Telecom Argentina Stet - France Telecom Q4 Earnings Call Highlights

Core Viewpoint - Telecom Argentina reported a significant increase in consolidated revenues and service revenues, primarily driven by the acquisition of Telefónica Móviles Argentina (TMA), marking a return to real growth in service revenues for the legacy business [2][4][6]. Financial Performance - Consolidated revenues exceeded $5.7 billion, reflecting a 53% year-over-year increase in constant Argentine pesos, with service revenues surpassing $5.4 billion, up 55% year-over-year in real terms [2][6]. - The consolidated EBITDA margin improved to approximately 30.3%, with a nominal EBITDA margin of 31.7% for 2025, indicating a margin expansion of over 200 basis points compared to 2024 [5][10]. - The company reported a consolidated net loss of approximately ARS 145 million in 2025, a decline from a net income of almost ARS 1.4 trillion in 2024, attributed to foreign exchange losses [14]. Subscriber Trends - Broadband accesses increased by 3.2% year-over-year to 4.2 million, driven by FTTH adoption, while Pay TV subscribers rose by 1.4% to nearly 3.3 million [8][9]. - Mobile subscribers saw a decline, with prepaid accesses falling 10.7% year-over-year, attributed to updated disconnection criteria, while postpaid accesses decreased by 3.2% [8][9]. Capital Expenditures and Investments - Capital expenditures totaled almost ARS 1.5 trillion (over $1 billion), representing 17.8% of revenues and a 98% year-over-year increase in constant pesos, focusing on FTTH and 5G deployment [15][17]. - The company prioritized investments in FTTH expansion and 5G rollout, with significant network upgrades and new site deployments [17]. TMA Acquisition Impact - TMA contributed nearly $1.9 billion in consolidated revenues and over $0.4 billion in consolidated EBITDA during 2025, with standalone service revenues growing 4% in real terms to approximately $2.1 billion [6][12]. - TMA's efficiency plan aims to improve its margin closer to Telecom's, with a reported EBITDA margin of approximately 26% excluding severance charges, up from 11% in fiscal 2024 [11]. Cash Flow and Debt Management - Free cash flow before dividends and interest payments was over $0.6 billion in 2025, with year-over-year expansion exceeding $0.2 billion [18]. - Net debt to estimated pro forma EBITDA was about 1.7x in 2025, improving from 2024, with gross debt of $3.7 billion and cash and equivalents over $0.5 billion [19][21].