América Movíl posts $290M loss but U.S. revenues jump 20%

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Carlos Slim’s telecom saw revenue rise 17% during the quarter due to an increase in service revenue, but financial costs nearly tripled.

América Movíl posted a net fourth-quarter loss of roughly $290 million despite increased sales.

Carlos Slim’s telecom saw revenue rise 17% during the quarter due to an increase in service revenue, but financial costs nearly tripled amid a weakening Mexican peso compared to the U.S. dollar and Latin American currencies. América Movíl reported 1.3 million postpaid net additions, marking a 5.3 year-over-year gain, but its prepaid base shrunk 3.7% as 4.7 million customers defected.

Shares of América Movíl dipped roughly 2% on the earnings report.

“In the fourth quarter we disconnected 3.3 million subscribers, closing the year with 281 million,” the company said in a press release. “We disconnected prepaid subscribers that were not generating traffic in Brazil, Panama, Costa Rica, Croatia and Macedonia after the implementation of stricture churn policies.”

América Movíl made big strides in Brazil during the quarter, adding 1 million postpaid subscribers. It also gained 229,000 postpaid users in Mexico and 148,000 in Colombia.

“During the fourth quarter economic activity remained soft in Brazil and relatively strong in Mexico, Colombia and Peru, with retail sales performing well aided by the recovery of commodity prices, including oil,” the carrier said. “The news was dominated by the U.S. election; it was to have a major impact on the Mexican peso and a much more limited one on the other regional carriers.”

And the company continued to grow its U.S. business thanks in part to last year’s acquisition of Walmart Family Mobile from T-Mobile. TracFone, América Movíl’s U.S. MVNO, grew by 1.2 million prepaid customers on that deal, cementing its place in an increasingly competitive market.

América Movíl said fourth-quarter revenues of $2.1 billion in the U.S. marked a 20.1% increase year over year, with equipment rising 56.5% and service revenues rising 15.9%. It ended the year with 26.1 million U.S. customers, up 1.6% from 2015.

“The annual comparison is affected by the acquisition of T-Mobile’s Walmart Family Plan in the third quarter of 2016,” the company said. “Adjusting for this, our revenues would have grown 10.7% annually and EBITA would have risen 2.7 times.”