Peru and Chile continue to be the giant América Móvil’s stumbling blocks

RIO DE JANEIRO, BRAZIL – Mexican telecom giant América Móvil reported that during the first quarter of 2022, it achieved a consolidated net profit of MXN 30.8 billion (US$1.5 billion), which far exceeded the MXN 1.8 billion recorded as of March 2021.

As the company explained, this was mainly due to a comprehensive financing income of MXN 7.3 billion, derived from foreign exchange gains of MXN 22.6 billion.

Total revenues grew 2.4% to MXN 211.2 billion. Among other factors, the company added 3.2 million mobile subscribers in the first quarter across all its operations.

Although the group’s results were positive, its operations in Peru and Chile continue to be seen as the stumbling block.

In the case of Peru, although its postpaid base increased 18% to 5.2 million users and its mobile and fixed services also grew (9.7% and 6.1%, respectively), its Ebitda showed a decrease of 6.2% due to higher commercial activity.

According to the company, Ebitda of PEN 512 million (US$133 million) decreased due to “a reduction in the equipment margin and an increase in bad debt provisions”.

This line was unusually low in the first quarter of the previous year due to low commercial activity during the pandemic.

But that was not all. Even though the revenues of the operation in the Inca country grew 10.6%, Claro Peru’s profit fell almost 20% to PEN 213 million.

Similarly, and perhaps with more pronounced drops, Claro Chile increased its operating loss by 136.5% to CLP 20.2 billion (US$23.6 million), which also led to a 19% drop in Ebitda to CLP 36 billion.

According to América Móvil, “competitive pressure in the mobile and fixed segments resulted in a 5.6% drop in service revenues. Revenues from fixed services fell 2%, while mobile services fell 8.6%,” the company explained.