing very good in the Telecom law. What I can tell you is that the new telecommunications law and antitrust law are substantially similar to the original proposals. And by president chambong to Congress, under the new law, we will be regulated by 2 different, entities, the commission, National Auntie monopolio the new regulator for antitrust matters which will be responsible for the imposition. And revision of a symmetric regulations to preponderance and dominance agents. And the other 1 will be the commission reg. The new telecommunication is regulator will assume the powers and responsibilities of the former IFD and if you I can
Marcelo Santos: I can tell you some relevant uh most of some of the most relevant. Uh, changes that we see, uh, the first 1 is increasing the times. Regulators May impose
Marcelo Santos: That's when Ur potential discounts on payments for the use of a spectrum in exchange for coverage, obligations in remote areas and highways that's very good for us. Uh, the third 1, similar terms for public and private concessions for obtaining, a spectrum for commercial service. That wants something that we have a lot of questions or all the spectrum is going to be uh uh, with the similar terms.
And the for this the new obligations relating to have the identity of all users of telecommunication services for activating and maintaining activated, all the Telecom service, including mobile and prepaid so that would be a lot of work to do and uh that's more or less the the changes and and the relevant things that uh we see in the new uh, Telecom law.
Marcelo Santos: Perfect. Uh, thank you very much for the comprehensive answers. Just just 1 follow up. Uh, in Brazil, do you have any particular comments regarding prepaid? That seems to have been a big shift in Trends from first quarter to second quarter? Is there anything extra you could say on prepaid Brazil.
No, no, I think what is happening. I think in all Brazil not only for us is that the prepaid is moving to post state so it's helping us a lot on post page, uh, the prepaid what nothing nothing new. So uh, that something that we have been working prepaid and postpaid different strategies but uh, I think the same results we are doing good in both.
Marcelo Santos: Perfect, thank you very much.
Marcelo Santos: Before, uh, we don't know. So what it will be important is to follow the revenue growth in prepaid and I think in prepaid, uh, we have 10% more than 10% growth in in, in Brazil. So it's very good for us.
Marcelo Santos: Thank you.
Marcelo Santos: Thank you.
Speaker Change: The next question. Go to Gustavo, farias of UBS Gustavo, please go ahead.
Gustavo Farias: Hi everyone. Um, thanks for taking my questions. I had 2 on my end. Uh, the first 1 is if you could comment on the outlook for Mexico, had a higher seen uh economic activity, trending house uh competitive environment.
Gustavo Farias: Uh in the country especially for mobiles but also for for Broadband. Uh and my second 1 uh I was in um,
Gustavo Farias: A a lower increase in capex this quarter. Uh I wonder uh if the targets for the full year uh extends uh around 7 billion.
Gustavo Farias: Thank you.
Well, the first 1 is, yes, on capex. We are on, uh, on target. I think it's going to be, I hope less than less than 7 billion. Uh, it will be like, 6.7 6.8, what we discussed and that's the more or less what we're going to have, uh, uh, this year. So no changes on that.
Gustavo Farias: Uh, there's a lot of questions about what will be the next year and the next 1 and, uh, the, the Target that we have been having is to have the same, uh, uh, the same percentage capex to sales that we have this year to have the next 1 at the next 1. So I don't think there's going to be any change on the way. We are going to invest in the next 2 or uh, 1 or 2 years. So that's something that all, uh, a lot of people have been asking us and, uh, we have been, we have been doing a lot of investments in the last years so that will help us to, uh, reduce and maintain what we have been doing this year. So that's, uh, uh, I think a good, uh, good news for, for, for, for, for all of us in Mexico, you want to talk there? I, I don't think there's new different, uh,
Speaker Change: Er, er, when you talk about the market, there's no different, uh, commercial or promotions in Peaks, or in Wireless. I think we have the same competitors in some, some of them are more aggressive or the ones, uh, uh, less aggressive. But the competition in the market is the same as last year. This year. There's a lot of competition in in the Mexico market. And, uh, I think, uh, what we discussed last time
Speaker Change: And the rebounding revenues is also helped by, we think that Mexico economy is starting to grow. Its, it's starting to grow a little bit. And what we discussed last quarter is that the reduction on revenues, uh, on prepaid mostly is because it's related to the economy, the, the acceleration of the economy and its rebounds a little bit today, and we hope that the next quarters will be, uh, uh, also better. So the competition is there, uh, we think we have a strong, uh, as, as we said, we have a strong, uh, uh, network. Uh, we have a good, uh, uh, uh, revenue and Commercial area. Uh, good promotions and, uh, good distribution. Also customer care and, and we're doing good in the peak size, we increase, uh, to 200 more than 200,000.
Speaker Change: So, it's a very good growth for for telmex and uh, we hope we can sustain and will do good in the next quarters, also. So we are accelerating, uh, uh, also in the peak size
Speaker Change: Thanks for the answers.
Speaker Change: The next question, goes to Pawnee kanamori of HSBC panty, please go ahead.
Speaker Change: This uh, first half you have paid much lower than you had paid last year. So do you expect the outflow to be lower in the labor obligations?
Speaker Change: Uh, yeah.
Hello. Know, you want? Okay, no on the patient. You're sorry. So, so that you understand, uh, part of the, of the obligation that we have, basically tell me, uh, are, uh, paid out of, uh, attention funds that I'm have. I'm part of the, uh, payment and made out of pocket, uh, and these changes throughout the year, okay? So, for the full year as a call, I think you should not expect to see any major changes directly to what we had last year. So that's that's what I would say, okay? So how much would we take out of a phone in a given quarter? How much would their pocket that can buy right in the year depending on market conditions and be like
Speaker Change: Okay. Uh okay, okay. And the second question is regarding, you know, the changing competition in different markets. We are seeing a lot of m&a happen in different markets, whether it's Argentina, Colombia, you know and or Ecuador or Uruguay are you seeing a change in competition there? Do you think the markets are becoming much more relational on a general level?
Speaker Change: but yes, as markets consolidate I think will be more rational promotions and uh uh the market will be more rational and uh, well, this is what we hope and uh we expect so I think
Speaker Change: Is the Latin Market with all the sales that, uh, the telephonic about the sales that telephonic is having are not for, consolidating the markets. Okay, in, in, in in Argentina. Yes, it's consolidating, the market, uh, in Colombia is consolidating the market in Peru, is not, we're not, it's another 1, it's a new entrance, uh, in, in, uh, in European in Ecuador. Also, it's a new 1. So it's not consolidating, so it's different in in, in each market. So but we hope that in the markets where, uh, it's consolidating will be more rational the competition. Yes,
Speaker Change: Okay, yeah, yeah, yeah, thank you. Thank you for that.
Speaker Change: Thank you.
Speaker Change: The next question, goes to Walter pic of light shed. Partners Walter, please go ahead.
Speaker Change: Thanks. I was hoping you guys could uh, comment a little bit about bait. I think if I look at this quarter compared to the last quarter in Mexico, particularly in prepaid, you did much better.
Speaker Change: When we look at the bait numbers, they did worse. Um, so I'm just wondering if that was the reason you were doing better, and then in addition, I think they this week.
Speaker Change: Um, talked about maybe getting to the postpaid market and I'm just curious kind of how you see that.
Kind of playing out. It seems like the model is interesting in terms of what I'm getting, you know, usage at grocery stores, I guess to to pay for service. So just if you can comment on on what what's going on in the market this quarter, as it relates to bait, and, and how you anticipate competing against whatever their plan to do on both on post paid.
Speaker Change: Well, I think the first thing is for us, that we have been improving. The prepaid is, as I said, I think the economy is doing a little bit better. So as the economy will do better, I think we will increase more. So, that's the first thing on bait. I cannot talk too much about bait because I don't understand their numbers. They just if they said that they have less subscribers, then, uh, they said that they have more. They are PS. I don't know. I, I really don't understand the numbers. So, it's very difficult to compare quarter by quarter with bite, but I think
Speaker Change: something that I see that I see important is, when you are a new entrance, it's easy to when you have nothing, it's easy to start to grow. But when you have a base an important base, then it's important to maintain the day. So it's more difficult to grow. It's important to maintain the base so I think it's maybe what is happening with them, but
Speaker Change: Yeah.
Speaker Change: Hello. Thank you. Walter the next question, goes to Victoria of Goldman Sachs VTO. Please go ahead
Victoria: Hello. And thank you very much for taking our questions. We have 2 from our side. The first 1 is in on Mexico's Broadband Market. We saw an acceleration in Broadband, net adds this quarter, uh, quite a bit of commercial efforts in Mexico. Could you give us a a bit more color on how you, how you see that acceleration in your Broadband volumes in Mexico, in the quarter, and on whether this commercial intensity is expected to continue into coming quarters. Also, my second question would be on the litigation provision you booked in Columbia that affected margins? This quarter. Uh could you give us a little bit more color on that and particularly on whether the provisioning already assumes, the worst case scenario with or whether there is risk of further provisioning depending on how this goes or even of provision. Just being reversed. Thank you.
Well, talking about the Mexico Province. Uh, first we increase our sales force, in order to, to be more proactive in the market. Secondly, we reinforce all the retentions areas in order to keep the, the customers with helmets. And now we have 91% of the customer base already connected with fiber. So, we are delivering a very great speeds, uh, very great quality. And another thing that has been working for us is to add into the Broadband streaming platform. So, we've been adding streaming platforms, all the major ones and has been very well received in the marketplace, so I believe it did continue. We will be seeing good figures in the next quarters.
Speaker Change: I'm on on Columbia. I think we we there's a a a case where we lost related to the content is not only for us it's for all the industry and uh what we booked is
Speaker Change: This we have to pay something right now that it's what we booked and then we have some payments to do in the next months until the end of the year. So less payments that what we booked today, but that's the case is closed. We lose its booked, it's until December. And uh, what we
Speaker Change: Already put this maybe more than half of what we need to pay and the rest is divided in the next, uh, uh, uh, months is and we have to pay every month until the end of the year. So we are not going to see a big, uh, payment, uh,
Speaker Change: Uh, the next, uh, months. What? Uh, it's a case that it's closed. It's something that we cannot reverse. Uh, but uh, it's for all the industries, what I can tell you related to the content,
Clear, thank you very much.
Thank you.
Speaker Change: The next question, go to Valeria Miranda of GBM Valeria, please go ahead.
Yes. Thank you for taking my question, uh, focusing on Columbia. How are you seeing the Dynamics with the consolidation that has been?
Speaker Change: Well, the consolidation has to be declared before as the on on, on September and September. I think it's the time where they are going to decide if they approve or they don't approve this consolidation. And if you see consolidation, uh, are always good for the markets, still. They are uh, separate companies. So we don't know what is going to happen. Uh, but
Consolidation I think it's it's it's good for the markets uh but let's see let's see what the the regulator or the the people who have to decide in Colombia is what they are going to decide. Let's see let's wait until September.
Thank you.
Speaker Change: Thank you.
Speaker Change: As a reminder, if you would like to ask a question please press star. Followed by 1 on your telephone keypad.
And the next question goes to Luca Brendan of Bank of America Luca please go ahead.
Luca Brendan: Taking my questions, I have 2 here. Uh first following up on Marcel's question. Can you please? Double-click on boss paid. Net adds in Brazil and break it down. According to net Anatel data for the past. Uh, 2 months machine to machine ads were really strong. So, uh, were there any new strategies on this front and also, you mentioned about new bank that is already helping with results. Uh it is all reported in the post page and then the second question. Can you also give us some caller on lease expenses, uh, during the quarterly expenditure at a higher rate than the revenues? So we wanted to understand how this line should behave going forward. Should it grow in line with revenues uh should grow at a higher base? Lower base, any color on? That would be great. Thank you.
Luca Brendan: But the, the, the last question, I don't understand. The first question is about the post page, uh, and uh, and machine to machine, I think machine to machine is growing also, but I don't think there's a a a a swap uh, compared to the last quarters. I think it's more or less the same uh but important you have to see revenues revenues are very important. And in both state, we are growing. I think I don't have it here and I don't have the mix on on mobile, the machine to machine. But uh, on on revenues, on on the net app, we have 1.4 almost 1
1.4, I don't know exactly how many are machine to machine and how many are there? But our revenue is growing at 9%, almost 10% in in positive, so it's very good. So a lot of this growth is the, uh, on the real cost pay not machine to machine. So, uh, but if you want the numbers, I think, uh, Brazil has the numbers, they, they report the numbers or Daniela can give you uh the numbers. But there's not a big uh uh difference between what we have been doing the last year and the last quarters. And that's what we have right now. You know, as as I said, we are
Luca Brendan: Doing very good. In, in Brazil, in in postpaid we are also doing good in prepaid prepaid and in fix also nobody is asking on Peaks and in ping on things but in PS we starting to grow. We have been 2 or 3 quarters growing our Revenue in Brazil, so they are very good news. Also uh, uh, increasing putting a little bit, putting more fiber changing some subscribers to fiber. 448 is also growing, but we need to do much more incorporate also. I think we have a a, a good opportunity uh, in speed meth in a small and medium companies and incorporate also to do. And we are focusing a lot.
Speaker Change: There. So uh, that's the second question. What what will be the second question?
Speaker Change: yeah, the second question or was on the lease expenses lease
Speaker Change: So, how do you expect this line to grow going forward? This should grow in line of inflation, or more or less in, sorry with revenues or more or less than
Speaker Change: Uh, revenues and also on the first question, if you can comment, this new bank's numbers are reported under the post paid for for AMX.
Speaker Change: Uh, it's a good question. I don't know if they have reported on on pre-save or postpaid. Maybe, when they are postpaid should be posted, when they are, they are reporting in our numbers also. But I don't know how we reported but uh I can check and and Daniela will will let you know the leases on the list, several of these agreements. I just the inflation, but in many cases they are roller based.
uh, so to the extent that we can share appreciating because the dollar then, uh, you should not expect to see uh, significant changes
Speaker Change: Perfect. Thank you for the answer application. This is greater than the inflation.
Speaker Change: Okay, perfect.
Speaker Change: Thank you.
Speaker Change: Thank you. We have no further questions. I'll hand back to Daniel hash for any closing comments.
Speaker Change: No, just want to thank everyone for gaining the call. I think we have a very good quarter. Uh thank you all.
Speaker Change: Thank you. This now concludes today's conference call, you may now disconnect your lines.