Mexican telecommunications giant America Movil (AMXL.MX)reported on Tuesday its second-quarter net profit plunged 68% to 13.683 billion pesos ($679 million), hurt by higher financing costs.
The company, which is controlled by the family of Mexican billionaire Carlos Slim, said revenues rose 3.3% from the year-earlier period, to 217.391 billion pesos.
“Concerns associated with high inflation dominated market sentiment,” America Movil said, adding that the U.S. dollar had appreciated against all major currencies in the region of the company’s operations.
Quarterly results were hit by 18.1 billion pesos in financing costs, of which approximately half were net interest payments. That compared with a financial gain of 17.2 billion pesos in the year-ago quarter.
Analysts at Mexican brokerage operator Monex called the results positive, citing America Movil’s acquisition of Brazilian rival Oi as well as a recovery in the consumption of the service and data segments.
The company’s efficient cost controls implied “an improvement at the level of margins compared to previous quarters, in addition to a significant migration of prepaid to postpaid customers,” the analysts said.
America Movil said it added 1.8 million postpaid customers, and 1.3 million new subscribers in the prepaid customer segment.
The company has pledged a $1.8 billion investment in the rollout of its 5G network in Mexico with the goal of covering 100 cities by the end of the year.
($1 = 20.1335 Mexican pesos at end-June)