Billionaire Carlos Slim’s telecommunications giant America Movil SAB reported third-quarter profit of 2 billion pesos ($111 million) — 89% lower than a year earlier and well below expectations.
(Bloomberg) — Billionaire Carlos Slim’s telecommunications giant America Movil SAB reported third-quarter profit of 2 billion pesos ($111 million) — 89% lower than a year earlier and well below expectations.
The company said higher financing costs and a writedown from a depreciating joint venture contributed to the miss. Revenue was 203.8 billion pesos in the third quarter, a drop of 3.3% and slightly above Wall Street’s expectations.
The stock sank 4.2%, the most since Aug. 11, to 14.71 pesos per share, the lowest level in two weeks.
Weaker profits were due to “financing costs and a depreciating asset” on the company’s Chilean joint venture ClaroVTR, in which America Movil is merging its Claro assets with Liberty’s VTR. Liberty Latin America disclosed in August that it held off from funding a Chilean joint venture, leading to speculation that America Movil will take full control of the debt-laden business.
Slim’s America Movil May Secure Chile JV as Partner Holds Cash
The company said financing costs were nearly 30 billion pesos in the quarter, which includes a 12.3 billion peso foreign exchange loss due to the 3.8% depreciation of the Mexican peso and the Brazilian real against the dollar.
Earnings before interest, taxes, depreciation and amortization were 79.9 billion pesos during the period, in line with analyst estimates. Capital expenditure reached 100.2 billion pesos in the nine months to September.
The carrier added 3 million mobile subscribers during the quarter, up from the 2.2 million new users it reported in the second quarter. Net debt was 389.7 billion pesos at the end of September, up about 9% from the previous quarter.
–With assistance from Michael O’Boyle and Maria Elena Vizcaino.
(Updates with share price in 3rd paragraph, additional context on financing cost 4th and capex 6th.)
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