Telecom(TEO) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Telecom Argentina's consolidated revenues reached over $5.7 billion, a 53% year-over-year increase in constant Argentine pesos, primarily due to the incorporation of Telefónica Móviles Argentina (TMA) results [5] - The consolidated EBITDA margin improved to over 30.3%, an increase of over 200 basis points compared to the previous year, with a comparable EBITDA margin of 33.7% excluding TMA contributions [6][20] - Consolidated CapEx was approximately $1.0 billion, an 88% increase in pesos compared to fiscal year 2024, focusing on expanding fixed and mobile access networks [7] Business Line Data and Key Metrics Changes - Service revenues reached over $5.4 billion, a 55% year-over-year increase in real terms, incorporating TMA's contribution [11] - Excluding TMA, total service revenues grew by 4% year-over-year in real terms, with mobile, broadband, and Pay TV service revenues growing at a weighted average rate of 7% [12] - The mobile subscriber base for Telecom and TMA reached 19.9 million and 19.1 million accesses respectively, consolidating market leadership [10] Market Data and Key Metrics Changes - In Paraguay, revenues grew almost 7% year-over-year in US dollars, with EBITDA increasing by 12% to $115 million [17] - The broadband customer base in Paraguay reached 345,000, while Pay TV subscribers amounted to 110,000 [17] - Personal Pay onboarded nearly 1 million clients in Paraguay, reflecting strong market performance [17] Company Strategy and Development Direction - The company continues to prioritize the expansion of its fiber to the home (FTTH) network and 5G infrastructure, marking the largest FTTH rollout since the Telecom-Cablevisión merger [29] - A joint venture with Banco Macro was created to enhance Personal Pay's growth and product offerings, aiming to deepen customer engagement across connectivity and financial services [19] - TMA is executing an efficiency plan to align its EBITDA margin with Telecom's, focusing on cost optimization and operational improvements [24] Management's Comments on Operating Environment and Future Outlook - Management highlighted the recovery in service revenues and ARPU growth across all segments, reflecting disciplined pricing and improved commercial execution [39] - The company expressed confidence in its ability to sustain long-term growth through strategic investments in network quality and digital financial services [38] - Management noted that the acquisition of TMA did not negatively impact the leverage ratio, indicating a solid balance sheet and resilience to FX fluctuations [33] Other Important Information - The company recorded a consolidated net loss of approximately ARS 145 million in fiscal year 2025, compared to a net income of ARS 1.4 trillion in fiscal year 2024, primarily due to FX exchange losses [27][28] - Free cash flow reached over $0.6 billion, with a cash position exceeding $0.5 billion at year-end, providing financial flexibility [39] Q&A Session All Questions and Answers Question: What are the expectations for subscriber growth in the broadband segment? - The company noted a return to customer growth in broadband for the first year since 2021, supported by FTTH expansion and solid commercial performance [10] Question: How is the integration of TMA progressing? - Management indicated that TMA's efficiency plan is delivering meaningful improvements, with a significant recovery in EBITDA margin [24] Question: What is the outlook for the company's financial position? - The company emphasized its strong cash flow generation and improved debt maturity profile, positioning it well for sustained long-term growth [40]