Telecom Argentina S.A. announces consolidated results for the first quarter of fiscal year 2023 ("1Q23") **
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 December 31, 2018 inclusive. Accordingly, the reported figures corresponding to 1Q23 include the effects of the adoption of inflationary accounting in accordance with IAS 29. Finally, comments related to variations of results of 1Q23 and vs. 1Q22 mentioned in this press release correspond to "figures restated by inflation" or "constant".
- For the purposes of the analysis, it should be noted that the results presented on a comparative basis (March 2022) contain the effect of the year-over-year inflation as of March 2023, which was
104.3% . - Consolidated Revenues amounted to P
$214,818 million in 1Q23 (-10.4% in constant currency vs. 1Q22), in a context of a strong inflationary acceleration. Service Revenues totaled P$200,782 million (-10.1% in constant currency vs. 1Q22). - Mobile clients in
Argentina reached 20.5 million in 1Q23 (+321 thousand vs. 1Q22), cable TV subscribers totaled approximately 3.4 million in the same period (-140 thousand vs. 1Q22), while broadband accesses amounted to 4.1 million (-156 thousand vs. 1Q22). - In 1Q23, Operating Income before Depreciation and Amortization amounted to P
$65,046 million (-21.8% vs. 1Q22), while our operating margin before D&A was30.3% . - During 1Q23, the Company recorded a net income of P
$28,483 million (vs. P$48,510 million in 1Q22). - Investments (including right-of-use assets) amounted to P
$34,528 million in 1Q23, which represents16.1% of our Consolidated Sales. - Net Financial Debt amounted to P
$477,923 million in 1Q23 (-6,6% in constant currency vs. 1Q22).
**Unaudited non-financial information
(in million P$ adjusted by inflation, except where noted)** | IAS 29 | IAS 29 | Δ $ | Δ % | |||||
As of Mar-31, | As of Mar-31, | ||||||||
2023 | 2022 | ||||||||
Consolidated Revenues | 214,818 | 239,787 | (24,969) | -10.4 % | |||||
Operating Income before D&A | 65,046 | 83,130 | (18,084) | -21.8 % | |||||
Operating Income (loss) | (3,090) | 2,568 | (5,658) | - | |||||
Net income (loss) before income tax expense | 16,710 | 48,453 | (31,743) | -65.5 % | |||||
Net income (loss) attributable to Controlling Company | 27,759 | 48,063 | (20,304) | - | |||||
Shareholders' equity attributable to Controlling Company | 996,389 | 969,405 | 26,984 | 2.8 % | |||||
Net Financial Debt | (477,923) | (511,819) | 33,896 | -6.6 % | |||||
Investments in PP&E, intangible assets & rights of use assets * | 34,528 | 38,373 | (3,845) | -10.0 % | |||||
Fixed lines in service (in thousand lines) *** | 2,954 | 3,104 | (149) | -4.8 % | |||||
Mobile customers (in thousand) | 22,795 | 22,405 | 390 | 1.7 % | |||||
Personal ( | 20,484 | 20,163 | 321 | 1.6 % | |||||
Núcleo ( | 2,311 | 2,242 | 69 | 3.1 % | |||||
Broadband accesses in | 4,082 | 4,238 | (156) | -3.7 % | |||||
Pay TV Subscribers (in thousand) | 3,395 | 3,535 | (140) | -4.0 % | |||||
Average Billing per user (ARPU) Fixed Telephony / voice (inP$ - Restated by inflation) | 1,618.3 | 1,983.5 | (365.2) | -18.4 % | |||||
Average Revenue per user (ARPU) Mobile Services - Personal (inP$ - Restated by inflation) | 1,307.4 | 1,394.3 | (86.9) | -6.2 % | |||||
Average Revenue per user (ARPU) Broadband (inP$ - Restated by inflation)**** | 3,641.0 | 3,894.9 | (253.9) | -6.5 % | |||||
Average Revenue per user (ARPU) Cable TV (inP$ - Restated by inflation)**** | 3,728.3 | 4,311.1 | (582.8) | -13.5 % |
* (in constant currency - includes right-of-use assets as of March 31, 2022 for P
**(Figures may not add up due to rounding)
*** (It includes IP telephony lines, which amounted to approximately 807,000 and 1.17 million as of March 31, 2022, and March 31, 2023, 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 March 31, 2023.
The following table shows the evolution of the national consumer price index (National CPI - according to INDEC's official statistics) as of March 31, 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 March 31. 2023 | |
Price Index Variation | 50.9 % | 94.8 % | 104.3 % |
3-month cumulative (Since December 22) | n/a | n/a | 21.7 % |
During the 1Q23, Consolidated Revenues amounted to P
Mobile Services
As of March 31, 2023, total mobile subscribers in
Mobile Services in
As of March 31, 2023, total mobile subscribers amounted to approximately 20.5 million (+321 thousand vs. 1Q22). Postpaid clients represented
In 1Q23, mobile service revenues in
During 1Q23, the Company continued to enhance its customers' mobile internet experience with the deployment of 4G and 4G+ networks throughout the country, reaching more than 14.8 million customers with 4G devices. Additionally, Personal was awarded by Ookla, the global leader in data testing and network usage analysis, as the Fastest Mobile Network in
The Company continued preparing for the introduction of 5G technology by expanding the coverage, availability, and capacity of the network. As of the end of 1Q23, 194 5G DSS sites were enabled in
Personal in
As of March 2023, Núcleo's subscriber base reached 2.3 million clients. Of the total number of clients,
Núcleo's mobile service revenues during 1Q23, amounted to P
Cable TV Services
Cable TV service revenues reached P
Flow continued to evolve with new features, innovative and quality content through partnerships with producers, becoming the most important integrated platform in
During 1Q23, as part of the technological evolution of the Flow platform, ISDB-T was offered in a staggered manner to the analog pay-TV customer base for digitalization of the service. This new solution allow customers to have a digital service through their traditional cable connection without the need for a decoder.
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 March 31, 2023) reached P
The corporate segment continues to develop new solutions to support businesses in enhancing their operations. During 1Q23, the Company continued to assist businesses in their digital transformation journey, supporting the evolution and growth of their e-commerce platforms, logistics, and stock movements, among other services. Additionally, in the first quarter of the year, the Company announced its partnership with Ituran, a leading innovation and technology Company, to provide the vulnerability analysis/test solution and support corporate security processes in its subsidiaries in
Internet Services
Internet services revenues totaled P
Additionally, broadband ARPU (restated in constant currency as of March 31, 2023) amounted to P
As of March 31, 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 over 955,000 customers. During the first quarter, Personal Pay continued to expand the differentials of its product, incorporating the new functionality of remunerated balances for all its users, which allows them to generate profits by simply having their money available in the wallet.
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
$51,669 million in 1Q23 (+4.4% vs. 1Q22). Total employees amounted to 21,681 as of 1Q23. - Interconnection and transmission costs (including roaming, international settlement charges and lease of circuits): P
$6,408 million (-12.6% vs. 1Q22). - Fees for services, maintenance, materials and supplies: P
$25,185 million (-1.6% vs. 1Q22). - Taxes and fees paid to regulatory authorities: P
$16,542 million (-9,8% vs. 1Q22). These costs represent7.7% and7.6% of total revenues as of 1Q23 and 1Q22, respectively. - Commissions and advertising (commissions paid to agents, collection fees and other commissions): P
$12,517 million in 1Q23 (-4.6% vs. 1Q22). - Cost of handsets sold: P
$9,968 million (-18.8% vs. 1Q22). These costs decreased mainly due to a lower volume of handsets sold, partially offset by an increase in average cost of sales compared to 1Q22. - Programming and content costs: P
$12,316 million (-19.6% vs. 1Q22). Said reduction was mainly explained by commercial efficiencies. - Other Costs totaled P
$15,167 million (-0.2% vs. 1Q22), of which bad debt expenses reached P$6,499 million (-0.6% vs. 1Q22). - Our bad debt ratio was
3.0% as of March 31, 2022 (vs2.7% in 1Q22). The increase was mainly due to the deteriorating economic situation inArgentina , which has a direct impact on our bad debt ratios. - Other operating costs, including charges for lawsuits and other contingencies, energy and other public services, insurance, rents and internet capacity, totaled P
$8,668 million (+0.1% vs. 1Q22). - Depreciation, amortization and impairment of fixed assets amounted to P
$68,136 million (-15,4% vs. 1Q22). This charge also includes the impact of the amortization of assets incorporated after March 31, 2022, partially offset by the effect of the assets that were completely amortized after such date.
Net Financial Results (including Financial Expenses on Debt and Other Financial Results) were P
In millions of $ | 1Q23 | 1Q22 | Var |
Exchange differences | 11,472 | 30,047 | (18,575) |
Investment results | (2,848) | (5,428) | 2,580 |
Net interest | (1,775) | 319 | (2,094) |
RECPAM | 16,018 | 24,352 | (8,334) |
Others | (3,492) | (3,650) | 158 |
Total | 19,375 | 45,640 | (26,265) |
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
As of March 31, 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.
During the 1Q23, 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. As of March 31, 2023, 4G/LTE deployment achieved a coverage of
96% of the urban population. - 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.
- New systems to streamline our customer relationship management.
Acquisition of stake in Open Pass Holding Corp.
On April 25, 2023, the Company subscribed for 1,000 ordinary shares, with one vote each of Open Pass Holding Corp, representing
Open Pass Holding Corp is a company incorporated in the state of
Through this acquisition, the strategic objective is to ensure the continuity of the services provided by Open Pass, as well as the scalability and future regional evolution of the Personal Pay platform.
Ordinary and Extraordinary General Shareholders' Meeting
The Ordinary and Extraordinary General Shareholders' Meeting held on April 27, 2023 approved, among other matters, the following:
– To approve the proposal of the Board of Directors, expressed in purchasing power currency as of March 31, 2023, using the National CPI in accordance with Resolution CNV No. 777/18, regarding the negative Unassigned Results as of December 31, 2022, amounting to P
– Delegate powers to the Board of Directors to release, by December 31, 2023, the "discretionary reserve to maintain the level of investments in capital goods and the current solvency level of the Company" in an amount sufficient to distribute Global Bonds 2030 as dividends in kind, up to a nominal value of
Dividend Distribution and Reserve Withdrawal
On May 3, 2023, in exercise of the authority delegated by the General Ordinary and Extraordinary Shareholders' Meeting held on April 27, 2023, the Board of Directors of Telecom Argentina resolved:
- To distribute as dividends in kind Global Bonds of the Argentine Republic amortizable in US Dollars maturing on 07/09/2030 (Code GD30 - ISIN US040114HS26) (the "2030 Global Bonds"), for a nominal value of
US , at a rate of$ 411,214,954 US 2030 Global Bonds per share of the Company.$ 0.19 0935248 - Therefore, proceed to partially withdraw the "Voluntary reserve to maintain the capital investments level and the Company's current level of solvency" in the amount of P
$47,700,934,664.
Export credit line guaranteed by Export Development Canada (EDC).
On May 5, 2023, we submitted a proposal for an export credit facility for an aggregate principal amount of up to U.S.
The proceeds of the loans made under the Credit Facility will be used to finance up to
Telecom Argentina is a leading telecommunications company in
As of March 31, 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.