America Movil said it lost over 5 million mobile customers in the second quarter, as Covid-19 lockdown measures across almost its entire footprint impacted especially the prepaid market. Fixed customers continued to grow, with 450,000 broadband subscribers added, and underlying service revenues were 0.8 percent higher year-on-year in Q2.
Total revenues reached MXN 252 billion, up 0.6 percent from a year ago. Equipment revenues fell 27.2 percent, while service revenues were up 6.5 percent, helped by the weaker peso versus the dollar and euro. At constant exchange rates and excluding Argentina where hyperinflation rules apply, service revenues rose 0.8 percent, including a 2.3 percent increase in mobile and 1.7 percent fall in fixed.
Mobile revenue growth slowed due to postpaid customers downgrading their plans and fewer prepaid top-ups as stores closed. Especially Mexico and Dominican Republic were affected due to a higher share of prepaid. America Movil ended the quarter with 277.5 million mobile subscribers. It lost around 500,000 postpaid customers and 4.6 million prepaid lines during the three months. Prepaid disconnections were felt most in Mexico (1.7 million), Peru (1.0 million) and Ecuador and Guatemala (450,000 each).
In contrast, the company saw customer growth in the fixed broadband market in nearly every country, except for TelekomAustria. There were, however, disconnections of voice lines and pay-TV services, particularly in Brazil, which lost 190,000 TV subscribers out of 250,000 shed across the group. The total number of fixed RGUs was down 0.5 percent from the previous quarter and 1.2 percent lower year-on-year at just under 81 million.
EBITDA still rose 5.9 percent to MXN 82.6 billion. This was helped by an improved result at the US operation Tracfone, which signed a new network agreement from the start of the year. At constant exchange rates EBITDA increased 3.3 percent, and America Mobil said the majority of operations posted an improved EBITDA margin.
Net profit was up 40 percent to MXN 20.1 billion, helped by a 6.3 percent fall in financing costs. Net debt increased to MXN 765 billion from MXN 677 billion at the end of 2019, due in part to currency fluctuations, and was equal to 1.89x EBITDA. Capex over the six months amounted to MXN 64 billion.
