(Adds revenue and subscriber growth details, analyst's comment)
By Christine Murray
MEXICO CITY, April 29 America Movil, Latin
America's biggest phone company, said on Tuesday that higher
debt costs had pushed its first-quarter profit down by almost
half as its service revenue and subscriber base showed sluggish
The company, controlled by billionaire businessman
Carlos Slim, said profit in the January-March period fell by
48.3 percent to 13.887 billion pesos (US$1.06 billion) from
26.87 billion pesos a year earlier.
America Movil said in a statement it had a total financing
cost of 8.3 billion pesos, mostly related to interest payments
on debt. In the year-earlier period, the company had a financing
gain of 1.4 billion pesos.
Overall revenue rose 1.28 percent to 195.44 billion pesos,
while service revenue, which makes up around 90 percent of total
revenue, increased 0.8 percent.
The company added 2.3 million wireless subscribers during
the quarter, but said it had disconnected 980,000 clients across
Latin America that were not meeting its traffic and consumption
Analysts, on average, had expected profit to fall to 21.31
billion pesos on revenue of 195.342 billion pesos, according to
a Reuters survey of five analysts.
"For me, it doesn't seem to be a very positive report, it
seems very much in line with what we were expecting, a neutral
report with modest growth," said Julio Zetina from brokerage
Vector Casa de Bolsa.
America Movil is facing tough new rules in its core fixed
line and mobile phone markets in Mexico, where the government is
trying to increase competition.
America Movil's core profit, or earnings before interest,
tax, depreciation and amortization (EBITDA), in Mexico fell 0.8
percent. Last year almost half of America Movil's EBITDA came
Core profit rose in Brazil, Chile and other countries in
South America, helping America Movil to a first-quarter 1.7
percent increase in EBITDA from a year ago.
The company said it lost 315,000 prepaid subscribers in
Mexico in the quarter and gained 153,000 postpaid subscribers,
finishing with 73.3 million wireless subscribers. It added
107,000 broadband customers but lost 247,000 fixed lines.
The company is scheduled to hold a conference call on
Wednesday at 1400 GMT to discuss results.
Shares in America Movil closed up 1.62 percent at 13.21
pesos. The shares are down 13.2 percent since the end of
($1 = 13.06 pesos at end March)
(Additional reporting by Elinor Comlay; Editing by Diane Craft)