América Móvil income takes new hit in Q2

After seeing its profits dip 42.1% in Q1, Mexican telco América Móvil's earnings took a new hit in the second quarter on the back of higher costs and foreign exchange effects.

The company's net income fell 16% to 14bn pesos (US$890mn) in Q2, according to financial results released Thursday. In the first six months, income dropped 28% compared to the same period in 2014.

Quarterly ebitda was down 5% to 68.3bn pesos, while ebitda margin declined to 31.1%, from 32.6% a year earlier. Meanwhile, net debt increased 6.8bn pesos in the first half, impacted principally by the KPN deal.

Consolidated revenues remained flat year-on-year at 220bn pesos, bringing cumulative revenues through June to 440bn pesos for a 1.5% year-on-year increase.

The company attributed the poor performance to an irregular Latin American landscape, underpinned by the economic slowdown in its largest market, Brazil.

Still, total revenue from Brazilian operations rose 2.5% to 9bn reais (US$2.82bn).

"We are seeing a mixed bag of economic indicators throughout Latin America, with Mexico's economy appearing to be gaining momentum, Brazil's continuing to go deeper into negative territory, Colombia assimilating the blow to the economy from the drop in oil prices and the rest of the region experiencing relatively stable, albeit decelerating, economic growth," the company said in its earnings statement.

América Móvil ended June with 368mn subscribers, up 1.4% y-o-y, of which 288.8mn are wireless subscribers, 34.6mn landlines, 22.8mn broadband accesses and 21.5mn Pay-TV subs.