reports
- Soomit Datta
- Soomit Datta
AMX (Buy, TP: $24, +25%) Why a seemingly (quite) healthy Telco just f...
WOM Chile filed for Chapter 11 last month (April 1), followed a couple of weeks later by a local filing for WOM Colombia. Two filings in one month. Colombia’s relatively modest financing difficulties were likely sealed by the Chilean filing and we review events in Chile to work out how a seemingly successful scaled wireless operator (close to 25% market share of service revenue, 37% EBITDA margins) ended up here.
- Soomit Datta
AMX(Buy, TP: $24, +24%) Televisa (Neutral, $3.5, +11%) Megacable (Neut...
The market continued to eek out broadband growth in Q1, with Megacable leading the charge. We applaud management’s execution here and the double digit revenue and EBITDA growth, though this now seems embedded in expectations; we think it’s time to close out Megacable stock gains (30% YTD), trading on a 5.5% EFCF yield for 2025. Our target remains MXN55, though we have taken out the probability of cable-cable deal synergies, offset by upgrades following Q1s.
- Soomit Datta
AMX (Buy, TP: $24, +40%) AMX - Q1 24: Accelerating revenue and EBITDA...
AMX reported strong Q1 numbers after close, coming in ~2% ahead of consensus revenue and EBITDA. Growth accelerated (to 5% y/y from 3.7% in Q4) coming from Mexico and Brazil, and both fixed and wireless. Brazil EBITDA also saw strong support on the cost side. Capex was down y/y in Q1, in keeping with the FY 24 guide (~$7 billion, down from $8.8 billion in 2023); we expect mid-term capex to be provided at the upcoming May 7th Investor Day, and see potential for consensus estimates to come down he...
Moody's assigns Baa1 rating to America Movil's proposed notes; stable ...
Moody's Ratings (Moody's) has today assigned a Baa1 rating to America Movil, S.A.B. de C.V.'s ("America Movil") proposed up to MXN20,000 million ($1.1 billion) in senior unsecured global notes due 2029. America Movil's existing ratings remain unchanged. The outlook remains stable. Proceeds will be u...
- Soomit Datta
Mexican Cable/FTTH – Capex down, promotions lifting; Buy MEGA; TV/TPLA...
Following TotalPlay and Televisa results at the end of last week, and Megacable the week prior, we highlight key positive conclusions from the Mexican reporting season: 1/ Capex is coming down across the board in Mexico in FY 24 driving an uplift in OpFCF margin for all players, 2/ Lower promotional intensity through YE is helping ARPUs and would be supportive if it holds.
- Soomit Datta
- Soomit Datta
MEGA (Buy, TP: MXN55, +20%) Megacable Q4s - The big capex unwind star...
Megacable reported good Q4s last night with strong broadband adds, revenue growth accelerating (to 14% y/y on core cable/FTTH) and perhaps most supportively EBITDA on core returning to 12% growth on new build operational leverage; EBITDA was flat only a couple of quarters go and the guide is for margin expansion in FY 24 and beyond (ahead of us and the market).
- Soomit Datta
TV (Neutral, TP: $3.7, +17%) Televisa – Spin Co support for M&A; TVUN...
Ahead of the spin of its non-core assets next week (Feb 20th) we highlight the impact to Televisa: potentially an ex-div move of up to $0.5 per ADR (assuming SpinCo trades at 4x EBITDA, in-line with our implied valuation). Cleaning up the business would be a helpful move ahead of potential M&A (with Megacable). We also run through TVUNI (>100% of target TV equity) Q4 results yesterday, feeling the headwinds of a tough comp in the 2022 World Cup, but with a better outlook for 2024 where we think...
- Soomit Datta
AMX (Buy, TP: $24, +40%) AMX - Solid underlying Q4s, messy Argentina ...
AMX reported solid underlying Q4s last night, coming in 1.5% ahead of expectations for revenue and in-line at EBITDA adjusting for Argentina (which booked a large negative contribution to both given 9m 23 hyperinflation adjustments). Trends are in the main unchanged: Mexican wireless OK but lacking the support from price rises – this may come after the Presidential elections and is arguably needed as a catalyst for better earnings momentum; elsewhere, a return to solid adds in Mexican broadband;...
- Soomit Datta
MEGA (Buy, TP: MXN55, +20%) Megacable - falling Capex outlook driving...
We provide a quick outlook (via a key chart) on the slowing FTTH roll in 2024/25 and how we think this plays into capex, supported also by current stronger peso/$, which we see declining from 2024 helping transform FCF prospects. We also preview numbers ahead of Q4: the last quarter of big capex spend we think, with strong operational momentum anticipated, with some seasonality to EBITDA margin.
- Soomit Datta
ENTEL (Neutral, TP: CLP3,150, -0.3%) Entel - Better Chilean Wireless ...
Entel reported Q4s yesterday after the close. Revenue and EBITDA came in 6-7% (when removing revenue linked to the fibre sale) though this was partly driven by handset sales. Wireless service trends also beat in Chile, and were optically impressive, though in reality enjoyed a much easier comp (Q4 22); we’re not convinced the fundamentals are getting any better and we note price increases for 2024 have yet to be committed to.
- Soomit Datta
LatAm Telcos – 2024 Outlook: Top picks Brazil (TIM and Vivo) and Megac...
After strong stock performance in 2023 we think the Brazilians will continue to perform into 2024 on the back of solid wireless fundamentals: rising prices, revenue/EBITDA > inflation, falling capex/sales – and with IOC (tax) risks in the rear view for now. Shareholder returns are also sector leading whilst valuations are attractive (notably versus quickly falling rates).
Moody's assigns Baa1 rating to America Movil's proposed notes; stable ...
Moody's Investors Service (Moody's) has today assigned a Baa1 rating to America Movil, S.A.B. de C.V.'s ("America Movil") proposed up to MXN20,000 million ($1.1 billion) in Senior Unsecured Global Notes due 2034. America Movil's existing ratings remain unchanged. The outlook remains stable. Proceeds...
Moody's affirms Empresa Nacional de Telecomunicaciones' (ENTEL) Baa3 r...
Moody's Investors Service (Moody's) today affirmed Empresa Nacional de Telecomunicaciones S.A.´s ("ENTEL") Baa3 Long-Term Issuer Rating and the Baa3 ratings for the Senior Unsecured Global Notes due 2024 and the Senior Unsecured Global Bonds due 2026. The outlook was changed to negative from stable....
- Soomit Datta
MEGA (Buy, TP: MXN55, +25%) TV (Neutral, TP: $3.7, +12%) Mexico M&A -...
One year on and speculation as to a merger between Megacable and Televisa (Izzy Cable) is back, as evidenced by the past few days’ share price rally. Over the last year, Izzy has struggled operationally as Megacable has rapidly overlaid Izzy homes. We re-run a merger analysis reflecting the balance of power swing toward Megacable and the likelihood it rather than Televisa take control of the Cable NewCo.
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