Telecom Argentina S.A. announces consolidated results for the first quarter of fiscal year 2022 ("1Q22")
Telecom Argentina (NYSE: TEO) reported a significant net income of P$23,745 million for Q1 2022, marking a 69.9% increase year-over-year. However, consolidated revenues dropped to P$117,372 million, an 8.3% decrease in constant currency compared to Q1 2021. Service revenues also fell by 8.6%, totaling P$109,378 million. Despite a rise in the number of mobile clients and broadband accesses, operating income before depreciation dropped by 12.7% to P$40,691 million. The company’s net financial debt decreased by 12.4%, reaching P$251,888 million, as investments declined by 38% to P$18,783 million.
- Net income rose 69.9% to P$23,745 million in Q1 2022.
- Increased mobile clients in Argentina by 1.4 million, reaching 20.2 million.
- Improved broadband accesses, totaling 4.2 million, an increase of 66,000 vs. Q1 2021.
- Net financial debt decreased by 12.4% to P$251,888 million.
- Consolidated revenues fell by 8.3% to P$117,372 million in constant currency.
- Service revenues decreased by 8.6% year-over-year.
- Operating income before depreciation dropped 12.7% to P$40,691 million.
- Operating income fell 85% to P$1,257 million.
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 March 31, 2018 inclusive. Accordingly, the reported figures corresponding to 1Q22 include the effects of the adoption of inflationary accounting in accordance with IAS 29. Finally, comments related to variations of results of 1Q22 and vs. 1Q21 mentioned in this press release correspond to "figures restated by inflation" or "constant".
- The results included for comparative purposes (March 2021) contain the effect of the year over year inflation as of March 2022, which was
55.1% . - Consolidated Revenues amounted to P
$117,372 million in 1Q22 (-8.3% in constant currency vs. 1Q21), in a context of high inflation. Service Revenues totaled P$109,378 million (-8.6% in constant currency vs. 1Q21). - We have increased the number of clients versus 1Q21 in our 3 main segments. Mobile clients in Argentina reached 20.2 million in 1Q22 (+1.4 million vs. 1Q21), cable TV subscribers totaled approximately 3.5 million (+11 thousand vs. 1Q21), while broadband accesses amounted to almost 4.2 million (+66 thousand vs. 1Q21).
- Operating Income before Depreciation and Amortization amounted to P
$40,691 million in 1Q22 (-12.7% vs. 1Q21), while our Operating margin before D&A was34.7% . - The Company's Net Income amounted to P
$23,745 million in 1Q22 (+69.9% vs.$13,978 million in 1Q21). Our Net financial results were positive and totaled P$22,340 million , while income tax charge was positive in$28 million . - Investments (including rights of use assets) reached P
$18,783 million in 1Q22, equivalent to16.0% of our Consolidated Revenues. - Net Financial Debt amounted to P
$251,888 million in 1Q22 (-12.4% in constant currency vs. 1Q21).
*Market Cap as of May 9th, 2022
**Unaudited non financial data
BUENOS AIRES, Argentina, May 10, 2022 /PRNewswire/ -- Telecom Argentina S.A. ('Telecom Argentina') - (NYSE: TEO; BYMA: TECO2), announced today a net income of P
(in million P$ adjusted by inflation, except where noted)** | IAS 29 | IAS 29 | |||||||
As of March 31, | As of March 31, | Δ $ | Δ % | ||||||
2022 | 2021 | ||||||||
Consolidated Revenues | 117,372 | 128,036 | (10,664) | - | |||||
Operating Income before D&A | 40,691 | 46,602 | (5,911) | - | |||||
Operating Income | 1,257 | 8,356 | (7,099) | - | |||||
Net income before income tax expense | 23,717 | 18,985 | 4,732 | ||||||
Net income attributable to Controlling Company | 23,526 | 13,558 | 9,968 | ||||||
Shareholders' equity attributable to Controlling Company | 650,675 | 683,665 | (32,990) | - | |||||
Net Financial Debt | (251,888) | (287,606) | 35,718 | - | |||||
Investments in PP&E, intangible assets & rights of use assets * | 18,783 | 30,279 | (11,496) | - | |||||
Fixed lines in service (in thousand lines) *** | 2,297 | 2,752 | (455) | - | |||||
Mobile customers (in thousand) | 22,405 | 21,004 | 1,401 | ||||||
Personal (Argentina) | 20,163 | 18,796 | 1,367 | ||||||
Núcleo (Paraguay) -including Wimax customers- | 2,242 | 2,208 | 34 | ||||||
Broadband accesses in Argentina (in thousand) | 4,238 | 4,172 | 66 | ||||||
Pay TV Subscribers (in thousand) | 3,535 | 3,525 | 11 | ||||||
Average Billing per user (ARBU) Fixed Telephony / voice (in P$ - Restated by inflation) | 970.9 | 914.4 | 56.5 | ||||||
Average Revenue per user (ARPU) Mobile Services - Personal (in P$ - Restated by inflation) | 682.5 | 753.0 | (70.5) | - | |||||
Average Revenue per user (ARPU) Broadband (in P$ - Restated by inflation) | 2,000.5 | 2,107.0 | (106.5) | - | |||||
Average Revenue per user (ARPU) Cable TV (in P$ - Restated by inflation) | 1,990.2 | 2,389.6 | (399.4) | - | |||||
* (in constant measuring unit – includes | |||||||||
**(Figures may not sum up due to rounding) | |||||||||
*** (does not include IP telephony lines, which as of March 31, 2022 amounted to approximately 807 thousand) |
Comparative figures for the previous fiscal year have been restated so that the resulting information is presented in the current measurement unit as of March 31, 2022.
The following table shows the evolution of the consumer price index (National CPI - according to INDEC's official statistics) as of March 31, 2022 and as of December 31, 2021 and 2020, which were used to restate the figures in constant currency:
As of December 31, | As of December 31, | As of March 31, | |
Price Index Variation | |||
Annual | |||
3 month cumulative (since Sep-21) | n/a | n/a |
During the 1Q22, Consolidated Revenues amounted to P
As of March 31, 2022, total mobile clients in Argentina and Paraguay amounted to 22.4 million. In 1Q22, total mobile services revenues represented P
As of March 31, 2022, total mobile subscribers amounted to more than 20.2 million (+1.4 million vs. 1Q21). Postpaid clients represented
In 1Q22, mobile service revenues in Argentina amounted to P
Personal Pay continued improving its value proposition and adding new features. Currently, our digital wallet allows customers to pay, save and transfer money, efficiently and safely. Users can add money to their account through transfers in cash from authorized recharge centers, recharge their mobile phones, and pay their bills in the case of postpaid clients.
As of March 31, 2022, Núcleo's subscriber base reached 2.2 million clients. Prepaid and postpaid customers represented
Núcleo´s mobile service revenues during 1Q22, amounted to P
Cable TV service revenues were P
Flow continued to strengthen its offering by incorporating new products in music, national and international films, and gaming.
During March 2022, Flow broadcasted the Lollapalooza Argentina international festival through live streaming. More than one million people enjoyed the event through four exclusive channels.
Revenues generated by fixed telephony and data reached P
The monthly fixed voice ARPU (restated in constant currency as of March 31, 2022) reached P
During the first quarter of the year, the following initiatives were developed in the corporate segment:
- Presented a new tool called "Fortalecimiento de usuarios" which helps to reduce the risk of cyberattacks on companies.
- A technological alliance with Frávega was announced, for the contracting of the Amazon Web Services' (AWS) cloud solutions.
- The Company participated in Expo Agro 2022, presenting our agribusiness IoT solutions portfolio and offering our connectivity during the exhibition.
- We were the official sponsor and technological partner of the Argentina Open tennis tournament, installing 4G technology to enhance mobile coverage.
Internet services revenues totaled P
Additionally, broadband ARPU (restated in constant currency as of March 31, 2022) amounted to P
The average monthly churn rate for the 1Q22 was
Equipment revenues amounted to P
Consolidated Operating Costs (including D&A and impairment of fixed assets) totaled P
Our costs breakdown was as follows:
- Employees benefits and severance payments: P
- Interconnection and transmission costs (including roaming, international settlement charges and lease of circuits) were P
- Fees for services, maintenance, materials and supplies: P
- Taxes and fees paid to regulatory authorities: P
- Commissions and advertising (commissions paid to agents, collection fees and other commissions): P
- Cost of handsets sold: P
- Programming and content costs: P
- Other Costs totaled P
Our bad debt ratio was
Other operating costs (including charges for lawsuits and other contingencies, energy and other public services, insurance, rents and internet capacity) totaled P
- Depreciation, amortization and impairment of fixed assets amounted to P
Net Financial Results (including Financial Expenses on Debt and Other Financial Results) were P
in million of P$ | 1Q21 | 1Q22 | Var |
RECPAM | 5,484 | 11,920 | 6,436 |
Net Interests | (4,665) | 156 | 4,821 |
FX results | 12,561 | 14,708 | 2,147 |
Results of investments | (537) | (2,657) | (2,120) |
Others | (2,341) | (1,787) | 554 |
Total | 10,502 | 22,340 | 11,838 |
Our income tax includes the following effects:
(i) the tax to be paid according to local tax legislation, and
(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.
Our income tax amounted to a positive amount of P
On May 6, 2022, the Company filed the Income Tax affidavit corresponding to fiscal year 2021, including:
(i) a restatement of the tax amortizations of all its fixed assets and intangible assets pursuant to the requirements of sections 87 and 88 of the Income Tax Law;
(ii) the allocation of the computable tax losses carry forward from previous years in accordance with the procedure provided for in section 25 of said Law.
For further details on the abovementioned, refer to Note 13 to the Financial Statements as of March 31, 2022.
As of March 31, 2022, our net financial debt (cash, cash equivalents plus financial investments and financial NDF & interest rate swaps minus loans) amounted to P
During the 1Q22, the Company invested (including rights of use assets) P
- Projects related to the expansion of TV and internet services to improve our transmission and access speed.
- Deployment and modernization of our 4G mobile access sites, supporting the growth in the coverage of our mobile network.
- 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 (Fiber to the home) architecture.
- New customer contact systems.
Issuance of Class 12 and 13 Local Notes
Class 12
Issuance Date: March 9, 2022.
Amount Issued: US
Maturity Date: March 9, 2027.
Amortization: Bullet.
Interest Rate and payments:
Class 13
Issuance Date: March 9, 2022.
Amount Issued: P
Maturity Date: September 9, 2023.
Amortization: Bullet.
Interest Rate and payments: BADLAR +
Loan with China Development Bank Shenzhen Branch (CDB):
During the first quarter of 2022, the Company received new disbursements under this credit facility for a total of RMB 120.4 million, equivalent to P
Finnvera
On March 31, 2022, the Company received a disbursement of US
Preliminary injunction
On April 22, 2022, we informed of the decision rendered by the Federal Administrative Litigation Matters Court No. 8 in the proceedings "Telecom Argentina S.A. a/EN-Enacom and other re. preliminary injunction (Autonomous)" (Docket No. 12,881/2020) whereby the Court decided to further extend for a period of 6 (six) months the preliminary injunction previously granted to us according to section 5 of Law N° 26,854.
Ordinary and Extraordinary General Shareholders' Meeting held on April 27, 2022
The Ordinary and Extraordinary General Shareholders' Meeting held on April 27, 2022 approved, among other matters, the following:
The Board's proposal, adjusted as of March 31, 2022 using the National Consumer Price Index (National CPI) published on April 13, 2022 in accordance with the provisions of CNV Resolution No. 777/2018, with respect to Retained Earnings as of December 31, 2021 which reported a positive balance of P
i) allocating P
ii) allocating P
iii) Reclassify the amount of P
- Granting the Board of Directors the authority to withdraw, before June 30, 2022, the "Facultative Reserve to maintain the capital investments level and the current level of solvency of the Company" in an amount which allows to distribute a combination of 2030 Global Bonds and 2035 Global Bonds as dividends in kind with a market value as of its valuation date of up to P
Núcleo S.A. – Dividend distribution
Nucleo's Ordinary Shareholders' Meeting held on April 21, 2022 decided to distribute dividends for a total of Guaraníes 150,000 million (equivalent to
Telecom Argentina is a leading telecommunications company in Argentina, where it offers, either itself or through its controlled subsidiaries local and long distance fixed-line telephony, cellular, data transmission, and pay TV and Internet services, among other services. Additionally, Telecom Argentina offers mobile, broadband and satellite TV services in Paraguay and pay TV services in Uruguay. The Company commenced operations on November 8, 1990, upon the Argentine government's transfer of the telecommunications system in the northern region of Argentina.
As of March 31, 2022, Telecom Argentina had 2,153,688,011 shares issued and outstanding.
For more information, please contact Investor Relations:
Fernando Balmaceda (5411) 4968 5222 | Luis Fernando Rial Ubago (5411) 5112 7218 | Tomás Pellicori (5411) 5524 7692 |
For information about Telecom Argentina's services, visit:
www.telecom.com.ar
www.personal.com.ar
www.personal.com.py
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 Argentina, Paraguay, Uruguay and the United States; (v) the Company's outlook for new and enhanced technologies; (vi) the effects of operating in a competitive environment; (vii) the industry conditions; (viii) the outcome of certain legal proceedings; and (ix) regulatory and legal developments. Forward-looking statements may be identified by words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "will," "may" and "should" or other similar expressions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. In addition, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Many factors could cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by forward-looking statements. These factors include, among others: (i) the Company's ability to successfully implement our business strategy and to achieve synergies resulting from the Merger; (ii) the Company's ability to introduce new products and services that enable business growth; (iii) uncertainties relating to political and economic conditions in Argentina, Paraguay, Uruguay and the United States, including the policies of the new government in Argentina; (iv) the impact of political developments, including the policies of the new government in Argentina, on the demand for securities of Argentine companies; (v) inflation, the devaluation of the peso, the Guaraní and the Uruguayan peso and exchange rate risks in Argentina, Paraguay and Uruguay; (vi) restrictions on the ability to exchange Argentine or Uruguayan pesos or Paraguayan guaraníes into foreign currencies and transfer funds abroad; (vii) the impact of currency and exchange measures or restrictions on our ability to access the international markets and our ability to repay our dollar-denominated indebtedness; (viii) the creditworthiness of our actual or potential customers; (ix) the nationalization, expropriation and/or increased government intervention in companies; (x) technological changes; (xi) the impact of legal or regulatory matters, changes in the interpretation of current or future regulations or reform and changes in the legal or regulatory environment in which the Company operates, including regulatory developments such as sanctions regimes in other jurisdictions (e.g., the United States) which impact on the Company's suppliers; (xii) the effects of increased competition; (xiii) reliance on content produced by third parties; (xiv) increasing cost of the Company's supplies; (xv) inability to finance on reasonable terms capital expenditures required to remain competitive; (xvi) fluctuations, whether seasonal or in response to adverse macro-economic developments, in the demand for advertising; (xvii) the Company's ability to compete and develop our business in the future; (xviii) the impact of increased national or international restrictions on the transfer or use of telecommunications technology; and (xix) the impact of the outbreak of COVID-19 on the global economy and specifically on the economies of the countries in which we operate, as well as on our operations and financial performance. Many of these factors are macroeconomic and regulatory in nature and therefore beyond the control of the Company's management. Should one or more of these risks or uncertainties materialize, or underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, intended, planned or projected. The Company does not intend and does not assume any obligation to update the forward-looking statements contained in this document. These forward-looking statements are based upon a number of assumptions and other important factors that could cause our actual results, performance or achievements to differ materially from our future results, performance or achievements expressed or implied by such forward-looking statements. Readers are encouraged to consult the Company's Annual Report on Form 20-F and the periodic filings made on Form 6-K, which are periodically filed with or furnished to the United States Securities and Exchange Commission, as well as the presentations periodically filed before the Argentine Securities and Exchange Commission (Comisión Nacional de Valores) and the Buenos Aires Stock Exchange (Bolsas y Mercados Argentinos), for further information concerning risks and uncertainties faced by the Company.
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SOURCE Telecom Argentina S.A.
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