Mexican telecommunications giant América Móvil reported good performance for its third fiscal quarter, with net profits up 67% year-over-year thanks to foreign exchange gains. According to its report, a foreign exchange gain of $691.34 million in the quarter led to a comprehensive financing income of $169 million (2.2 billion pesos) that contributed greatly to the sharp increase in América Móvil’s net profit.
Third quarter revenues of $14.82 billion (193 billion pesos) were up 4.5% from the year before. América Móvil said that the yearly comparison was impacted by the appreciation of the Mexican peso vis-à-vis the dollar and other currencies. At constant exchange rates the company noted service revenues increased 6.1% year-on-year.
Revenues growth beat some estimates, as Macquarie Equities Research had predicted revenues of $14.63 billion (190.5 billion pesos) for the quarter. “For a sector with elusive growth, [América Móvil] impressed with constant currency revenue growth of 6.1% year-over-year,” noted analysts Kevin Smithen and Zach Horat in a research note.
América Móvil said it added 4.1 million wireless subscribers and 1.6 million fixed-line revenue generating units (RGUs) in the third quarter, ending the reporting period with 318.7 million total access lines, which was a 7% year-over-year increase. Of those total lines, 255.9 million were wireless subscribers, 30.3 million were landlines, 16.7 million were broadband customers and 15.8 million were pay-TV units. In the period, the telecom operator obtained 1.1 million new subscribers in Mexico, 587,000 in Colombia and 481,000 in Brazil.
Macquarie Equities noted that América Móvil remains one of top picks as it is well positioned to benefit from postpaid subscriber acquisitions and smartphone adoption. “We believe the shares could trade up sharply tomorrow after recent weakness on Brazil fears,” the firm said.
Exchange rate to this story was 1 USD = 13.0182 MXN.