Telecom Argentina S.A. announces consolidated annual results ("FY22") and fourth quarter of fiscal year 2022 ("4Q22") **
Telecom Argentina (TEO) reported a significant net loss of P$205,640 million for FY22, a stark contrast to a net income of P$19,362 million in FY21. The company’s consolidated revenues declined by 12% to P$729,182 million, driven by inflation and reduced service revenues of P$680,561 million. Operating income before depreciation decreased by 22.5% to P$200,380 million, reflecting an operating margin of 27.5%. The loss was primarily attributed to a goodwill impairment of P$243.9 million. Despite adding 116,000 mobile clients, cable TV and broadband accesses saw considerable declines. Financial metrics showed a decrease in shareholder equity by 24.5%. Investments dropped 27.1%, reaching P$147,266 million.
- Mobile clients increased by 116,000, totaling 20.2 million.
- Net financial debt decreased by 8.7% to P$420,446 million.
- Net loss of P$205,640 million in FY22 compared to net income in FY21.
- Consolidated revenues down 12% in constant currency.
- Service revenues decreased by 11.7% in constant currency.
- Cable TV subscribers fell by 84,000 to approximately 3.5 million.
- Broadband accesses dropped by 132,000 to 4.1 million.
- Operating income before depreciation decreased by 22.5%.
Note: For the figures included in their FFSS, the Company has accounted for the effects of inflation adjustment adopted by Resolution 777/18 of the Comisión Nacional de Valores ("CNV"), which establishes that the restatement will be applied to the annual financial statements, for intermediate and special periods ended as of
- Previous year figures included for comparative purposes (
December 2021 ) contain the effect of the year over year inflation as ofDecember 2022 , which was94.8% . - Consolidated Revenues amounted to P
$729,182 million in FY22 (-12.0% in constant currency vs. FY21), in a context of inflationary acceleration. Service Revenues totaled P$680,561 million (-11.7% in constant currency vs. FY21). - Mobile clients in
Argentina reached 20.2 million in FY22 (+116 thousand vs. FY21), cable TV subscribers totaled approximately 3.5 million (-84 thousand vs. FY21), while broadband accesses amounted to 4.1 million (-132 thousand vs. FY21). - Operating Income before Depreciation and Amortization amounted to P
$200,380 million in FY22 (-22.5% vs. FY21), while our operating margin before D&A was27.5% . - The Company registered a Net Loss of P
$205,640 million in FY22 (vs. an income of P$19,362 million in FY21). This loss was mainly due to a goodwill impairment of P$243.90 0 million registered inSeptember 2022 , which was partially offset by both positive net financial results of P$61,978 million and income tax gains of P$26,504 million . - Investments (including rights of use assets) reached P
$147,266 million in FY22, equivalent to20.2% of our Consolidated Revenues. - Net Financial Debt amounted to P
$420,446 million in FY22 (-8.7% in constant currency vs. FY21).
*Market Cap as of
**Unaudited non financial data
(in million P$ adjusted by inflation, except where noted)** | IAS 29 | IAS 29 | Δ $ | Δ % | |||||
As of Dec-31, | As of Dec-31, | ||||||||
2022 | 2021 | ||||||||
Consolidated Revenues | 729,182 | 828,831 | (99,649) | -12.0 % | |||||
Operating Income before D&A | 200,380 | 258,621 | (58,241) | -22.5 % | |||||
Operating Income (loss) | (294,941) | (5,429) | (289,512) | - | |||||
Net income (loss) before income tax expense | (232,144) | 84,262 | (316,406) | - | |||||
Net income (loss) attributable to | (207,833) | 16,878 | (224,711) | - | |||||
Shareholders' equity attributable to | 796,341 | 1,054,417 | (258,076) | -24.5 % | |||||
Net Financial Debt | (420,446) | (460,268) | 39,822 | -8.7 % | |||||
Investments in PP&E, intangible assets & rights of use assets * | 147,266 | 202,009 | (54,743) | -27.1 % | |||||
Fixed lines in service (in thousand lines) *** | 3,007 | 3,138 | (131) | -4.2 % | |||||
Mobile customers (in thousand) | 22,464 | 22,348 | 116 | 0.5 % | |||||
Personal ( | 20,244 | 20,130 | 114 | 0.6 % | |||||
Núcleo ( | 2,220 | 2,218 | 2 | 0.1 % | |||||
Broadband accesses in | 4,116 | 4,248 | (132) | -3.1 % | |||||
Pay TV Subscribers (in thousand) | 3,479 | 3,563 | (84) | -2.3 % | |||||
Average Billing per user (ARPU) Fixed Telephony / voice (in P$ - Restated by inflation) | 1,445.0 | 1,513.9 | (68.9) | -4.6 % | |||||
Average Revenue per user (ARPU) Mobile Services - Personal (in P$ - Restated by inflation) | 1,102.6 | 1,201.9 | (99.3) | -8.3 % | |||||
Average Revenue per user (ARPU) Broadband (in P$ - Restated by inflation) | 3,052.4 | 3,364.3 | (311.9) | -9.3 % | |||||
Average Revenue per user (ARPU) Cable TV (in P$ - Restated by inflation) | 3,006.9 | 3,668.3 | (661.4) | -18.0 % |
* (in constant measuring unit – includes adds of rights of use assets of P
**(Figures may not add up due to rounding)
*** (It includes IP telephony lines, which amounted to approximately 721 thousand and 1,097 thousand as of
Comparative figures for the previous fiscal year have been restated so that the resulting information is presented in terms of the current measurement unit as of
The following table shows the evolution of the consumer price index (National CPI - according to
As of | As of | As of | |
Annual | 36.1 % | 50.9 % | 94.8 % |
3-month cumulative (Since September) | n/a | n/a | 17.3 % |
During the FY22, Consolidated Revenues amounted to P
Consolidated Operating Revenues
Mobile Services
As of
Mobile Services in
As of
In FY22, mobile service revenues in
During FY22, the Company prepared to receive 5G technology by expanding the coverage, availability and capacity of the network through a technological reconversion and continuing the use of 4G. As of
Personal in
As of
Núcleo's mobile service revenues during FY22, amounted to P
Cable TV Services
Cable TV service revenues were P
Flow continued to strengthen its content offer by incorporating new products in music, national and international films, and gaming. During FY22, Flow subscribers alone reached 1.3 million.
Additionally, we continued to deploy the ISDB-T technology for analogic Flow subscribers in new cities, reaching more than 1.5 million subscribers in the Autonomous City of Buenos Aires and the province of
Fixed Telephony and Data Services
Revenues generated by fixed telephony and data services reached P
The monthly fixed voice ARPU (restated in constant currency as of
The corporate segment continues to develop new solutions to help companies boost their business and continue to evolve digital transformation in this new context. During FY22 we continued to offer value proposals, including Cybersecurity as an essential axis in this transformation process. Within this framework, the Company included in its offer Oracle Cloud solutions for companies that include application servers, databases and more. Additionally, Telecom reaffirmed the alliance with the Chamber of the Argentine Software Industry (CESSI) to work together with the more than 1,800 member companies, as technological advisors and help them in their digital transformation and evolution processes.
Internet Services
Internet services revenues totaled P
Additionally, broadband ARPU (restated in constant currency as of
The Company continued to enhance the home connectivity experience of its customers, increasing the deployment of Fiber Optic to the Home (FTTH) in different locations throughout the country. These connections reach up to 300 megabytes, with low latency, multi-device connection and including the option of contracting Flow as an additional service, among other advantages.
Additionally, during the end of this fiscal year, Personal announced that it doubled the internet speed to all its home customers (with HFC, FTTH technology), going from 50 to 100 megabytes, from 100 to 300 megabytes and from 300 to 500 megabytes, and the lowest speeds went to 50 megabytes. Customers with a service of 100 Mb or more represent
Revenues from equipment sales
Equipment revenues amounted to P
Personal Pay
Our virtual wallet service, Personal Pay, which is constantly evolving, managed to find a place in this rapidly growing market in the country and the region, and ended the year with more than 700,000 customers. Leveraged by the strength of the mobile services ecosystem, customers choose reliability and convenience, and that's the greatest differential of Personal Pay.
Consolidated Operating Costs
Consolidated Operating Costs (including D&A and impairment of fixed assets) totaled P
The cost breakdown was as follows:
- Employees benefits and severance payments: P
$182,664 million in FY22 (+P$3,799 million or +2.1% vs. FY21). Total employees amounted to 21,729 as of FY22. - Interconnection and transmission costs (including roaming, international settlement charges and lease of circuits) were P
$22,455 million (-24.5% vs. FY21). This saving was mainly due to a new business dynamic that optimizes our links and sites which has offset the increase in prices of services that are denominated in US dollars. - Fees for services, maintenance, materials and supplies: P
$88,456 million (-P$7,832 million vs. FY21). This decrease is mainly explained by a decrease in maintenance and material costs of vs. FY21, mainly offset by a higher cost of call center fees and other fees for services for$9,342 million compared to FY21.$1,482 million - Taxes and fees paid to regulatory authorities: P
$55,991 million (-12.2% vs. FY21). This decrease was mainly due to lower sales during FY22 vs FY21. These costs represent7.7% of total revenues as of FY22 and FY21. - Commissions and advertising (commissions paid to agents, collection fees and other commissions): P
$44,166 million in FY22 (-7.0% vs. FY21). Said decrease was mainly explained by lower agent commission charges and collection fees, partially offset by a slight increase in advertisement costs related to campaigns related to Personal Pay (the Company's electronic wallet) and cybersecurity services. - Cost of handsets sold: P
$34,540 million (-15.4% vs. FY21). These costs decreased mainly due to a lower volume of handsets sold (-15% vs. FY21), partially offset by a68% increase in average cost of sales compared to FY21. - Programming and content costs: P
$45,741 million (-18.9% vs. FY21). Said reduction was mainly explained by commercial efficiencies, which were partially offset by price increases in almost all of our broadcasting signals. - Other Costs totaled P
$54,789 million (-3.6% vs. FY21), of which bad debt expenses reached P$18,342 million (+18.0% vs. FY21). - Our bad debt ratio was
2.5% as ofDecember 31, 2022 (vs.1.9% in FY21). The increase was mainly due to the deteriorating economic situation inArgentina , which has a direct impact on our bad debt ratios. The bad debt ratio of the FY21 was impacted by post-pandemic collection improvements. - Other operating costs (including charges for lawsuits and other contingencies, energy and other public services, insurance, rents and internet capacity) totaled P
$36,447 million (-11.7% vs. FY21). The decrease is related to lower charges in almost all the lines that make up the item. - Depreciation, amortization, and impairment of fixed assets amounted to P
$495,321 million (+87.6% vs. FY21). During FY22, we registered an impairment of goodwill of the Argentine CGU for (For more information, refer to Note 3.v.1.a of the financial statements). This charge also includes the impact of the amortization of assets incorporated after$243,900 million December 31, 2021 , partially offset by the effect of the assets that were completely amortized after such date.
Net Financial Results
Net Financial Results (including Financial Expenses on Debt and Other Financial Results) were P
In millions of $ | FY22 | FY21 | Var |
Exchange differences | 43,377 | 104,682 | (61,305) |
Investment results | (12,683) | 2,766 | (15,449) |
Net interest | (11,282) | (34,243) | 22,961 |
RECPAM | 53,164 | 33,432 | 19,732 |
Others | (10,598) | (17,716) | 7,118 |
Total | 61,978 | 88,921 | (26,943) |
Income Tax
Our income tax includes the following effects:
- the tax to be paid according to applicable local tax legislation,
- the effect of applying the deferred tax method on temporary differences generated when comparing our asset and liability valuation according to tax and financial accounting criteria which includes the effect of the income tax inflation adjustment, and
- the effects mentioned in Note 15 to the consolidated financial statements as of
December 31, 2022 .
Income tax gain amounted to P
Consolidated Net Financial Debt
As of
* Contemplates rate swaps and NDF (non-delivery forwards) agreements.
Investments in PP&E, intangible assets and rights of use assets
During the FY22, the Company invested (including rights of use assets) P
The investments were focused on
- Projects related to improving internet transmission and access speed.
- Deployment and modernization of our 4G mobile access sites, supporting the growth in the coverage of our mobile network.
- Expansion of 5G to support the growth of the mobile internet and the improvement in the quality of service together with the launch of new Value Added Services
- Extension of our transmission and transport networks in order to unify the different access technologies and to consolidate the deployment of last-mile networks with FTTH architecture.
- New customer contact systems to streamline the relationship with our customers.
Relevant financial events of the period
Dismissal of appeals
On
Resignation of a member of the Board of Directors and Ordinary and Extraordinary General Shareholders Meeting
On
In light of this resignation, the Shareholders' Meeting summoned for
- Appoint Mr.
Ignacio Rolando Driollet as a regular director, to serve fromJanuary 1, 2023 and until the end of 2023.Mr. Driollet qualifies as "NOT independent" in accordance with the Rules of the Comisión Nacional de Valores (National Securities Commission ) - Approve the management carried out by Mr. Sebastian Bardengo from
April 27, 2022 until the date of the meeting.
Loans with CDB,
Chinese Development Bank Shenzhen Branch (CDB): During 2022, the Company subscribed new tranches for a total amount of
These proceeds were used for the acquisition of telecommunication equipment.
Relevant events after
Class 14 local notes - Issuance
Issuance Date:
Amount Issued:
Maturity Date:
Amortization: Bullet.
Interest Rate and payments:
Decease and designation of Director
On
For this reason, on
Preliminary Injunction
On
As of
For more information, please contact Investor Relations:
(5411) 5112 7218 | Tomás Pellicori (5411) 5524 7692 | (5411) 6193 6667 |
For information about
www.telecom.com.ar
www.personal.com.ar
www.personal.com.py
Disclaimer
This document may contain statements that could constitute forward-looking statements, including, but not limited to (i) the Company's expectations for its future performance, revenues, income, earnings per share, capital expenditures, dividends, liquidity and capital structure; (ii) the continued synergies expected from the merger between the Company and Cablevisión S.A. (or the Merger); (iii) the implementation of the Company's business strategy; (iv) the changing dynamics and growth in the telecommunications and cable markets in
Contacts: (5411) 5112 7218 Tomás Pellicori (5411) 5524 7692 |
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