América Móvil Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 14, 2024

There are 12 speakers on the call.

Operator

Good morning. My name is Candice, and I will be your conference operator today. At this time, I would like to welcome everyone to the American Mobile 4th Quarter 2023 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 I would now like to turn this conference call over to Ms.

Operator

Daniela Lavonka, please go ahead.

Speaker 1

Thank you. Good morning, everyone. Thank you for joining us today in our 4th quarter Operating and financial review. We have on the line Mr. Daniel Hajj, CEO Mr.

Speaker 1

Carlos Garcia Moreno, CFO and Mr. Oscar Roncalcay, COO.

Speaker 2

Good morning, everyone. Welcome to America Movil's 4th Quarter of 2023 Financial and Operating Report. Carlos Garcia Moreno is going to make out the summary of The results, Carlos?

Speaker 3

Thank you, Daniel. Good morning, everyone. Well, the Q4 of 2023 turned out to be an extremely volatile one with interest rates surging in the 1st month of the quarter, that's October, to record highs not seen in over 16 years. This was in continuing with the trend that began early in the Q3 as inflation pressure brought about new increases in reference rates by the Fed. The yield on 10 year treasury notes, which have stood as low as 3.75% in mid July, showed up to 5% in exactly 3 months.

Speaker 3

But then things tank, new inflation readings appeared to be softer and the Fed put out the message that no new action On reference rates was expected for at least the remainder of the year. Huge rally in interest rates followed with the 10 year treasury yield plummeting back to where it had been in mid July. We added 3,900,000 wireless subscribers in the 4th quarter, of which $2,700,000 were posted clients. Brazil contributed with 1,800,000 new contract clients, while 329,000 came from Austria, 124,000 from Argentina and 190,000 from Mexico. The prepaid platform Registered new additions of 1,300,000 clients in the period with Colombia Gaming, 456,000 Mexico, 308,000 Argentina, 278,000 and Central America, roughly the same amount, 269,000.

Speaker 3

On the fixed line segment, We obtained 386,000 broadband accesses. Mexico was the leader adding 155,000 accesses followed by Brazil with 50,000 and Argentina with 51,000. Looking at the base, The postpaid base was the more dynamic one, increasing 7% year on year, followed by fixed broadband accesses, which were up 4.1%. Prepaid subscriber base rose 1.2%, while pay TV access has fell 1.8% year

Speaker 4

on year.

Speaker 3

At constant exchange rates, Service revenue was up 3.7%, in line with the pace registered in prior quarter, whereas adjusted EBITDA reaccelerated to a 4.6% refilling in the quarter. So we basically maintained the pace that we had on service revenue from the 3rd quarter, And we managed to reaccelerate adjusted EBITDA to a 4.6% breakeven. Mobile service revenue expanded 4.2 percent much in line with the prior quarter and that's on the fixed line Platform grew 3.0%, continuing the accelerating trend of sales throughout the year. This was the 5th consecutive quarter with positive growth on both platforms and ensure that for the full year 2023, revenue increased on the 2 platforms, mobile and fixed. Mobile service revenue growth remains stable in Mexico at 4.5%, whereas in Brazil it slowed down from the prior quarter to 7.1%.

Speaker 3

In Central America, mobile service revenue growth accelerated to 10.7% that you can see in the chart. Revenue from copper networks led the way in the fixed line platform, expanding 8.1% from the year earlier quarter, followed closely by broadband revenue that posted a 6.6% increase. Pay TV revenue declined slightly 1.1%, It's smaller decline in over a year. Corporate networks revenue growth was strongest in Eastern Europe. Again, you can see this on the chart, 30.2% in Western Europe, Colombia 21.6%, Ecuador 19.5% and Mexico and Peru, which was slightly more than 14% each.

Speaker 3

In Central America, it accelerated to 6.6% Having posted every quarter over the last year, started growth risk than the preceding one. Now importantly, Argentina has gone through a period of high inflation in the last several years. Since 2019, it has been subject to the accounting guidelines applicable to capital inflationary countries with all the accounting variables expressed in real terms at constant Argentine pesos. For consolidation purposes in our financial statements, with no other economy considered as inflationary within America Movil. Those Argentine figures expressed in constant Argentine peso terms at the prevailing process at the end of period must be converted into Mexican pesos at the exchange rate observed at the end of the period, the IFRS rules.

Speaker 3

Given the magnitude of the Argentine peso depreciation, The application of the above mentioned loan generates unusual effects. In particular, as you can see on the slide as well, Revenue actually decreases by MXN 3,700,000,000 when Argentina is included in our results And EBITDA is also reduced by MXN1.4 billion. We have completely unusual and counterintuitive where by the inclusion of Argentina does not lead to adding A small amount or a smaller amount than what we had before, it actually leads to a net decline in revenues and EBITDA. Again, this is 30 IFRS rules that we are subject to. Other than the above mentioned unusual accounting effects, the inclusion of Argentina generates ARS 8,000,000,000 in foreign exchange losses and overall results In an ARS 8,000,000,000 downward impact on net income to ARS 16,800,000,000.

Speaker 3

So in the absence Argentina, we would have posted MXN 28,000,000,000 in net income, MXN 6,000,000,000 net income and the decrease of Argentina goes down. So that's basically what we had cash flow wise, our net debt increased by ARS21 1,000,000,000 and it complemented our Operating cash flow and it helped us cover capital expenditures in the amount of ARS 156,000,000,000, Shareholder distributions totaling ARS 40,000,000,000 of which ARS 14,000,000,000 were share buybacks and ARS 11,800,000,000 in labor obligations. So that's the summary and I would want to pass the floor back to Daniel.

Speaker 2

Yes. Thank you, Carlos. And I think we can start now

Operator

first question comes from the line of Vitor Tom Itau of Goldman Sachs, your line is now open. Please go ahead.

Speaker 5

Hello, good morning all and thanks for taking our questions. Two questions from our side. The first one would be on the CapEx side. If you could give us an update on your plans for CapEx and if you plan to maintain that 2022, 2024 CapEx envelope of $24,000,000,000 after some higher CapEx in 2023? And the second question from our side Would be on Colombia, if you would have any comments on recently announced regulatory changes in Colombia and on how that might affect your strategy for that country?

Speaker 5

Thank you very much.

Speaker 2

Well, the first question, if we look the last 3 years, 2021, 2022 and 2023, we invest around $25,000,000,000 So What we do with this $25,000,000,000 we do a lot capacity in 4.5 gs. We do 5 gs in a lot of countries. Let's say, in Brazil, we have more than 200 cities with 5 gs. In Mexico, more than 120 cities. And all around, we are doing 5 gs where we have we buy spectrum in these last for data.

Speaker 2

We do home passes, a lot more home passes all around Latin America. We changed our copper, old copper. We do a lot fiber and we do also fiber on greenfields. And in the B2B, we increased our capacity, more data centers. And we're growing revenues, very good revenue growing in B2B.

Speaker 2

So we are I think we are in a very good shape right now with all the investments that we been doing the last 3 years and the last 5 years because we have been investing this amount of money. So what we're seeing this year is that we have the capacity to reduce the CapEx for this year. And what we have last year of $8,600,000,000 of CapEx, we are going to reduce this year for $7,000,000,000 to do $7,000,000,000 on CapEx. That's what our budget give us. We still want to be doing and growing in every So in 5 gs in some countries where we don't have.

Speaker 2

And with all of that, the CapEx that we have for this year €7,000,000,000 So a good reduction from last year is the CapEx that we projected for 2024. In Colombia, we have some changes in the regulatory side. We don't like to have more all the countries are taking out regulatory measures Because what they want is investments. And in Colombia, we're having a little bit more regulatory Obligations to do, but well, Colombia, we're going Still invest, we're reviewing very deeply how they are going to hit us. And but We are still maintaining our investments in Colombia and growing.

Speaker 2

We get The frequencies in 5 gs last year, we're going to put 5 gs in this year. And I think the competition is strong, a lot of promotions, Things happening in the market, so we are still very strong in Colombia, and we're going to still invest what we need to invest there.

Speaker 5

Very clear. Thank you very much.

Speaker 2

Thank you.

Operator

Our next question comes from the line of Walter Piecyk of LightShed. Your line is now open. Please go ahead.

Speaker 6

Thanks. The mobile ARPU growth has been pretty steady in Mexico. I'm curious if that can sustain going forward. Also, I see Brazil had some growth. And on Colombia, are there lessons learned there that Things that you're doing in Mexico and Brazil to, I guess, either increase usage or otherwise get people on postpaid, whatever the factors are that are driving that ARPU growth that

Speaker 2

Well, first in Mexico. In Mexico, we're growing our ARPUs Like 3.14 percent more in prepaid than in postpaid. And It's related. We had an increased prices in Mexico. Our customers are Sometimes upgrading our plans and that is what's giving us all contracts in new and higher plans with 5 gs.

Speaker 2

So 5 gs It's helping us to increase the ARPU in Mexico. And well, that's what people is using more data. So that's what is happening. So 3.1% increase in ARPU. I think it's good because in Mexico, we have the highest In Colombia, what is happening the last 2, 3 years is a lot of competition With all the new competitors are giving a lot of data in their plans, so What is happening is that with all these data, you need to do better plans also.

Speaker 2

And sometimes our customers are downgrading because they have less rent with more data on their actual plan. So but I think that's Already finished. I think it's been finished since mid of last year. And I hope that this year we can increase in Colombia ARPUs. And in Brazil, in Brazil, we're doing very good In ARPUs growing 7%, increasing our postpaid base growing a lot machine to machine also doing good in corporate and well that's We already consolidate all the subscribers of Oi.

Speaker 2

I think it was very good the way we consolidate. We are gainers in number portability, so we're gaining market share in Brazil.

Speaker 6

Thanks. And then, for the CapEx, the 8.6% that you mentioned, I think a portion of that, I guess, is How you would describe purchase of intangible assets, I'm not sure if that's spectrum or software. So when you think about the 86, What's the general mix of spectrum or software versus true telco infrastructure or fiber? And then is the reduction from 86 to 7 really just the drop off of just not having spectrum or intangible asset purchases? Or is there you could just give a little bit more detail on the elements of what's in the 8.6% and the 7%?

Speaker 6

Thanks.

Speaker 2

I don't have exactly the detail on that. But I think On the spectrum, we already get the spectrum. What we need, I think the only thing that we have for this year is to renew The spectrum of Ecuador and maybe 2 or 3 other countries, small countries on the spectrum, but Argentina, Mexico, Colombia, Brazil, we already get all the spectrum there. So the reduction that we're going to have this year It's in what I already said, it's wireless infrastructure, fixed line infrastructure, transport networks, IT. IT, it's going to be more or less the same for transport because we already do we have been putting, let's say, fiber to the node, Photonico also, we already do all the photonics.

Speaker 2

That means all the new technologies For the backbone and transport. So all of that, we already do big part of that. So allow us To reduce the CapEx on new sites, 5 gs sites, home passes, greenfield and brownfield, Because we change a lot of our copper that all copper that we have. In the variable, there's part in the CapEx that is variable means the same depending on the sales that you have. And that will be more or less the same Because we think that we still can grow this year as we grow last year.

Speaker 2

So Even we have a better budget for broadband fixed broadband for this year than for last year. And in spectrum, as I said, the big thing that we have For this year, it's more on Ecuador to renew the spectrum on Ecuador. So the 700 megahertz we buy it in that we bought in Colombia and Argentina was In 2023, Mexico, we already have before and Brazil already. So the year, we don't see any important spending on the spectrum besides Ecuador for this year. So All of that allow us to reduce the CapEx to €7,000,000,000

Speaker 6

Okay. Thank you. If I could get one more, just And if not, you can just move on to the next caller. But Telecom Austria, is this really an essential asset to keep in the if you think about the longer term, if you have an opportunity perhaps to exit that market and remain focused in Latin America, Just give me your refresh thoughts because obviously revenue is not growing there on the mobile side. So just curious your thoughts of the importance of Telecom Austria going forward?

Speaker 2

Well, I think Telecom Austria came with all the Eastern Europe countries, and I think we're growing good in all these countries. Look, these countries are more or less the same size as Austria, we're growing very good. And I think we can grow a little bit more on Austria. No, we don't want we want to stay with the company. We bought some shares, I think 8% more last quarter.

Speaker 2

We already have like 60%, if I remember exactly, 59. Something percent. We used to have 51%. So We're increasing, and we feel very comfortable, very good cash flow company.

Speaker 3

Carlos? I think it's important also, Walter, right, to mention that the country has been fully deregulated After having been subject to a symmetric regulation for about 30 years, I'm telling you a bit what Daniel is mentioning, they want to drive more investment into I think that there's a lot to be done still on the fixed line side. On fiber, is still a lot to grow on fiber. But it's a very good market. B2B is excellent.

Speaker 3

We are providing A lot of services not only into Austria, but also out of Austria, into Eastern Europe and into Germany, for instance, which is very important and has been growing for pricing as well. So I think that there's many very positive things that we can say about the overall investment in Europe or Austria.

Speaker 7

Okay. Thank you.

Speaker 3

Thank you.

Speaker 4

Thank you.

Operator

Thank you. Our next question comes from Marcelo Santos of JPMorgan. Your line is now open. Please go ahead.

Speaker 7

Hi, good morning. Thank you for taking the questions. I have 2. The first question would be on Mexican Broadband. Could you talk a bit more about the nature of the strong print in Mexican broadband ads?

Speaker 7

What is more on higher gross ads or lower churn? Is there a regional angle, some areas growing faster than others? So just wanted to understand a bit more this very good broadband adds in Mexico. And the second question is on CapEx. Very clear that the CapEx for this year should be $7,000,000,000 Is this a good indication for the years to come?

Speaker 7

Do you think that is a sustainable level for the coming years around SEK 7,000,000,000? Thank you.

Speaker 3

Yes. About Mexico program, as we mentioned before, we've been Pushing pretty hard the migration from corporate to fiber. And now 81% of the customers are already connected with fiber, 81%. So we really cover all the customer base with fiber to the home. Secondly, we've been Launching in the market are very, very unique packages with speed, symmetrical speed That brings value to our customers.

Speaker 3

And secondly, we did some packages that include streaming video platforms included in the broadband has been very well accepted in the market. So and another part is that we changed all the processes Installation and repair to have a better customer experience in Mexico is why we got a very good net apps We believe that we will still continue to getting good proportion of the net adds this year.

Speaker 2

And on the CapEx, it's too early to say something right now. I think we're going to do the EUR 7,000,000,000 I think for next year, We don't see also big spendings on the spectrum also. So And let's see with all these technologies, new technologies that we have been putting all the digitalization, I think we're this year in very good shape. I don't know for next year, but What I can tell you is that we have the best network by far in Latin America, all around Latin America, and that gave us a good America and that gave us a good advantage right now. We do big investments, good investments.

Speaker 6

Thank

Speaker 8

you. Thank

Operator

you. Thank you. Our next question comes from the line of Andrew Celas of UBS. Your line is now open. Please go ahead.

Speaker 8

I have 2 on my side. The first one is about margins in Mexico, I know you had some one time notes last quarter. But do you see the margin Ending closer to what we had in 2022 Q4 and which factors could drive this potential Thank you, Diego. Just want to know how the company is feeling about current levels of margin in Mexico EBITDA. And the second question is about Argentina.

Speaker 8

So besides the situation effect, what other factors are you guys monitoring in the country? I'm talking about broader terms here such as impact for your customers, maybe higher delinquency rates or lower frequency of the charges that we pay.

Speaker 2

We cannot hear your questions. Your line is not so good, Andres. I'm sorry.

Speaker 8

Yes. The first question is about margin. Sorry about that. But the first question is about margin in Mexico. If you look at

Speaker 2

the margin in Mexico, well,

Speaker 3

the margin in Mexico is just

Speaker 2

The same as last year, I think we have a very good margin over 40s. And I can tell you that in Mexico, it's a lot of promotions, big competition in mobile and in fixed. And what we're doing is we are really cutting cost, doing a lot of digitalization For the cost side and having good plans and that's more or less what We're doing I think we can sustain this margin for next year. We are growing in Mexico, something that it's being very good in 2023 against 2022 is our postpaid basis is starting to grow very good in 2023. So that allow us to have better customers, high ARPU customers.

Speaker 2

So that's something that is doing good in Mexico.

Speaker 3

Only to add to what Anil is sharing. I think it's important to focus on the adjusted EBITDA and MEC. If you Correct for the sale of Telmex towers that took place in the last quarter of 2022. Then the margin collected for this was 40.2%. It has increased for this year to 40.6% on that basis.

Speaker 3

So we had an increase of margins in Mexico, and I think that we will continue to increase in this fashion.

Speaker 2

And on Argentina, I don't know what's your question on Argentina.

Speaker 8

Yes. I want to know in broader terms here about Argentina, do you see some factors that we need to monitor such as impacting customer due to everything that is happening in the country, higher delinquency rates, lower frequency of the charges in prepaid. Do you see any of that? Or it's too early here to tell?

Speaker 2

Well, what we're In Argentina, I think the operations are doing good. We are growing. We're allowing to increase some prices because of the inflation. And in the we have a very good growth in the fixed broadband. In the fixed broadband, we have been growing the last 2 years.

Speaker 2

Pay TV, we're growing in the mobile. So the operations in Argentina are good and we're growing our RGUs in Argentina like 26 4%. We have 3 point we ended the year with 3,200,000 RGUs in Argentina, 4.4 more in wireless. So we are doing good. I hope That Argentina, with all these changes, goes to a better economy.

Speaker 2

And we are still investing and doing what we need to do in Argentina. So we think that Argentina is very important for us And that in the next years, maybe we can see much better economy, and we're going to be much stronger than what is today, Argentina. Super clear and

Speaker 8

Yeah. Yeah. No.

Speaker 3

No. As Daniel mentioned

Speaker 8

No. That was clear. Thanks for the thanks for the

Speaker 1

Andre, we cannot hear you. If you have We can maybe move forward with the next question.

Operator

Thank you. Our next question comes from the line of Fani Kanomari of HSBC. Your line is now open. Please go ahead.

Speaker 9

Thank you for taking my questions. The first question is that In line with your CapEx guidance, we can expect an increase in cash flow. What would be the use of the cash flow? Are you looking at deleveraging or giving it back to the shareholders. So that's the first question.

Speaker 9

The second question is regarding Chile. How long do you think it will become before Chile can become a self sustaining operations by itself? And how much equity infusion would likely be needed in Chile going forward? Thank you.

Speaker 3

Okay. So on the first question, the cash flow, As we have said, okay, now we don't expect to reduce our leverage Further, I think that we want to remain in a band between 1.3x and 1.5x net debt to EBITDA. So that's one of the objectives. We don't have anything on M and A, currently in our in the plan. So essentially, this means that whatever excess cash flow there is will be distributed back to shareholders.

Speaker 2

And on Chile, I think what the all the synergies we have been working in the The company, all the synergies has been doing very well. The operations improving and well The management. Management, we're reducing costs. We're putting a much better network. We're doing capacity.

Speaker 2

We're doing a lot of things In Chile, and we're working for the long term, and I think we can position the company together. It's a company Over $1,000,000,000 so it's big enough to compete and to be a competitive company in Chile.

Speaker 3

It is a company that has many advantages, as has been pointed out, it has some challenges as well. It's a difficult operating environment and there's plenty to do over the next 2 to 3 years. But as Daniel says, what we are focused on is the long term. And we Long term, this will be a good investment. Yes.

Speaker 3

Hi, Jose. I will add that we have the right

Speaker 4

management on page.

Operator

Thank you. Our next question comes from the line of Fred Mendez of Bank of America. Your line is now open. Please go ahead.

Speaker 10

Hello. Good morning, everyone, and thanks for the call. I have two questions as well. The first one is on the Isontel sale And it's mainly on ARPU. Do you think that the ARPUs there already should be pretty much?

Speaker 10

Or you think there is room for a more aggressive Pricing strategy, especially on postpaid. I think Daniel mentioned that that was the increase mainly on prepaid. So I was just wondering if you see room for a more aggressive And then the second one is on Brazil and maybe the mobile market as well. We are seeing Other player, for example, they gave a guidance for next 3 years of real growth, top line growth, especially through price increase. So my point is, do you think that that's the trend that at least you expect internally for Brazil for the next 3 years, like real growth on the mobile to price increase?

Speaker 10

Or you think that eventually Someone could try to gain market share and be more aggressive on price and make it a more, let's say, more challenging market, based on the expectations for Brazil for next year? Thank you.

Speaker 2

Well, let's talk about the ARPUs in Mexico. What I can tell you, Fred, is that we have the best 5 gs network. And all what we're seeing is that 5 gs subscribers are using more and are upgrading plans. And it's the trend that we're seeing all around Latin America. And as people is moving more to 5 gs, they are getting better plans.

Speaker 2

In the other side, we have a lot of competition and a lot of promotions And well, that's the other. But I think the ARPUs in prepaid, we have been doing good. Our prepaid is growing around 4%, and postpaid is growing about 2%. So All overall, it's okay. I think we can sustain that.

Speaker 2

And with the network, the quality people is choosing to move to Telcel number. Portability is doing also good. So all overall, we are doing good. But in the other side, we have big promotions from Altan and the other competitors. So that's what you see in Mexico and well, let's see how it's going to be safe for this year.

Speaker 2

And in Brazil, what I don't understand what your question is that if we are going to have real growth in postpaid is what you're saying?

Speaker 10

Yes, Daniel. Basically, I mean, one of the other players in Brazil, they already published our guidance, right, for the next 3 years of real growth That's the expectation. And that's coming mainly to price increase. So my question to you guys is, if you expect that you're seeing the same angle as these other players in Brazil are seeing? Or you believe that eventually the market could get more aggressive We're somewhat trying to gain, let's say, more market share.

Speaker 2

I think we want more market share, but We are not going to do crazy things. I think Brazil is a market where you need to do intelligent things. And If there is a possibility to increase prices, we have been increasing prices in the last year. So I think if there's an opportunity and still the inflation allow us to increase prices, we are going to increase prices, but we're going to compete and we want to have a market share. So both, we want to increase prices because The inflation and the costs requires both with the network, with the 5 gs, with the coverage, All the investments that we have been doing in the commercial side, I think we can still grow a

Speaker 4

little bit of market share.

Speaker 9

Perfect. Very good.

Speaker 10

In the

Speaker 2

side also, we are leaders in ultra broadband, leaders in IPTV. So that To do the convergence and to leaders in broadband to do all the combos that we're doing there also help us to grow.

Speaker 10

Perfect. Very clear. Thank you.

Speaker 6

Thank you.

Operator

Thank you. The next question comes from the line of Carlos LaGuiretta From ITAU, your line is now open. Please go ahead.

Speaker 4

Thank you. Good morning, everybody. The first question is based on Mexico. On the water type, if you could talk about the possibility of operating prices, If the environment allows you to do that, both on prepaid and pro pay? And the second question

Speaker 2

We don't hear you. Can you repeat that question? Because also the line is not clear.

Speaker 4

Sorry about that. I hope this is better.

Speaker 2

Yes.

Speaker 4

Just on wireless in Mexico, if you could talk about if the environment allows you to perhaps increase prices during this year, Both on prepaid or postpaid? And secondly, for Telmex, it looks like there A number of developments going on, the 2 year review of the regulatory asymmetric measures, Perhaps changes in regulation schemes in Mexico. And obviously, the recent statements by your Chairman, So if you can talk a little bit about what's going on there because the actual results of Premise In broadband, you have recovered, we're pretty good. So just what are your thoughts in terms of general that will also be helpful? Thank you.

Speaker 2

Well, in terms of the regulation, we hope that things will be deregulated. In Telmex, we have been We don't have I think no, we don't have pay TV. And if you check the market share that we have between pay TV, Broadband and fixed, I think we have around 30.6%. So I don't think they should regulate more companies like that. We expect to that they deregulate some of the measures.

Speaker 2

So It's what we expect. We only have 30.31% or 31% of the market and in the peak side. So we don't think that will become. In Mexico, in the wireless sector to increase prices, we don't know. We have a lot of customers with in postpaid with a contract.

Speaker 2

So If when they finish the contract, we can do something, but we cannot do anything until they finish their contract. We are putting in contract a lot of Ryder NewBot, we still don't think at this time, we don't think that we are going to increase prices. What we think is that we can give more to our customers to upgrade their plan right now. So it's what we are working on and give more for more. So It's the strategy that we are doing and what we are thinking for this year in Mexico.

Speaker 4

Thank you, Daniel. And a follow-up, if I may, perhaps for Carlos. I mean, first of all, congratulations on the debt issue. And I'm just wondering if you could do further BAG related beneficiary down the road, so you can help lower your cost of financing.

Speaker 3

Thank you, Carlos, and I think that We launched this program a few months ago, which is Global Peso Notes. This is basically to be sold to more local investors and international investors. I think it's done a lot of traction. We intend it to become A very, very liquid program, probably the best alternative to Nuevo in Mexico. And yes, I think that we will continue the I'd be able to bring the market 2 to 3 times a year, including the openings of the bonds.

Speaker 3

And I think that we will definitely be coming back to to the Mexican or the international market with better note at least once more this year, if not too.

Speaker 4

Thank you for that.

Speaker 3

Thank you.

Operator

Thank Our final question comes from Alexandro Azar from GBM. Your line is now open. Please go ahead.

Speaker 11

Hi, good morning. Thank you for taking my question. A quick one, and I just want to understand on Your free cash flow, the working capital, during the last 3 years, you guys have taken close to $100,000,000,000 in Working capital uses. I'm just wondering what's happening on those accounts? What's Which account is the reason?

Speaker 11

And how should we see working capital for AMX in 2024 or perhaps going forward? Thank you.

Speaker 3

No, I mean, if you'd like, we can review this separately. But I think generally, our working capital basically breakeven every year. It is very seasonal. So depending on what numbers you are looking at, You might be looking at increases in working capital because it does increase significantly during the 1st 6 or 7 months of the year And then it comes down later. So I think we have not had major increases or changes, including

Speaker 2

To add something what Carlos is saying, what we have been doing and maybe increased a little bit The working capital is that we're financing a lot of the handsets. So we are going and finance is a very good business. And what the customers, what they like is that they can buy a better handset or a 5 gs handset. So we are financing that and that's increased a little our but it's a very good business. We finance them and that will be good.

Speaker 3

The other thing to note is if you start out with 2021, Then it's a bad year because we reduced significantly CapEx in 2020 because of the pandemic. And that means that we didn't really have accounts payable that we needed new accounts So we had an issue because we did have to increase working capital in 2021 as opposed to 2020 on account of what I just said.

Speaker 11

Thank you. Thank you. Thank you. Thank you, Carlos and Daniel.

Speaker 3

Thank you. Thank

Operator

you. Thank you. As there are no additional questions waiting at the time, I'd like to turn the conference call back over to Mr. Daniel Hajj for closing remarks.

Speaker 2

I just want to thank everyone for being in the call. And thank you, Oscar, Daniela and Carlos. Thank you very much.

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Key Takeaways

  • America Movil added 3.9 million wireless subscribers in Q4 2023 (2.7 million postpaid), alongside 1.3 million prepaid net adds and 386 000 new fixed-broadband accesses led by Mexico.
  • At constant FX, service revenue rose 3.7% year-on-year and adjusted EBITDA climbed 4.6%, marking the fifth straight quarter of simultaneous growth in both mobile (+4.2%) and fixed-line (+3.0%) platforms.
  • IFRS treatment of Argentina as an inflationary economy generated unusual FX effects, reducing consolidated revenue by MXN 3.7 billion, EBITDA by MXN 1.4 billion, and net income by ARS 8 billion.
  • CapEx is guided down to US$7 billion in 2024 (from US$8.6 billion in 2023) as major spectrum outlays wane, while continued investments will focus on 5G roll-out, fiber expansion and network upgrades.
  • No major M&A is planned; the company aims to keep net debt/EBITDA between 1.3× and 1.5× and to return excess free cash flow to shareholders via dividends and buybacks.
A.I. generated. May contain errors.
Earnings Conference Call
América Móvil Q4 2023
00:00 / 00:00