Telecom Argentina S.A. announces consolidated annual results ("FY22") and fourth quarter of fiscal year 2022 ("4Q22") **
BUENOS AIRES, March 9, 2023 /PRNewswire/ --
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 FY22 include the effects of the adoption of inflationary accounting in accordance with IAS 29. Finally, comments related to variations of results of FY22 and vs. FY21 mentioned in this press release correspond to "figures restated by inflation" or "constant".
*Market Cap as of March 8th, 2023
* (in constant measuring unit – includes adds of rights of use assets of P$20.997 million and P$35.363 million as of December 31, 2022, and December 31, 2021, respectively)
Telecom Argentina S.A. ('Telecom Argentina') - (NYSE: TEO; BYMA: TECO2), announced today a net loss of P$205,640 million for the period ended December 31, 2022 (-P$225,002 million vs. FY21). The net loss attributable to the controlling company was P$207,833 million (-P$224,711 million vs. FY21).
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 December 31, 2022.
The following table shows the evolution of the consumer price index (National CPI - according to INDEC's official statistics) for the last three fiscal years, which were used to restate the figures in constant currency:
During the FY22, Consolidated Revenues amounted to P$729,182 million, from which Service Revenues totaled P$680.561 million.
Consolidated Operating Revenues
As of December 31, 2022, total mobile subscribers in Argentina and Paraguay amounted to 22.5 million. In FY22, total mobile services revenues represented P$293.112 million (-P$20.760 million or -6.6% vs. FY21).
Mobile Services in Argentina
As of December 31, 2022, total mobile subscribers amounted to approximately 20.2 million (+114 thousand vs. FY21). Postpaid clients represented 43% of our subscriber base (vs. 41% in FY21).
In FY22, mobile service revenues in Argentina amounted to P$268.035 million (-4.7% vs FY21). Mobile internet revenues accounted for 86% of mobile service revenues (vs. 75% in FY21). The average monthly revenue per user ("ARPU" – restated in constant currency as of December 31, 2022) amounted to P$1,102.6 during FY22 (-8.3% vs. FY21). The effect generated by the restatement in terms of the December 31, 2022, current measurement unit (included in the ARPU) amounted to P$282.5 and P$681.3, for FY22 and FY21, respectively. The average monthly churn rate was 2.3% (vs. 1.5% in FY21).
During FY22, the Company prepared to receive 5G technology by expanding the coverage, availability and capacity of the network through a technological reconversion and continuing the use of 4G. As of December 2022, we count with 180 5G mobile sites, mostly operating under DSS, located in Buenos Aires, Rosario, the Atlantic Coast, Córdoba, Santa Fe, Corrientes, Posadas and Paraná, with the objective of preparing the technical and regulatory conditions that allow the full development of the 5G network.
Personal in Paraguay ('Núcleo')
As of December 31, 2022, Núcleo's subscriber base reached 2.3 million clients. Prepaid and postpaid customers represented 79% and 21%, respectively.
Núcleo's mobile service revenues during FY22, amounted to P$25,077 million (-22.9% vs. FY21), mainly due to a decrease in ARPU measured in constant pesos, which was partially offset by the appreciation of the Guaraní against the Argentine peso.
Cable TV Services
Cable TV service revenues were P$130,904 million in FY22 (-P$29,898 million or -18.6% vs. FY21). Cable TV subscribers totaled approximately 3.5 million (-84 thousand vs. FY21). The monthly Cable TV ARPU (restated in constant currency as of December 31, 2022) reached P$3,006.9 during FY22 (vs. P$3,668.3 in FY21). The effect generated by the restatement in terms of the measuring unit as of December 31, 2022, included in ARPU amounts to P$801,6 and P$2,091.8, for FY22 and FY21, respectively. The average monthly churn rate as of December 31, 2022, and as of December 31, 2021, was 1.3% and 1.1%, respectively.
Flow continued to strengthen its content offer by incorporating new products in music, national and international films, and gaming. During FY22, Flow subscribers alone reached 1.3 million.
Additionally, we continued to deploy the ISDB-T technology for analogic Flow subscribers in new cities, reaching more than 1.5 million subscribers in the Autonomous City of Buenos Aires and the province of Buenos Aires. Likewise, as part of the constant updating of devices, Flow commercially presented a new self-installing decoder with differential surround sound properties, Google Assistant, integrated Chromecast, 4K resolution, HDR, Dolby Vision, among others. We have also presented a new Flow Flex service, which consists of a flexible paid TV proposal that allows customers to contract Flow's services for a fixed period of time, with packages of 3, 7, 15 and 30 days.
Fixed Telephony and Data Services
Revenues generated by fixed telephony and data services reached P$89,023 million in FY22 (-P$25,769 million or -22.4% vs. FY21).
The monthly fixed voice ARPU (restated in constant currency as of December 31, 2022) reached P$1,445.0 (vs. P$1,513.9 in FY21). The effect generated by the restatement in terms of the measuring unit as of December 31, 2022, included in the ARPU amounted to P$441.4 and P$867.7 for the FY22 and FY21, respectively.
The corporate segment continues to develop new solutions to help companies boost their business and continue to evolve digital transformation in this new context. During FY22 we continued to offer value proposals, including Cybersecurity as an essential axis in this transformation process. Within this framework, the Company included in its offer Oracle Cloud solutions for companies that include application servers, databases and more. Additionally, Telecom reaffirmed the alliance with the Chamber of the Argentine Software Industry (CESSI) to work together with the more than 1,800 member companies, as technological advisors and help them in their digital transformation and evolution processes.
Internet services revenues totaled P$161,740 million during FY22 (-P$15,070 million or -8.5% vs. FY21). As of December 31, 2022, total broadband accesses reached approximately 4.1 million (-132 thousand vs. FY21). The monthly churn rate of Internet services was positioned at 1.6% and 1.5% as of December 31, 2022 and 2021, respectively
Additionally, broadband ARPU (restated in constant currency as of December 31, 2022) amounted to P$3,052.4 in FY22 (vs. P$3,364.3 in FY21). The effect generated by the restatement in terms of the measuring unit as of December 31, 2022, included in the ARPU amounted to approximately P$798.3 and P$1,912.0 for the FY22 and FY21, respectively.
The Company continued to enhance the home connectivity experience of its customers, increasing the deployment of Fiber Optic to the Home (FTTH) in different locations throughout the country. These connections reach up to 300 megabytes, with low latency, multi-device connection and including the option of contracting Flow as an additional service, among other advantages.
Additionally, during the end of this fiscal year, Personal announced that it doubled the internet speed to all its home customers (with HFC, FTTH technology), going from 50 to 100 megabytes, from 100 to 300 megabytes and from 300 to 500 megabytes, and the lowest speeds went to 50 megabytes. Customers with a service of 100 Mb or more represent 79% of the customer base as of December 31, 2022, while in 2021 they represented 30%.
Revenues from equipment sales
Equipment revenues amounted to P$48,621 million (-P$9,420 million or -16.2% vs. FY21). Said decrease was mainly due to a lower volume of handsets sold (-15%), offset by an increase their average price of 66%, compared to FY21
Our virtual wallet service, Personal Pay, which is constantly evolving, managed to find a place in this rapidly growing market in the country and the region, and ended the year with more than 700,000 customers. Leveraged by the strength of the mobile services ecosystem, customers choose reliability and convenience, and that's the greatest differential of Personal Pay.
Consolidated Operating Costs
Consolidated Operating Costs (including D&A and impairment of fixed assets) totaled P$1,024,123 million in FY22 (+P$189,863 million or +22.8% vs. FY21). Excluding D&A and impairment of fixed assets, operating costs experienced a reduction of 7.3%.
The cost breakdown was as follows:
Net Financial Results
Net Financial Results (including Financial Expenses on Debt and Other Financial Results) were P$61,978 million in FY22 (vs. P$88,921 million in FY21), mainly due to:
Our income tax includes the following effects:
Income tax gain amounted to P$26,504 million in FY22 (vs. a loss of P$64,900 million in FY21). The gains according to item (i) above amounted to P$17,521 million in FY22 (vs. P$36,290 million in FY21) and the income tax effect related to the application of the deferred tax method described in item (ii) above was a gain of P$8,983 million in FY22 (vs. a loss of P$28,610 million in FY21).
Consolidated Net Financial Debt
As of December 31, 2022, our net financial debt (cash, cash equivalents plus financial investments and financial NDF* & interest rate swaps minus loans) amounted to P$420,446 million, decreasing P$39,822 when compared to the net financial debt as of December 31, 2021, adjusted by inflation.
* Contemplates rate swaps and NDF (non-delivery forwards) agreements.
Investments in PP&E, intangible assets and rights of use assets
During the FY22, the Company invested (including rights of use assets) P$147,266 million (-27.1% vs. FY21). Said investments represented 20.2% of consolidated revenues in FY22. Investments without including additions for right of use totaled $126,269 million (-24.2% vs. FY21).
The investments were focused on
Relevant financial events of the period
Dismissal of appeals
On November 15, 2022, in proceedings "Telecom Argentina S.A. vs. EN-ENACOM and other re. precautionary measure (Autonomous)" (File No. 12.881/2020) the National Supreme Court of Justice dismissed the complaint appeals filed by the National Government and ENACOM against the ruling of the Chamber II of the Federal Court of Appeals on Administrative Litigation Matters that denied the extraordinary appeals filed by the National Government and ENACOM against the ruling of said Chamber that allowed the appeal filed by the Company, revoked the decision of the instance of origin and admitted the precautionary measure requested by Telecom Argentina, ordering the suspension of the effects of articles 1, 2, 3, 4, 5 and 6 of Decree No. 690/2020 and ENACOM Resolutions No. 1466/2020, 1467/2020 and 204/21, and its consequent inapplicability in relation to the Company.
Resignation of a member of the Board of Directors and Ordinary and Extraordinary General Shareholders Meeting
On November 17, 2022, Mr. Sebastian Bardengo addressed a letter to the Chairman of the Board of Directors notifying that, due to personal reasons, he submitted his resignation as member of the Board of Directors and member of the Executive Committee of Telecom Argentina effective as from December 31, 2022.
In light of this resignation, the Shareholders' Meeting summoned for December 21, 2022 resolved, among other issues, the following:
Loans with CDB, Finnvera, EDC and Cisco Systems Capital Corporation
Chinese Development Bank Shenzhen Branch (CDB): During 2022, the Company subscribed new tranches for a total amount of RMB488 million (equivalent to US$70.5 million).
Finnvera: During 2022, the Company received disbursements for a total amount of US$11.4 million. These disbursements complete the total amount committed for this credit line.
Export Development Canada (EDC): In June and October 2022, the Company received disbursements for a total amount of US$23 million. These disbursements complete the total amount committed for this line of credit.
Cisco Systems Capital Corporation: During 2022, the Company received disbursements for a total amount of US$16 million.
These proceeds were used for the acquisition of telecommunication equipment.
Relevant events after December 31, 2022
Class 14 local notes - Issuance
Issuance Date: February 10, 2023.
Amount Issued: US$62.4 million to be paid in Argentine pesos at the applicable exchange rate.
Maturity Date: February 10, 2028.
Interest Rate and payments: 1.00% p.a, quarterly interest payments
Decease and designation of Director
On February 11, 2023, the unfortunate loss of Engr. Germán Horacio Vidal, member of the Board of Directors of Telecom Argentina and member of the Company's Audit Committee and Executive Committee, occurred. Both his career in the industry and his commitment to the future of the Company have been remarkable.
For this reason, on February 28, 2023, the Company's Supervisory Committee appointed Mr. Ignacio Cruz Moran as Director of Telecom Argentina to act until the next Shareholders' Meeting according to section 258, second paragraph of Argentine General Corporations Law. Also, the Board of Directors appointed Mr. Ignacio Cruz Moran as member of the Company's Audit Committee and Executive Committee.
On March 8, 2023, 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 six months the preliminary injunction previously granted to us according to section 5 of Law No. 26,854.
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 December 31, 2022, Telecom Argentina owns 2,153,688,011 issued and outstanding shares.
For more information, please contact Investor Relations:
For information about Telecom Argentina's services, visit:
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.
SOURCE Telecom Argentina S.A.
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