América Móvil reports 40% rise in Q2 net profit despite customer losses

América Móvil reported a 40% jump in net profit in the second quarter of 2020, even though it lost more than 5 million wireless customers because of lockdown measures introduced to stop the spread of COVID-19.

Around 4.6 million clients were disconnected in the prepaid segment, and 500,000 in the postpaid base. The worst affected market was Mexico, where Telcel lost 1.7 million prepaid customers, while Peru and Central America each lost 1 million prepaid customers.

América Móvil reported a slight increase in revenue, which rose 0.6% year-on-year to 252 billion Mexican pesos ($11.2 billion). EBITDA (earnings before interest, tax, depreciation and amortization) also grew, by 5.9% to MXN82.6 billion ($3.7 billion), while net income rose by almost 40% to MXN20 billion ($896 million) because of lower costs.

Although wireless subscriber numbers fell, the group gained 450,000 fixed broadband clients in the quarter, indicating that América Móvil benefited from the move towards remote working during the pandemic. The operator also said that the trend in its wireless business began to improve as restrictions were lifted. Overall, the group ended June with 358.5 million access lines, including 277.5 million wireless and 81 million fixed connections.

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América Móvil operates in a number of markets in Latin America, including Argentina, Brazil, Colombia, Chile, Ecuador, Peru and central America. It also has subsidiaries in the Caribbean and the USA (TracFone), and owns 51% of the A1 Telekom Austria Group and 17.1% of KPN in the Netherlands.

Notably, the group said TracFone had a very strong quarter in terms of net additions, gaining 214,000 subscribers in the second quarter, compared to 164,000 disconnections a year before. Revenue also increased by 4.5% to $2.1 billion while EBITDA grew by 76.2% to $313 million owing to a new agreement granting certain reductions in the cost of airtime.

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— Anne Morris, contributing editor, special to Light Reading

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