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Mexico's America Movil Q2 net profit surges to beat estimates

Published 07/11/2023, 06:47 PM
Updated 07/11/2023, 07:46 PM
© Reuters. FILE PHOTO: The logo of America Movil is pictured on the wall of a reception area in the company's corporate offices in Mexico City, Mexico, May 18, 2017. REUTERS/Edgard Garrido/File Photo

MEXICO CITY (Reuters) -Mexican telecommunications giant America Movil (NYSE:AMX) on Tuesday said its net profit surged 89.1% in the second quarter on the back of foreign exchange gains.

The company, controlled by the family of Mexican tycoon Carlos Slim, posted a net profit of 25.87 billion pesos ($1.5 billion), beating the Refinitiv estimate of 22.61 billion pesos.

Revenue fell 4.6% from a year earlier to 202.53 billion pesos, missing the Refinitiv estimate of 204.42 billion pesos.

Earnings per share were 0.41 peso, above the Refinitiv estimate of 0.39 peso.

The results would likely be neutral for the share price, according to analyst Marissa Garza of Banorte.

It was "a neutral report in operating terms and a currency effect that boosted the advance in net income a little further than expected," Garza said.

America Movil added 1.5 million post-paid customers in the quarter, driven by a hike in Brazil additions, while it lured 787,000 new prepaid customers.

In its home market of Mexico, the company said it gained 262,000 wireless subscribers in the quarter. It also added 130,000 revenue-generating units in its fixed-line segment, "marking the best performance — together with the one seen the prior quarter — in six years."

Earnings before interest, taxes, depreciation and amortization (EBITDA) shrunk 3.8% to 78.7 billion pesos.

America Movil said its capital expenditures totaled 64.4 billion pesos (about $3.8 billion) and distributions to shareholders were 5.0 billion pesos in the first half of the year, including share buybacks in the amount of 3.1 billion pesos and dividends of 2.0 billion pesos.

© Reuters. FILE PHOTO: The logo of America Movil is pictured on the wall of a reception area in the company's corporate offices in Mexico City, Mexico, May 18, 2017. REUTERS/Edgard Garrido/File Photo

Company executives have forecast investments in 2023 of $8 billion to $8.2 billion.

($1 = 17.1156 pesos at end-June)

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