América Móvil Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
July 17, 2024

There are 13 speakers on the call.

Operator

Good morning. My name is Kiki, and I will be your conference operator today. At this time, I would like to welcome everyone to the America Movil Second Quarter 2024 Conference Call and Webcast.

Operator

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. Now I will turn the call over to Ms. Daniela Lecuona, Head of Investor Relations.

Operator

Daniela, please

Speaker 1

go ahead. Thank you. Good morning, everyone. Thank you for joining us today to discuss our 2nd quarter results. We have on the line Mr.

Speaker 1

Daniel Cash, our CEO Mr. Carlos Garcia Moreno, CFO and Mr. Oscar Moncaoque, COO.

Speaker 2

Thank you, Daniela.

Speaker 3

Welcome, everyone, to America Movil Second Quarter of 2024 financial and operating report. Carlos is going to make a summary of the results.

Speaker 2

Carlos? Thank you, Daniel. Good morning, everyone. Well, the Q2 of the year got started with an important surge in long dated U. S.

Speaker 2

Pressure yields, with dosing the 10 year tenure advancing 50 basis points in April on the back of unexpectedly strong employment figures. They remained volatile throughout the quarter, closing June at 4.4%, practically the midpoint of the pension, which case readded throughout the period. The Mexican peso, which had withstood well the U. S. Interest rate volatility, weakened sharply following the Mexican presidential elections on June 2nd.

Speaker 2

After months of appreciating vis a vis not only the U. S. Dollar but also practically all the currencies in our region of operation in Mexican peso was to depreciate against Tory. We added in the quarter 2,400,000 subscribers, of which 1,800,000 were posted, with Brazil contributing roughly half, Colombia 183,000 and Mexico 99,000. The numbers you see for Austria also include telemetry, the machine to machine.

Speaker 2

In our prepaid platform, we registered 599,000 net additions with Colombia gaining 251,000 subscribers, followed by Argentina with 191,000. In the fixed line segment, we obtained 300 and 6,000 broadband accesses, including 148,000 in Mexico and approximately 63,000 each in Argentina and Brazil. Both lines and petri units registered losses in the period and were down 63 1,000 56,000 respectively. Our postpaid base increased 6% year on year with prepaid expanding 1.6% and fixed broadband accesses 4.9%. They were the 2nd more dynamic access line.

Speaker 2

Our Q2 revenue, MXN206,000,000 was up 1.5% from a year before with service revenue expanding 3.5% and equipment revenue falling 9.8%. At constant exchange rates, service revenue increased 4.7% year on year, practically same basis as maintained the prior quarter, but with slightly faster mobile revenue growth and somewhat slower fixed line revenue growth. And that helped us bring about a 6.9% increase in EBITDA. The greater operating leverage stemming from positive revenue growth on both platforms has been the main driver of EBITDA growth, obviously, coupled with strong cost controls. Mobile service revenue accelerated to a 5.1% pace from 4.9% in the preceding quarter on the back of stronger postpaid revenue growth as prepaid revenue stayed on pace.

Speaker 2

On the fixed line platform, service revenue growth decelerated to a 4.1% pace from 5.1% in the prior quarter, basically on account of corporate networks revenue, which had seen a big jump then. Broadband revenue growth continued to improve, reaching 7.9%, up from 6.4% in the first quarter and corporate networks revenue increased 7.2%. The prior quarter, it has seen a 13% jump on account of some extraordinary contracts that have been obtained. It is important to note that fixed broadband revenue, consolidated, has come to be nearly 25% higher than the combined pay TV and fixed broadband revenue. EBITDA totaled MXN 83,100,000,000 in the quarter, which represented a 5.6% increase in Mexican peso terms from the year earlier quarter and 6.9% at constant exchange rates as seen before.

Speaker 2

The consolidated EBITDA margin reached 40.4% in the quarter That was 1.5 percentage points improvement from a year before, again, on reoccurring leverage and solid cost controls. Our operating profit came in at ARS 6,000,000,000 having reached 12% to 9% from the year ended quarter, But our comprehensive financing costs reached ARS 40,000,000,000 on account of foreign exchange losses, resulting mainly from the depreciation of the Mexican peso. And because of this, we ended up posting a net loss of ARS 1,000,000,000 in the quarter. I have to say that at the end of May, prior to removing the peso, the twothree of our net debt were Mexican peso based. In cash flow terms, our net debt increased by MXN 14,300,000,000 and together with MXN 67,000,000 in operating cash flow allowed us to cover CapEx totaling MXN 56,000,000,000, share buybacks in the amount of MXN 12,500,000,000 and labor obligations for a similar amount.

Speaker 2

That's in the 6 months of June. Now our free cash flow was MXN 10,000,000,000 greater than that of the first half of twenty twenty three, partly because of lower capital expenditures, which were down MXN 8,000,000,000. Our share buybacks in the period were 4x the ones we reached a year before. We went from ARS 3,000,000,000 in the first half of 2023 to MXN 12,500,000,000 in share buybacks in the first half of twenty twenty four. Our leverage ratio came down to 1.38x EBITDA from 1.5x the prior quarter.

Speaker 2

So that's the summary, and I will turn the floor back to Daniel for the G and A. Thank you.

Speaker 3

Thank you, Carlos. Please, we can start with the Q and A.

Operator

Your first question comes from the line of Leonard O'Moss from UBS Company. Leonard, your line is now open. Please go ahead.

Speaker 4

Good morning. Thank you for taking our questions. So we have 2. The first is, can you break down the FX losses in this quarter? I know there's unusual behavior, but considering what you just said about 2 thirds of net debt being in peso based, how should we forecast this line, the FX losses in correlation with the Mexican peso?

Speaker 4

That's the first question. The second one, completely unrelated. Across LATAM, we're seeing prepaid decelerating, not only AMX, but its competitors as well. Do you expect prepaid revenue to return to growth at some point? Thank you.

Speaker 2

Well, Marcos can start with this. Okay. On the FX side, as I said, 2 thirds of the exposure, the net exposure in pesos. But the net exposure you get to after using derivatives, And the impact of derivatives is different on the results from the one that you get from the actual FX movements or FX gains or losses on the underlying debt, okay? So there's differences there.

Speaker 2

We can guide you through them, but it's not easy to predict how those movements can take place. Then there's a portion of our overall debt, which has to do with the intercompany transactions. And basically, wash all of them, we retain a certain exposure to real, okay? And in this quarter, we had a depreciation of the peso, but also with regard. And that's what resulted in this, okay?

Speaker 2

But that's basically you have a there's a little bit of noise in the results associated with the underlying deposition that's been more well the case.

Speaker 3

Well, on the second question on the prepaid decelerating, I think the prepaid is related. I mean, each country is a little bit different. But what we can see in all the countries is that some prepaid customers are moving to postpaid. So they are getting as we are moving to 5 gs and giving some more data, better handsets, so they are moving to being a postpaid customer. So that's one thing.

Speaker 3

The second very important is depending on the economy of the country. So prepaid is a lot related on how the economies are doing and spending on the people on that. So that's more or less what you have been seeing all around Latin America, people moving to postpaid, from prepaid to postpaid. And depending on the economies also, we can see if they are going to spend more or not. Also, some promotions in some countries that we are seeing all around.

Speaker 3

So that's more or less.

Speaker 2

And just to go back on the FX question, there is a very comprehensive information that is sent over to the Mexican Bolsa. It's available to all the analysts and investors. And you have all the details of the underlying debt positions and of the underlying derivatives position.

Speaker 4

Very good. Thank you very much, Daniel.

Speaker 5

Thank you. Thank you.

Operator

The next question comes from Leonard Olmos from UBS. Leonard, your line is now open. The next question comes from the water purcic. Water, your line is now open.

Speaker 6

Thanks. I guess first question just in general on ARPU growth. I know I kind of ask this every quarter, but just always want to check-in on it. It seems like it's sustaining. And again, I'm primarily interested, I guess, in Mexico, Brazil and Colombia.

Speaker 6

When you look out over 202425, do you see the trends of usage or perhaps maybe price alterations continuing to sustain that growth in the average revenue per user?

Speaker 3

Well, it's we have been seeing that for the last 2 years, Nossa, since we have been putting 5 gs and the customers are using more, doing more applications. They are moving to better plans. So that's more or less what the ARPU the ARPU is moving and increasing because 2 things. So the customer is moving to a better plan, so they are a little bit more of the rent with more for more, more data, but you pay a little bit more and then I give you more. So that's one thing.

Speaker 3

And the second is you are staying in your plan, but you are consuming more. And you are consuming more because, let's say, in Mexico, we have 5 10,000,000 more than 10,000,000 customers in 5 gs. We have been developed these networks all around, and people is using more data. So that's more or less what we have been seeing. So more things that people is doing online, they are using more the phone and that's what is happening.

Speaker 3

I hope and I think that for 2025 and 2026 or 2024 and 2025, we're going to still see that trend.

Speaker 2

Just so that you know, I think the average quarterly growth in ARPU in Mexico is 3.3% for the quarter. That's for the last 5 quarters. And in Brazil, it should be in the range of 6%.

Speaker 6

I'm sorry, say again, that you think it should be in the range of 6% going forward?

Speaker 3

No, no. It's what we had not anymore, the last 5 quarters. Yes, yes, yes,

Speaker 6

of course. And then just on equipment revenue, alternatively that didn't look as high. You report churn so we can see gross adds. So it doesn't seem like it's gross additions that's impacting that. It must be just other equipment revenue upgrades or maybe whatever accessories and things that you sell in the stores.

Speaker 6

But just if you could kind of give us a sense of what you're seeing in terms of phone purchases and do you think do you anticipate that may change with the release of the new AI services on iPhone and Samsung and other devices?

Speaker 3

What you see in, let's say, equipment revenue, the where you see that we have a decline a big decline is in Mexico, 14%. And it's really because we are only reducing 5% in units. The rest is that people is buying, let's say, not cheaper phones. So the phones have been reducing prices. And we have we used to have 5 gs phones at $300 $400 Today, we have 5 gs phones at $200 So people is buying phones, cheaper phones with the same that the phone is a very good phone, good camera, a lot of good chips.

Speaker 3

So people is looking and reviewing a little bit on more detail which phone is buying. So we have 5% decrease in units, but 14% decrease in equipment revenue in Mexico. So that's more or less what the trend and what is happening right now. People in the Dan, do

Speaker 6

you think that changes? A better phone and a cheaper phone.

Speaker 3

Yeah, because you

Speaker 6

know, understood. But going forward, there's a lot of hype interest in what Apple has recently announced. And obviously, Samsung has also added some AI features. Do you think that trend that you saw this quarter will reverse and do something different at the end of this year and into 2025?

Speaker 3

Well, I think AI is going to be very important. It's what Samsung is doing in their phones because they already have in some phones the AI application. Still with iPhone, it's only the announcement that they have. But I think that will be but at the end of the day, I think the AI application, in my view, is going to have all the phones again, not only the high end phones. The mid end phones are going to have also this application.

Speaker 3

So that's the trend. Everything starts at the high end and moving to the mid and, let's say, low. So I think, yes, the trend at the beginning will again make people buy more the high end, but as the applications moving to other phones, then people is going to choose the best phone at the best price.

Operator

The next question we've got is from Victor Tomita from Goldman Sachs. Victor, your line is now open. Please go ahead.

Speaker 7

Hello, good morning and thanks for taking my questions. I have 2 main questions from my side. The first one is if you could give an update on how you are thinking about your share buyback strategy for the second half of the year following what we understand was an acceleration in the second quarter. And my second question would be on Chile. If you could give any additional color on the competitive environments there, I noticed you cited in the earnings release that client bases in mobile and fixed have been growing over the last 12 months.

Speaker 7

So wanted to understand better how you are thinking about the commercial approach and competition in there? Thank you.

Speaker 3

Where in Chile? Okay.

Speaker 2

On the buybacks, Victor, hello. I'd say you mentioned repeatedly, typically, we pace the buybacks so that they are more closely related with our cash flow. Our cash flow is very, very cyclical, very seasonal with the first half of the year requiring a lot of working capital, which we get back on the second half of the year. That's why the second half of the year is when we make the payments of dividends. But that is also when if you look back over the years, we typically have a great amount of share buybacks in the second half than in the first half.

Speaker 2

But yes, generally, I'd say that distributions will be matching closely the free cash that the company has to the extent the company does not divert cash to M and A, which is not going to be the case. And to this extent, the company does not require any more CapEx, which is not going to be the case.

Speaker 3

Yes. And on Chile, what I think everybody knows that Chile is a difficult market. It's a very competitive market. And what happened, we start in 2022 with Liberty, and we defined a plan, 3 year plan on synergies, on reducing cost, integrations, better infrastructure. We just we closed 1 year ago a good deal with 5 gs, 4 gs, 3 gs, more coverage.

Speaker 3

We are doing a lot more redundance and fiber through all the country. We closed a capacity agreement with Onnet also to move part of our subscribers to fiber. So we have a 3 year plan. I think we are on target. We still need end of 2025, 2020 comfortable on that.

Speaker 3

On the we have put new management on the we have put new

Speaker 6

management since the beginning.

Speaker 3

We integrate the management. So we are working hard. So but it's not something that is from today for tomorrow. It's a good 3 year, 4 year plan that we have been doing. It's the same that we do in Brazil when we integrate the companies and in other countries.

Speaker 3

So we're comfortable. It's a very competitive market. And well, it's 4 players market no, 4 players in mobile, maybe more players in big. So but we are comfortable on what we're doing. And we think in the next in the future, Chile is going to be a very good country for us.

Speaker 3

We have the size right now because before doing the merge, we only have mobile revenues not so high. So today, we are more than $1,000,000,000 company. I think it's $1,200,000,000 So we can work on that. We have the size, and I think we're going to be successful in Chile.

Speaker 7

Very clear. Thank you very much for the replies.

Speaker 2

Thank you.

Operator

Thank you. The next question comes from Fani Kanumuri from HSBC. Fani, your line is now open.

Speaker 8

Thank you for taking my questions. My first question is regarding Mexico mobile revenues. It has decelerated from 5.8% in 1Q to 4% in 2Q. Is there any specific reason for this trend? And how do you expect this to trend going forward?

Speaker 8

My second question is regarding further extension on Chile. Do you have any plans to do any kind of M and A in Chile? You have stated in your capital markets say that you don't have any major M and A plans, but with Chile consolidation, do you see further any plans of M and A in Chile? Thank you.

Speaker 3

Well, first in Chile, everybody knows that Wong is in Chapter 11, and there are plants. I don't know if there's going to be M and A or not. We are open to see alternatives, but we don't know exactly what we're going to do. So as always, we are open, but we're working very strong in the synergies and all the implementations in new infrastructure, fiber, 5 gs, more capacity, more alternatives are with 1, no? So that's first.

Speaker 3

2nd, in Mexico, I think that the trend is going the revenue is declined not declining, reducing the growth. I don't know what's going to be the next but in Mexico, we are doing very good in 5 gs. I think we are the only company who has a real 5 gs network with coverage, with capacity. In postpaid, a lot of our subscribers are renewed in a 5 gs plan that it give us good ARPU there. So as Carlos is saying, it's 3.3 percent increase on ARPU.

Speaker 3

We haven't increased any price in any of the segments that we have. So it's only moving to be a higher plan or people consuming more as we are seeing. So we have also, as in other countries, a lot of competition, promotions, And we don't know exactly what's going to be on competition and promotions for the future, but we are ready to compete and we have the strong bases, good distribution network, we have good customer care people, a lot of centers, a lot of stores and very good network and very good coverage and quality. So we are ready to compete. If there's still a lot of promotions, we can compete on that and the market will be more rational, then we can also be more rational.

Speaker 3

So we are ready to compete in the future in Mexico. We're prepared, let's

Speaker 6

say, to

Speaker 8

compete. Thank you. Very clear.

Operator

Thank you. The next question comes from Luca Branding from Bank of America. Luca, your line is now open. Please go ahead.

Speaker 9

Good morning, everyone. Thank you for taking my questions. I have 2 from my side here. The first one in Colombia, we saw some developments from the main competitors in recent quarters. And I wanted to know if this is already reflecting in some way the competitive environment, if you're already seeing some changes in it and how do you expect this market to behave going forward?

Speaker 9

And then second, on Mexican for the fixed business, can you give us more color on how you're seeing competition? You have not raised prices in Telmex, but is there room for price hikes in the future in the coming quarters, years? So if you could give us some color on that as well. Thank you.

Speaker 3

Well, in Colombia, what happened in Colombia? I think in Colombia, 2 years ago, we have a new entrance that was won, very aggressive, very aggressive plans. So everybody has to compete in the market. So this competition reduces the growth and the ARPU that we have been having because people if you give more data then people sometimes prefer to reduce the plan and stay and have more data in contrary than increasing plan for more data. So it was a very aggressive entrance on 1, but we compete on that.

Speaker 3

But today is a little bit different. 1 is having some problems, and we're still competing. We increased 5 gs. 5 gs is giving us in Chile a very good customer. We have been growing.

Speaker 3

We grow more than 100,000 customers in postpaid in Chile this quarter, in postpaid. So we're starting to do better, and we're confident we have a very good company, as I told, very good basis also in Chile, good distribution, a lot of stores, good network, 5 gs. We have the biggest 5 gs network capacity, and that's what we have seen. So I think we can see more improvements. I hope we can still this trend of improvements in Colombia for the rest of the year.

Speaker 3

So that's what we're thinking to have. And Mexico, in the peaks, Oscar can talk a little bit. We are not planning to increase plant prices at this moment. So we're going to stay with these prices. And we're doing good.

Speaker 3

We are growing in the broadband and in the corporate. And we already do a lot of fiber through Mexico. So we have a good fiber network coverage, and we're growing at Mexico.

Speaker 9

Very clear. Thank you.

Speaker 3

Thank

Operator

you. Thank you. The next question comes from Carlos Leggate from Itau. Carlos, your line is now open. Please go ahead.

Speaker 10

Yes, thank you. Good morning. I have two questions on this side. The first one is a follow-up in Mexico fixed broadband. I'm wondering if you can talk about the net additions that you're seeing.

Speaker 10

It's obviously a very good volume. But I'm wondering if it's mostly migration from your copper to your fiber product or you're actually acquiring new customers as well? Perhaps Oscar can talk about that. And on the second question, just to follow-up on Chile, just to make it clear, The information that you provide is very clear, obviously, that the leverage level. But I'm wondering if there's any kind of contribution that you need to make.

Speaker 10

Obviously, now you will control the company after this debt conversion. But I was under the impression that the equity injection was actually necessary for that company, and it was relatively sizable also up to one. So I'm just wondering if what are the plans in terms of equity or CapEx for the Chilean subsidiary now going forward? Thank you.

Speaker 3

Well, Oscar can talk a little bit on Mexico. But just to clarify, the one 150,000 that we have are new subscribers. So we have a lot of our subscribers moving from copper to fiber, but 150,000 are new subscribers in the network. So Oscar can talk

Speaker 2

and You are totally right. Migration, it doesn't count as a net adds. So all the net adds are new customers. The migration, we don't count as a net adds.

Speaker 3

And we have been moving a lot of copper to fiber.

Speaker 2

Yes, 80%, 84% of the customer base is already in fiber.

Speaker 3

So people is okay. We have a good brand and we have also very good quality and support. And I think what we're aiming and trying to do is to recuperate part of the market that we used to have. So we are working on that.

Speaker 2

Yes. And another thing just to add is that we've been working the bundles of streaming video with the customers and has been very well received in the market. So we include the different add ons like Netflix, HBO, etcetera, in the bundle program has been working pretty

Speaker 3

well. And on Chile, let me explain to you. Since the beginning, when we do the merge, we make a plan. And in that plan, we incorporate some cash in the company. So we need to put cash to put equity in the company.

Speaker 3

Of course, the company needs equity. And in that plan, we think that's why we do the agreement with Liberty to put cash for CapEx and part of the debt that we put in the beginning also to be contribute as equity in Chile. That's what we decide to do since the beginning. And well, Liberty has the right to catch up all this what we all this plan, let's say, all this plan. And unfortunately, they don't catch up.

Speaker 3

They decide not to do it. And that's what we are and we are comfortable with the equity the way financially the company is going to end doing at the end of this year. I think financially the company is going to be good. And the operations that it's something that it's very important, the operation, CapEx, investments and new networks, I think, are under the plan that we decide.

Speaker 2

I think that going forward, Carlos, we don't expect any major cash injections into Chile. I think the their CapEx is going to be almost fully €400,000,000,000 by their own EBITDA. So it's going to be practically self sufficient next year or the next because the equity contributions have basically taken place. Over the next couple of

Speaker 3

years, we will be having a company that's fully sufficient, right? I think what you could see is this agreement to capitalize the company, I think at the end of 2024, we're going to have the company fully capitalized. And with all the investments in place to do and to have a very strong infrastructure, capacity, coverage, quality company, stand with a very good team in place.

Speaker 10

Thank you. That's super clear on both issues. I appreciate it.

Speaker 3

Thank you.

Operator

Thank The next question comes from Daniel Fadrill from Bradesco BBI. Daniel, your line is now open. Please go ahead.

Speaker 5

Thank you. The first one is a follow-up on the Mexico broadband business. Our due net additions were good in the Q2, but significantly lower versus the Q1? So my question is what has changed in the market from the Q1 to the second, which level is like the sustainable level going forward? And the second question is related to Brazil.

Speaker 5

Brazil was a very strong region, especially in the mobile front. The company has been presenting like an acceleration in mobile services revenues growth. My question is, do you see room for further acceleration in the upcoming quarters? And I was wondering if maybe like growth in the Q2 could have been helped by any kind of mismatch in terms of the timing of price increases. I don't know if if you are like increasing prices earlier this year versus last year and that's

Speaker 7

helping out. That's my question.

Speaker 3

Sorry, the first question was on the fixed broadband in Mexico in Telmex. But the second question, which country you are talking? I wouldn't hear you very well.

Speaker 5

Exactly. The first question is regarding Mexico RGUs that were good but lower than in the Q1. What has changed from 1 quarter to the next? And the Q2 is related to Brazil because mobile services revenues growth has been accelerating. So I'm asking if do you see room for further acceleration?

Speaker 5

And if second quarter could have been helped by any kind of mismatch in terms of the timing of price increases, like increasing prices earlier this year than last year? Those are my questions.

Speaker 3

Yes. I'm going to start on Brazil. I think in Brazil, we have a very good quarter in terms of revenue, in terms of mobile revenue, also in terms of fixed revenue, we have been increasing. I think we increased the revenue in Brazil. So it's been a good increasing revenue in fixed.

Speaker 3

So we start to see, yes, like a couple of quarters increasing broadband and growing net adds and decreasing less in TV and fixed. So that's what we're seeing in Brazil. Also in mobile, we have good increases, but there's still a lot of competition. So Brazil is very big. So you can see in some states, some places, very strong promotions, in other ones less promotions.

Speaker 3

But all overall in Brazil, it's not only price. I think we have been also controlling cost a lot. You see that EBITDA is growing and more than the revenue. So all the synergies, the investments, systems, digitalize, everything that we have been doing is giving us good results in terms of costs. Still in Brazil, inflation is at 4%, 5%.

Speaker 3

So you have to increase in some we have some cost to increase every year since that inflation. So we have been able to control that. And we are growing also in market share in mobile, and that is giving us this growth. So I think in mobile, the growth that we have been having will be great if we can sustain that and maintain that level of growth in Brazil. So for me, Brazil and not only Brazil, I think operational all overall in all the countries we have been doing good in America Mobile, Carlos has been showing, but we have been growing more than what we said and also grow reducing cost, doing synergies and increasing our EBITDA mainly in all the markets.

Speaker 3

In Mexico, Oscar, it's difficult to explain why we have been having more than 300,000 net adds in Q1 and then 150,000,000. But in my view, we're going to still grow and we are already with good fiber capacity and coverage and we're going to still grow in the broadband in the next month. So we cannot say quarter by quarter exactly how much we're going to grow, but the trend is to grow in Mexico in the broadband market. Oscar, I

Speaker 2

No, I totally agree what you say. On the Q2, we have a decrease on the productivity and installation issues because the climate was really bad in that time. So we decreased the productivity and installation. 2nd, we saw in May June a little bit of increase in churn in own collections. So we believe that, that will be solved on the Q3.

Speaker 2

Well, as Rodanil said, we see a good trend of adding net adds over the next quarter. So because we already had the fiber already deployed, We believe that we have a very unique product in the market that has been very well received. So we will catch up the productivity installation on the next quarters.

Speaker 3

And the way we see although the way I see things is we don't want to see quarter by quarter. I think maybe year, if you see year 'twenty three against year 'twenty four, I think 'twenty four all over all the year is going to be much better than 2023. So maybe 1 quarter or the other one will be different. But all overall, the trend of the year is going to be good in Telmex.

Speaker 5

Thank you. Clear.

Operator

Thank you. The next question comes from Alejandro Lavin from Santander. Alejandro, your line is now open. Please go ahead.

Speaker 11

Thank you. Good morning, everyone. Thank you for taking my question. I have a couple of quick questions. First of all, on M and A, I mean, you mentioned that you're always in general open to opportunities.

Speaker 11

So I'm wondering like what kind of geographies or assets would you be looking at? Number 2, it's more of a longer term question. I mean, we hear a lot about artificial intelligence and all the possibilities that this might enable. So what are your thoughts on this megatrend? And how do you think American Mogul can position to benefit from this megatrend?

Speaker 11

Thank you.

Speaker 2

Hello, Alejandro. I mean, I think that what we have said is we don't expect any M and A to take place this year. That's what we said in our Investor Day. I think there was a recent question on whether the new environment in Chile would call for that. We only know that this issue with Chapter 11, which I won't have been placed into.

Speaker 2

But it's not as Daniel said, I think we're always open to listening to things, but there's going to be expectation that we have had this year either we wouldn't go into any M and A so far.

Speaker 3

And the second question is on the trends. Can you repeat the second question, the megatrends on?

Speaker 11

Yes, sure. Yes, so thinking about artificial intelligence, I mean, how does the management think about positioning to take advantage of this megatrend, I guess, this trend for the next 10 years or so? How can America Movil participate in this trend?

Speaker 3

I think it's very important. I think in artificial intelligence, it's something that we have already, but it's not it's going to take some time to implement in the company. We're working on that. The first thing that we do is we're digitalizing everything internally in the company. And we are working very hard on all the data.

Speaker 3

But there's going to be a lot of AI coming to be more efficient, to know more the customer, to reduce cost, to save energy, to do a lot of things, and we're working on that to take all these megatrend that will be more efficient and productive, in the company. So there's a lot of things in AI that are coming to make us more efficient, more productive and to know more our customers. And we're working on and saving also cost in call centers, data centers. There's a lot of things that AI is coming and America Movil, of course, is working on that. And that's not something that you're going to see for tomorrow, but we are working on all these trends to put the company in a very good opportunity on saving cost and all of what I'm saying.

Speaker 11

Okay, understood. Thanks a lot.

Speaker 3

Thank you. Thank you very much.

Operator

Thank you. The next question comes from Juan Cruz from Morgan Stanley. Juan, your line is now open. Please go ahead.

Speaker 12

Thank you. And good morning. And I apologize if this was already answered. I joined late, so my apologies. Going back to the Chilean JV, I just wanted to know, now that America Movil is assuming Claro EPR, if there's going to be disclosure on the operations and financials of the JV going forward?

Speaker 12

That's number 1. And number 2, given that BTR had bonds outstanding, What are the plans with those bonds? What is the company going to do with those, if anything, as a result of the JV being consolidated?

Speaker 3

I think that when we consolidate the company, there's going to be the same information for Chile that we have for all the other countries. That's what we're going to do.

Speaker 2

And once we consolidate, the bonds will remain outstanding as they have been. And they will be serviced as any other day of America Movil.

Speaker 12

Okay. Got you, Peter. But there's no plan to either refinance those for the time being or do anything with them?

Speaker 1

No plans. Okay. Okay. Thank you.

Speaker 2

Thank

Operator

you. Thank you. We currently have no further questions. So I will hand back to Mr. Daniel Hajj for final remarks.

Speaker 3

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

Speaker 2

Bye bye. Thank you all. Bye bye.

Operator

This concludes today's conference call. You may now disconnect.

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Earnings Conference Call
América Móvil Q2 2024
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