Telecom Argentina S.A. announces consolidated results for the nine month period ("9M20") and third quarter of fiscal year 2020 ("3Q20")*
BUENOS AIRES, Argentina, Nov. 9, 2020 /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 9M20 include the effects of the adoption of inflationary accounting in accordance with IAS 29. Finally, comments related to variations of results of 9M20 and vs. 9M19 mentioned in this press release correspond to "figures restated by inflation" or "constant".
*Unaudited non financial data
Telecom Argentina S.A. ('Telecom Argentina') - (NYSE: TEO; BASE: TECO2), announced today a Net Loss of $1,249 million for the period ended September 30, 2020 (-92.8% vs. 9M19). The Net Loss attributable to the Controlling Company was P$1,645 million.
It is worth mentioning, that the comparative figures for the previous fiscal year have been restated so that the resulting comparative information is presented in terms of the current measurement unit as of September 30, 2020.
The following table shows the evolution of the consumer price index (National CPI) according to the official statistics (INDEC), which were used to restate the figures in constant currency:
During 9M20, Consolidated Revenues amounted to P$208,220 million, of which Service Revenues totaled P$197,044 million.
Consolidated Operating Revenues
As of September 30, 2020, mobile clients in Argentina and Paraguay amounted to 20.9 million. In 9M20, mobile services revenues represented P$79,706 million (+P$4,798 million vs. 9M19). The commercial strategy was focused on achieving higher mobile portability through convergent offers and promoting the consumption of mobile internet.
Mobile Services in Argentina
As of September 30, 2020, Personal reached more than 18.7 million subscribers in Argentina (-150 thousand or -0.8% vs. 2Q20). Postpaid clients represented 41% of the subscriber base.
In 9M20, mobile service revenues amounted to P$69,372 million (+6.8% vs 9M19). Mobile internet revenues reached 76% of mobile service revenues (no changes vs. 9M19). The average monthly revenue per user ('ARPU' – restated in constant currency as of September 30, 2020) amounted to P$401.2 during 9M20 (+3.5% vs. 9M19). The effect generated by the restatement in terms of the measuring unit as of September 30, 2020, included in the ARPU amounts to P$35.8 and P$144.1, for the 9M20 and 9M19, respectively. Mobile churn was 2.2% (vs. 2.1% in 9M19).
During the third quarter of the year, Personal launched Mi Negocio Personal, an integrated and personalized virtual store solution designed for entrepreneurs and SMEs. This product was introduced with the objective to continue supporting our clients in a context where they need to have a digital proposal to defend their businesses.
Personal in Paraguay ('Núcleo')
As of September 30, 2020, Núcleo's subscriber base reached 2.2 million clients. Prepaid and postpaid customers represented 83% and 17%, respectively.
Núcleo generated service revenues equivalent to P$10,334 million during 9M20 (+3.6% vs. 9M19). Internet revenues represented 51% of 9M20 service revenues (vs. 50% in 9M19).
Cable TV Services
Cable TV service revenues reached P$40,755 million in 9M20 (-P$4,863 million vs. 9M19). As from March 2020, revenues related to local soccer league programming have not been generated, because the activity was suspended but will return during November 2020. Cable TV subscribers totaled almost 3.6 million (+69 thousand or +2.0% vs. 2Q20). Moreover, the monthly Cable TV ARPU (restated in constant currency as of September 30, 2020) reached P$1,285.3 during 9M20. The effect generated by the restatement in terms of the measuring unit as of September 30, 2020, included in the ARPU amounts to P$114.7 and P$541.5, for the 9M20 and 9M19, respectively. Additionally, the average monthly churn during 9M20 was 0.9% (-1.3% when compared to 9M19).
During the third quarter, the Company continued to promote new content and co-productions for its Flow platform, among others, local film titles as part of its strategy to promote the development of national productions.
Fixed Telephony and Data Services
Revenues generated by fixed telephony and data reached P$31,955 million in 9M20 (-P$2,229 million vs. 9M19).
As a result, the average monthly revenue billed per user ('ARBU' - restated in constant currency as of September 30, 2020) of fixed telephony reached P$542.7 (+1.9% vs. 9M19). The effect generated by the restatement in terms of the measuring unit as of September 30, 2020, included in the ARBU amounts to P$48.5 and P$198.2, for the 9M20 and 9M19, respectively.
During the third quarter, TELECOM | FIBERCORP, continued to develop different initiatives for the corporate segment by providing solutions to companies so that they can continue with their activities, maintaining productivity and growth levels.
Telecom announced its alliance with the IAE Business School, the Business School of Universidad Austral, to work together with entrepreneurs in NAVES, its training, mentoring and networking program, with the aim to strengthen the agents of the digital economy.
Additionally, the Company presented its new IoT agribusiness solution at Expoagro Digital. It is an innovative development of "remote grain monitoring" with automatic switch between fixed and mobile network that guarantees connection and provides tools that allow a better performance and maximum availability of service.
Internet services revenues totaled P$44,053 million during 9M20 (-P$4,938 million vs. 9M19). As of September 30, 2020, total broadband accesses reached almost 4.2 million (+78 thousand or +1.9% vs. 2Q20).
Additionally, broadband ARPU (restated in constant currency as of September 30, 2020) amounted to P$1,199.7 per month in 9M20. The effect generated by the restatement in terms of the measuring unit as of September 30, 2020, included in the ARPU amounts to, approximately, P$107.1 and P$495.9, for the 9M20 and 9M19, respectively.
Moreover, the average monthly churn rate for the period was 1.2% vs. 1.5% in the 9M19. It is worth noting that as of 9M20, 58% of the total customer base had a broadband service of 50Mb or higher (increasing from 33% as of 9M19).
Revenues from equipment sales
Equipment revenues amounted to P$11,176 million (-P$2,565 million vs. 9M19). This reduction was mainly due to a decrease in the quantities sold, partially offset by the increase in the prices of handsets.
Consolidated Operating Costs
Consolidated Operating Costs (including D&A and impairment of fixed assets) totaled P$188,827 million in 9M20 (-P$9,683 million or -4.9% vs. 9M19). Excluding D&A and impairment of fixed assets, operating costs showed a reduction of 8.0%, which contributed to generate an increase of the Operating Income before D&A margin (35.8% in 9M20 vs. 33.3% in 9M19).
The cost breakdown is as follows:
Net Financial Results
Net Financial Results (including Financial Expenses on Debt and Other Financial Results, net) generated a lower loss of P$13,234 million in 9M20 (vs. a loss of P$19,618 million in 9M19) due to:
Consolidated Net Financial Debt
As of September 30, 2020, our net financial debt position (cash, cash equivalents plus financial investments and financial NDF minus loans) totaled P$132,450 million, decreasing by P$11,585 million or -8.0% when compared to the consolidated net financial debt position as of September 30, 2019, which totaled P$144,035 million (restated in terms of the measuring unit as of September 30, 2020).
Investments in PP&E, intangible assets and rights of use assets
During the 9M20, the Company invested P$40,699 million (-32.2% vs. 9M19). These investments represented 19.5% of consolidated revenues in 9M20, and were focused on:
Thanks to the investments in infrastructure done in recent years, Telecom currently counts with the equipment and systems that allow its network to perform efficiently, supporting the increase of up to 50% in home internet data traffic, 70% in mobile voice services and 30% in mobile data, plus a 75% growth in upstream. The renewal of the Company's core platforms (both oriented to customers and the back office) was another of the key factors that allowed to adapt quickly and continue operating normally during the lockdown period.
Decree 690/2020 and amendment to Law No 27.078 (Argentina Digital Law)
On August 22, 2020 was published in the Official Gazette the Decree No. 690/2020 of the National Executive Power, through which it amended the Argentina Digital Law.
As part of the amendments, the status of "competing essential and strategic public services" was introduced to ICT services – fixed telephony, mobile, cable TV and Internet - and to the access to telecommunications networks for and between licensees, being the ENACOM the entity in charge of guaranteeing its effective availability.
The decree mentions that the ENACOM will establish the regulation of ICT services and the suspension of any increases or changes in prices established or announced from July 31, 2020 until December 31, 2020, specifically mentioning the broadcasting services by subscription through physical or radioelectric link and satellite television, as well as fixed or mobile telephony services, in any modality.
The decree has been approved by the Congress in terms of Law No. 26,122, and it has not been regulated yet.
Refinancing of the loans with IFC and IDB Invest
On September 22, 2020, Telecom Argentina refinanced the following loan agreements:
In the case of the loans in items 1 and 2 mentioned above, it was agreed to modify the maturity schedule of all principal maturities that operated during 2021, deferring 85% of them for a period between 24 months and 48 months and prepaying the remaining 15% together with accrued interest and other related expenses.
In the case of items 3 and 4, it was agreed to modify the maturity schedule of all principal maturities whose maturity operated during the last quarter of 2020 and in 2021, deferring 85% of them for a period of between 24 months and 66 months, prepaying the remaining 15% together with accrued interest and other related expenses.
Other Relevant Matters
Call to Extraordinary General Shareholders' Meeting
The Board of Directors of Telecom Argentina in a meeting held on October 13, 2020, which was adjourned until October 16, 2020, resolved to call the shareholders to an Extraordinary General Shareholders' Meeting to be held on November 13, 2020, in order to consider: the total or partial withdrawal of the "Voluntary reserve for future cash dividends" and/or of the "Voluntary reserve to maintain the capital investments level and the Company's current level of solvency", the distribution of cash dividends or dividends in kind or in any combination of both options according to the Company´s current context, and the delegation of powers to the Board of Directors.
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 September 30, 2020, Telecom Argentina has 2,153,688,011 shares issued and outstanding.
View original content:http://www.prnewswire.com/news-releases/telecom-argentina-sa-announces-consolidated-results-for-the-nine-month-period-9m20-and-third-quarter-of-fiscal-year-2020-3q20-301169257.html
SOURCE Telecom Argentina S.A.