EUR 850.00 For Business Accounts Only

Morningstar | AMOV Updated Star Rating from 17 Jan 2019

Currency movements created some lumpiness in America Movil’s third-quarter results, but the company performed well overall in most major markets, especially Mexico. We expect to maintain our fair value estimate at $18 per ADR and our narrow moat rating.

Revenue in Mexico grew 8.4% versus a year ago, the fastest pace in several years, on steady wireless customer growth and another nice increase in revenue per customer. Movil has added nearly 1 million postpaid wireless customers over the past year, expanding this portion of its base by 6%. Customers across the postpaid and prepaid bases also continue to demand more data capacity. Revenue per wireless customer increased 7.5% to MXN 149 ($7.85) per month, the sixth consecutive quarter of more than 7% growth. The Mexican EBITDA margin increased 2 percentage points versus a year ago to 33.5%, continuing the steady recovery from the impact of AT&T’s entry into the market roughly three years ago.

In Brazil, local revenue has held essentially steady over the past year, with gains in wireless and losses in the fixed-line business offsetting each other. The weak real pulled revenue in the country down 14% in Mexican peso terms, however. Movil has expanded its postpaid wireless business consistently in this market as well, adding 472,000 net customers during the quarter. Nearly 38% of its Brazilian wireless base is on a postpaid plan, up from 27% two years ago. The wireless market remains highly competitive, but average revenue per customer still grew 13% to BRL 17.22 ($4.35) per month. On the fixed-line side, Movil is expanding its Internet access business but not fast enough to offset declines in phone revenue. Strong cost controls lifted the Brazilian EBITDA margin slightly year over year to 29.3%, excluding a one-time tax benefit.