Telecom(TEO) - 2022 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The EBITDA margin for the first nine months of 2022 was almost 29%, with pressures mainly from labor costs, partially offset by other cost containment measures [9][38] - Revenues totaled $3.2 billion, with a year-over-year decrease of 12% in constant pesos [14] - Free cash flow generation was solid at $369 million during the nine months of 2022 [10][52] - The company recorded a net loss of P$163 billion, primarily due to a goodwill impairment of P$208 billion [42][47] Business Line Data and Key Metrics Changes - Mobile subscriber base grew to approximately 20 million, with postpaid clients representing 43% of the total [15][21] - Broadband and Pay TV clients totaled 4.2 million and 3.5 million, respectively, with a decline in Pay TV subscribers by 1.7% [15][23] - The Flow platform saw unique customers reach 1.3 million, an increase of 18% year-over-year [11][24] Market Data and Key Metrics Changes - Year-over-year inflation in Argentina was 83% as of September 2022, with a year-to-date inflation rate of 66.1% [17] - The company performed five price increases during 2022 to cope with inflation, with mobile prices increasing by an average of 17% [18][19] Company Strategy and Development Direction - The company is focusing on increasing the frequency and magnitude of price increases to manage inflationary pressures [11][20] - CapEx was approximately $580 million, representing 16% of revenues, with investments directed towards network modernization and expansion [10][49] Management's Comments on Operating Environment and Future Outlook - Management noted that despite price increases, there has not been a significant loss in market share or customer base [20] - The company is optimistic about its growth in mobile and broadband segments, with a solid performance in postpaid mobile clients [28] Other Important Information - The company recorded a goodwill impairment due to deteriorating market conditions, impacting EBIT and net income but not affecting operational cash generation [42][47] - The company has a clear maturity profile for its debt, with manageable maturities and access to local capital markets for financing needs [58] Q&A Session Summary Question: What are the expectations for future growth in the mobile segment? - Management indicated a positive net inflow of postpaid mobile clients from competitors, suggesting a strong competitive position in the mobile market [28] Question: How is the company managing inflationary pressures? - The company is increasing prices more frequently and has managed to contain most cost lines below inflation, which has helped maintain margins [20][40] Question: What is the impact of the goodwill impairment on operations? - The impairment does not affect assets other than goodwill and has no impact on the company's operations, EBITDA, or cash generation capacity [47]