Telecom Argentina S.A. announces consolidated results for the first half (1H23) and second quarter of fiscal year 2023 ("2Q23") **
- Telecom Argentina achieved a net income of P$39,407 million for the six month period ended June 30, 2023.
- The company's operating income before depreciation, amortization, and impairment of fixed assets was P$146,764 million, with a margin over revenues of 28.4%.
- Mobile clients in Argentina reached 20.6 million in 1H23, cable TV subscribers totaled 3.1 million, and broadband accesses amounted to 4.1 million.
- The company's net financial debt amounted to P$621,962 million in 1H23, showing a decrease of 7.6% in constant currency compared to 1H22.
- None.
Note: For the figures included in the 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 annual financial statements, interim and special periods ending as of December 31, 2018 inclusive. Accordingly, the reported figures corresponding to 1H23 include the effects of the adoption of inflationary accounting in accordance with IAS 29. Finally, comments related to variations of results of 1H23 and vs. 1H22 mentioned in this press release correspond to "figures restated by inflation" or "constant".
- For the purposes of reviewing these results, it should be noted that the results presented on a comparative basis (June 2022) include the effect of the year-over-year inflation as of June 2023, which was
115.6% . - Consolidated Revenues amounted to P
$517,253 million in 1H23 (-9.3% in constant currency vs. 1H22) where the inflation acceleration poses challenges to maintain revenues in real terms. Service Revenues totaled P$479,148 million (-10.2% in constant currency vs. 1H22). - Mobile clients in
Argentina reached 20.6 million in 1H23 (+573 thousand vs. 1H22), cable TV subscribers totaled 3.1 million in the same period (-161 thousand vs. 1H22), while broadband accesses amounted to 4.1 million (-144 thousand vs. 1H22), showing a stabilization of client bases in the fixed segment during the last quarter. - In 1H23, [Operating Income before Depreciation, Amortization and Impairment of Fixed Assets ("D, A & I")] amounted to P
$146,764 million (-15.8% vs. 1H22), while our margin over revenues was28.4% . Operating Costs before D, A & I, observed a further decline during 2Q23 in real terms (-8.4% in 2Q23 vs. 2Q22, compared to -4.4% in 1Q23 vs. 1Q22). - During 1H23, the Company recorded a net income of P
$39,407 million (vs. P$68,725 million in 1H22). - Investments (including right-of-use assets) amounted to P
$82,044 million in 1H23, which represents15.9% of our Consolidated Sales. CAPEX (excluding right-of-use assets) continues to be affected by import restrictions and stood at11.9% during 1H23. - Net Financial Debt amounted to P
$621,962 million in 1H23 (-7.6% in constant currency vs. 1H22). Having cancelled all its financial debt commitments up to date, the Company shows a clear maturity profile for the remainder of the year.
**Unaudited non-financial information
(in million P$ adjusted by inflation, except where noted)** | IAS 29 | IAS 29 | Δ $ | Δ % | |||
As of Jun-30, | As of Jun-30, | ||||||
2023 | 2022 | ||||||
Consolidated Revenues | 517,253 | 570,376 | (53,123) | -9.3 % | |||
Operating Income before D, A & I | 146,764 | 174,288 | (27,524) | -15.8 % | |||
Operating loss | (24,133) | (18,400) | (5,733) | 31.2 % | |||
Net income before income tax expense | 1,815 | 65,321 | (63,506) | -97.2 % | |||
Net income attributable to Controlling Company | 37,833 | 67,390 | (29,557) | - | |||
Shareholders' equity attributable to Controlling Company | 1,186,306 | 1,583,373 | (397,067) | -25.1 % | |||
Net Financial Debt | (621,962) | (672,861) | 50,899 | -7.6 % | |||
Investments in PP&E, intangible assets & rights of use assets * | 82,044 | 97,439 | (15,395) | -15.8 % | |||
Fixed lines in service (in thousand lines) *** | 2,936 | 3,085 | (149) | -4.8 % | |||
Mobile customers (in thousand) | 22,945 | 22,349 | 596 | 2.7 % | |||
Personal ( | 20,635 | 20,062 | 573 | 2.9 % | |||
Núcleo ( | 2,310 | 2,287 | 23 | 1.0 % | |||
Broadband accesses in | 4,084 | 4,228 | (144) | -3.4 % | |||
Pay TV Subscribers (in thousand) | 3,357 | 3,517 | (160) | -4.6 % | |||
Average Billing per user (ARPU) Fixed Telephony / voice (in P$ - Restated by inflation) | 1,983.6 | 2,188.4 | (204.8) | -9.4 % | |||
Average Revenue per user (ARPU) Mobile Services - Personal (in P$ - Restated by inflation) | 1,561.1 | 1,679.8 | (118.7) | -7.1 % | |||
Average Revenue per user (ARPU) Broadband (in P$ - Restated by inflation)**** | 4,270.5 | 4,628.5 | (358.0) | -7.7 % | |||
Average Revenue per user (ARPU) Cable TV (in P$ - Restated by inflation)**** | 4,470.0 | 5,121.3 | (651.3) | -12.7 % |
* (in constant currency - includes right-of-use assets as of June 30, 2023, for P
**(Figures may not add up due to rounding)
*** (It includes IP telephony lines, which amounted to approximately 1.29 million and 916 thousand as of June 30, 2023, and June 30, 2022, respectively)
**** Figures for the 2022 comparative period have been adjusted in accordance with the internet and TV discount allocation policies adopted by the Company during 2023.
Telecom Argentina S.A. ('Telecom Argentina') - (NYSE: TEO; BYMA: TECO2), announced today a net income of P
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 June 30, 2023.
The following table shows the evolution of the national consumer price index (National CPI - according to INDEC's official statistics) as of June 30, 2023 and as of December 31, 2022 and 2021, used for the restatement of figures in constant currency.
As of December 31, | As of December 31, | As of June 30, 2023 | |
Annual | 50.9 % | 94.8 % | 115.6 % |
3-month cumulative (Since March 31, 2023) | n/a | n/a | 23.8 % |
During the 1H23, Consolidated Revenues amounted to P
Consolidated Revenues
Mobile Services
As of June 30, 2023, total mobile subscribers in
Mobile Services in
As of June 30, 2023, total mobile subscribers amounted to approximately 20.6 million (+573 thousand vs. 1H22). Postpaid clients represented
In 1H23, mobile service revenues in
In terms of infrastructure, the Company continued to enhance its customers' mobile internet experience with the deployment of 4G and 4G+ networks throughout the country, reaching more than 14.9 million customers with 4G devices. The traffic carried by 4G technologies in 1H23 corresponds to
The Company continued preparing for the introduction of 5G technology by expanding the coverage, availability, and capacity of the network. As of June 30, 2023, 220 5G DSS sites (77 sites in 1H23), were enabled in
Personal in
As of June 30, 2023, Núcleo's subscriber base reached 2.3 million clients. Of the total number of clients,
Núcleo's mobile service revenues during 1H23, amounted to P
Cable TV Services
Cable TV service revenues reached P
As of June 30, 2023, the customer base in
During 1H23, Flow introduced the new ISDBT technological update in new locations in 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 June 30, 2023) reached P
The corporate segment continues to develop new solutions to support companies in boosting their business and advancing digital transformation in this new context.
Internet Services
Internet services revenues totaled P
Additionally, broadband ARPU (restated in constant currency as of June 30, 2023) amounted to P
As of June 30, 2023, customers with a service of 100 Mb or higher represented
Revenues from equipment sales
Equipment revenues amounted to P
Personal Pay
Our virtual wallet service, Personal Pay, ended the year with almost 1.2 million customers. Personal Pay announced the latest developments in its product, including the addition of remunerated balance services, prepaid cards for teenagers, and Extra Pay, as well as other B2B solutions.
Consolidated Operating Costs
Consolidated Operating Costs (including Depreciation, Amortization and Impairment of Fixed Assets) totaled P
The cost breakdown was as follows:
- Employees benefits and severance payments: P
$124,288 million in 1H23 (-4.7% vs. 1H22). During 2Q23, these costs were below inflation (-12.8% ), whereas during 1Q23, they increased in real terms (+4.4% ). Total employees amounted to 21,607 as of June 30, 2023. - Interconnection and transmission costs (including roaming, international settlement charges and lease of circuits): P
$15,185 million (-13.2% vs. 1H22). - Fees for services, maintenance and materials: P
$64,306 million (-2.9% vs. 1H22). - Taxes and fees paid to regulatory authorities: P
$39,925 million (-9.1% vs. 1H22). - Commissions and advertising (commissions paid to agents, collection fees and other commissions): P
$31,500 million in 1H23 (-1.0% vs. 1H22). - Cost of handsets sold: P
$28,061 million (+4.5% vs. 1H22). These costs Increased mainly due to a higher volume of handsets sold, and by an increase in average cost of sales compared to 1H22. - Programming and content costs: P
$29,349 million (-18.6% vs. 1H22). Said reduction was mainly explained by commercial efficiencies. - Other Costs totaled P
$37,875 million (-12.5% vs. 1H22), of which bad debt expenses reached P$12,895 million (-7.3% vs. 1H22). - Our bad debt ratio was 2.5 % as of June 30, 2023 (vs
2.4% in 1H22). - Other operating costs, including charges for lawsuits and other contingencies, energy and other public services, insurance, rents and internet capacity, totaled P
$24,980 million (-14.9% vs. 1H22). - Depreciation, amortization and impairment of fixed assets amounted to P
$170,897 million (-11.3% vs. 1H22). This charge also includes the impact of the amortization of assets incorporated after June 30, 2022, 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 $ | 1H23 | 1H22 | Var |
RECPAM | 36,677 | 56,721 | (20,044) |
Exchange differences | 16,844 | 59,738 | (42,894) |
Net interest | (10,517) | (4,235) | (6,282) |
Investment results | (8,346) | (20,092) | 11,746 |
Others | (7,899) | (8,721) | 822 |
Total | 26,759 | 83,411 | (56,652) |
Income Tax
Telecom's income tax includes the following effects:
i) the current income tax, determined based on the current tax legislation applicable to Telecom,
ii) 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.
Income tax gain amounted to P
Consolidated Net Financial Debt
As of June 30, 2023, our net financial debt (cash, cash equivalents plus financial investments and financial NDF* & interest rate swaps minus loans) amounted to P
* Contemplates rate swaps and NDF (non-delivery forwards) agreements.
Investments in PP&E, intangible assets and rights of use assets
During the 1H23, the Company invested (including rights of use assets) P
The investments were focused on:
- Expansion of cable TV and internet services to improve transmission and access speed offered to customers.
- Deployment and modernization of our 4G mobile access sites to improve coverage and increase mobile network capacity. Our customers with access to our 4G network perceive a better service experience, with higher speeds reaching up to 300 Mbps and the capacity to achieve speeds of 1,000 Mbps.
- 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 to unify the different access technologies and to consolidate the deployment of last-mile networks with FTTH architecture. Continuation of the plan to connect remote and low-density areas through satellite backhaul.
Relevant financial events of the period
Class 15 local notes Issuance.
Issuance Date: June 2, 2023.
Amount Issued:
Maturity Date: June 2, 2026.
Amortization: Bullet.
Interest Rate and payments: Class 15 notes will not accrue interest.
Relevant events after June 30, 2023
Class 16 local notes Issuance.
Issuance Date: July 21, 2023.
Amount Issued:
Maturity Date: July 21, 2025.
Amortization: Bullet.
Interest Rate and payments: Class 16 notes will not accrue interest.
Payment of Class 5 Bonds Amortization
On Monday, August 7, 2023, the Company has paid the second amortization of the principal amount of its Class 5 Negotiable Obligations amounting to U$S 116.7 million.
*******
Telecom Argentina is a leading telecommunications company in
As of June 30, 2023, Telecom Argentina owns 2,153,688,011 issued and outstanding shares.
For more information, please contact Investor Relations:
Luis Fernando Rial Ubago (5411) 5112 7218
|
Tomás Pellicori (5411) 5524 7692 | Santiago Gramegna (5411) 6193 6667 |
For information about Telecom Argentina's services, visit:
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:
Luis Fernando Rial Ubago
(5411) 5112 7218
Tomás Pellicori
(5411) 5524 7692
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SOURCE Telecom Argentina S.A.
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