Amé rica Mó vil Posts Loss on Weak Currencies

MEXICO CITY—Mexican telecommunications company Amé rica Mó vil SAB reported a net loss for the third quarter as the sharp depreciation of the Mexican peso and the Brazilian real against the U.S. dollar led its financial costs to increase almost fourfold.

The company controlled by billionaire Carlos Slim registered a net loss of 2.88 billion pesos ($175 million) in the July-September period, compared with a net profit of 12.62 billion pesos in the year-earlier quarter.

"The foreign exchange losses incurred have not had an impact on cash flows. They partly originate in intercompany financing positions," Amé rica Mó vil said in a release. The foreign exchange loss of 45.11 billion pesos was partly offset by a drop in other financial expenses.

Revenue in the quarter rose 1.2 % to 223.6 billion pesos, while operating cash flow measured by earnings before interest, taxes, depreciation and amortization, or Ebitda, fell 8.2% to 66.73 billion pesos.

The company's wireless subscriber base decreased by 401,000 in the quarter as disconnections of customers in Brazil, Ecuador and Colombia were partially countered by new subscribers in Mexico, Central America, Argentina and Chile.

Amé rica Mó vil ended the quarter with 288.4 million wireless subscribers, up 1% from a year earlier. It also had 34.9 million fixed lines with 23.4 million broadband subscribers and 21.6 million pay TV subscribers.

Except for revenue, the results were below expectations. The company had been expected to report net profit of 9.2 billion pesos on sales of 220.7 billion pesos, with Ebitda of 69.3 billion pesos, according the median estimate of nine equities analysts polled by The Wall Street Journal.

August marked a year since Mexican mobile unit Telcel was required to complete incoming calls from competitors without charge, while still paying to connect outgoing calls to their networks. The asymmetric regulations on the dominant carrier, imposed under new telecommunications laws, were among reasons that encouraged U.S. giant AT&T Inc. to move into Mexico this year with the purchase of two smaller mobile operators.

Amé rica Mó vil said that both AT&T and Spain's Telefó nica are "drumming up their investment efforts and presence in the market," and that Amé rica Mó vil "should not be in a position to subsidize our competitors by way of asymmetric interconnection rates and other regulatory asymmetries."

The company also renewed its call to be allowed to offer pay TV service in Mexico, from which is has been barred.

Amé rica Mó vil shares closed up 2.2% Monday at 14.57 pesos ahead of the report's release but are down 10% in the past 12 months.

Write to Anthony Harrup at [e-mail]

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October 19, 2015 20:25 ET (00:25 GMT)

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