How the Peso Played Tricks on América Móvil's Earnings
América Móvil's Q3 2023: Revenues down 3.3% due to a stronger peso, service revenue down 4.3%. Profit plummeted by 88.7%, but Ebitda grew at constant exchange rates. 3 million new subscribers, 100 billion pesos in investment expenses.
In a world where business is as unpredictable as a roulette wheel, the Mexican telecom titan, América Móvil, is rolling the dice. The third quarter of 2023 brought both fireworks and shambles, as Carlos Slim's company juggled its revenues, profits, and the exchange rate like a circus act on a tightrope.
América Móvil kicked off the show by invoicing 203,842 million pesos in the third quarter, which, surprisingly, was 3.3% less than their earnings for the same period in 2022. But before you accuse them of financial foul play, here's the twist – it's all about the Mexican peso.
You see, this isn't some corporate drama; it's a currency caper. The peso's little adventure in the global forex market caused its relative appreciation, leading to a decline in the value of América Móvil's international revenues. It's like they had their own magic trick, but instead of pulling a rabbit out of a hat, they made profits disappear into thin air!
América Móvil reported a 4.3% decrease in service revenues. It's like they're on a financial rollercoaster, and it's not a thrilling one; it's more of a 'hold onto your wallet' type of rollercoaster. According to América Móvil, if we look at these numbers in a parallel universe where the peso's value didn't skyrocket, service revenue growth would be up by 3.8%. In other words, it's the pesos playing hard-to-get, not the business.
Profit Plummets
Their profit had a free-fall, plummeting 88.7% in the third quarter to a humble 2.28 billion pesos. That's almost like going from a five-star buffet to a dollar store ramen. Ouch!
But don't despair; we're not done with the drama yet. The Ebitda did the limbo and fell by 3.6%, reaching 79.896 billion pesos in nominal terms. It's as if the peso, having tasted the high life, decided to do the financial limbo dance and dragged the earnings along for the ride.
The interesting part? In the world of constant exchange rates, operating cash flow grew by 5%. It's like watching a seesaw teetering between currencies and numbers – always shifting.
Subscriptions Surge
The plot thickens as América Móvil casually drops the news that they added 3 million mobile service subscriptions in the quarter. Maybe it's their way of saying, “We might have lost some cash, but we're making up for it in customers.”
Oh, and let's not forget the whopping 100 billion pesos they burned through in the first nine months of the year. It's as if they're the Elon Musk of the telecom world, investing left, right, and center.
So, there you have it – América Móvil's financial rollercoaster of a quarter. The moral of the story? Occasionally, it's not the business, but the currency that decides to take center stage and make a mockery of the numbers. Will América Móvil's pesos rise like a phoenix in the next quarter? Stay tuned for the next episode of “América Móvil.
