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Investing.com -- America Movil (NYSE:AMX)’s top line and EBITDA have both met market expectations, with earnings seeing a 7% hike. The reported figures were positively impacted by the depreciation of the Peso.
However, the constant FX service revenue and EBITDA growth experienced a slight slowdown compared to Q4. The company continues to see strong growth in Brazil, particularly in the mobile sector, while growth in Mexico has slowed down due to macroeconomic impacts on prepaid services.
Despite the slowdown, shares remain cheap in comparison to historical data, with a 25E PE of 9.0x, EV/EBITDA 4.6x, and EFCF yield 9.1%. The company’s revenue and EBITDA were in line with expectations, while its net income was 7.2% above. America Movil reported consolidated revenue of P$232.0bn, a 14.1% year-on-year increase, and EBITDA of P$91.1bn, a 13.0% increase.
The net income stood at P$18.7bn, a 39% year-on-year increase, driven by growth in operating profit, lower financial expenses, and an improvement in profits from associates.
The reported top line and EBITDA growth were positively influenced by the Peso’s depreciation against other operating currencies and the consolidation of Claro-VTR in Chile from November 2024. The consolidated service revenue grew by 6.1% in constant FX to P$197.9bn, slightly below the 6.6% reported in Q4. This figure excludes Argentina and the currency effects but does not account for the consolidation of Chile.
Consolidated mobile service revenue growth remained steady at 5.7%, while fixed-line revenue grew by 6.7% year-on-year. Fixed broadband saw a 9.8% growth, and pay TV saw an 8.7% increase. EBITDA grew by 4.0% in constant FX, compared to 5.1% in Q4. At the Investor Day in May 2024, America Movil provided an outlook for 2024-2026, indicating a service revenue CAGR of 4-5.5% and an EBITDA CAGR of 4.5-6.5%.
Net debt excluding leases was at P$500bn, equivalent to 1.50x net debt to EBITDAaL, up from 1.44x as of Q4 and now at the high end of the company’s targeted 1.35-1.5x. Capex rose by 14% year-on-year to P$24.7bn. The company’s guidance is for a US$22bn capex over 2024-26.
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