América Móvil(US:AMX)2024-02-15 00:59Financial Data and Key Metrics Changes - In Q4 2023, América Móvil experienced a volatile environment with interest rates surging to record highs, impacting financial performance [5] - Service revenue increased by 3.7% at constant exchange rates, while adjusted EBITDA grew by 4.6% [7] - Mobile service revenue expanded by 4.2%, and fixed-line revenue grew by 3.0%, marking the fifth consecutive quarter of positive growth for both platforms [8] Business Line Data and Key Metrics Changes - The company added 3.9 million wireless subscribers in Q4, including 2.7 million postpaid clients, with Brazil contributing 1.8 million new contract clients [6] - The postpaid subscriber base increased by 7% year-on-year, while fixed broadband accesses rose by 4.1% [7] - Pay TV accesses fell by 1.8% year-on-year, indicating a decline in that segment [7] Market Data and Key Metrics Changes - Mobile service revenue growth in Mexico remained stable at 4.5%, while Brazil's growth slowed to 7.1% [8] - In Central America, mobile service revenue growth accelerated to 10.7% [8] - Corporate networks revenue on the fixed-line platform grew by 8.1%, with significant growth in Eastern Europe [9] Company Strategy and Development Direction - The company plans to reduce CapEx from $8.6 billion in 2023 to $7 billion in 2024, focusing on investments in 5G and fiber infrastructure [15] - América Móvil aims to maintain its competitive position in Colombia despite increased regulatory obligations, continuing to invest in the market [15] - The company is committed to maintaining its presence in Austria and Eastern Europe, emphasizing growth in B2B services [23][24] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains challenging due to inflation and competition, but they expect to sustain margins and continue growth in Mexico [31][32] - In Argentina, the company is optimistic about future growth despite current economic challenges, with a focus on increasing prices and expanding fixed broadband [36] - The management expressed confidence in the long-term potential of operations in Chile, indicating ongoing improvements and cost reductions [40][41] Other Important Information - The inclusion of Argentina in financial results led to unusual accounting effects, resulting in a net decline in revenues and EBITDA due to currency depreciation [11] - The company reported a net debt increase of 21 billion pesos, which was used to cover capital expenditures and shareholder distributions [12] Q&A Session Summary Question: CapEx plans and regulatory changes in Colombia - Management confirmed a reduction in CapEx to $7 billion for 2024, while continuing to invest in Colombia despite new regulatory obligations [15] Question: ARPU growth sustainability in Mexico and Brazil - ARPU in Mexico grew by 3.1% in prepaid and 2% in postpaid, with management optimistic about sustaining this growth [18][44] Question: Margin expansion in Mexico - Management indicated that margins in Mexico are stable and expected to sustain over 40%, driven by cost-cutting and digitalization efforts [31][33] Question: Future cash flow use and Chile's self-sustainability - Cash flow will primarily be returned to shareholders, with no immediate plans for M&A, while Chile is expected to improve over the next 2-3 years [39][40]