Telecom Argentina S.A. announces consolidated results for the nine month period ("9M21") and third quarter of fiscal year 2021 ("3Q21")**
BUENOS AIRES, Argentina, Nov. 9, 2021 /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 9M21 include the effects of the adoption of inflationary accounting in accordance with IAS 29. Finally, comments related to variations of results of 9M21 and vs. 9M20 mentioned in this press release correspond to "figures restated by inflation" or "constant".
*Market Cap as of November 8th, 2021
Telecom Argentina S.A. ('Telecom Argentina') - (NYSE: TEO; BASE: TECO2), announced today a net income of P$1,025 million for the period ended September 30, 2021. The net loss attributable to the controlling company was P$358 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, 2021.
The following table shows the evolution of the consumer price index (National CPI - according to INDEC's official statistics) for the last two fiscal years and as of September 30, 2020 and 2021, which were used to restate the figures in constant currency:
During 9M21, Consolidated Revenues amounted to P$292,983 million, from which Service Revenues totaled P$272,173 million.
Consolidated Operating Revenues
As of September 30, 2021, mobile clients in Argentina and Paraguay amounted to 21.7 million. In 9M21, mobile services revenues represented P$110,898 million (-P$10,631 million vs. 9M20).
Mobile Services in Argentina
As of September 30, 2021, mobile subscribers reached more than 19.5 million in Argentina (+266 thousand vs. 2Q21). Postpaid clients represented 42% of our subscriber base.
In 9M21, mobile service revenues in Argentina amounted to P$98,547 million (-6.8% vs 9M20). Mobile internet revenues reached 73% of mobile service revenues. The average monthly revenue per user ('ARPU' – restated in constant currency as of September 30, 2021) amounted to P$568 during 9M21 (-7.1% vs. 9M20). The effect generated by the inflation adjustment as of September 30, 2021 (included in the ARPU) amounted to P$65.8 and P$246.3, for the 9M21 and 9M20, respectively. Mobile churn was 1.1% (vs. 2.2% in 9M20).
Aiming to promoting financial inclusion through the Fintech industry in Argentina, during this quarter, Personal announced its new Personal Pay virtual wallet service to Beta format. This product is now available to all users with Android operating system. Users can now register and start using the application.
Personal in Paraguay ('Núcleo')
As of September 30, 2021, Núcleo's subscriber base reached 2.2 million clients. Prepaid and postpaid customers represented 82% and 18%, respectively.
Núcleo generated mobile service revenues equivalent to P$12,351 million during 9M21 (-21.6% vs. 9M20), mainly due to a decrease in the number of clients as well as a slight decrease in ARPU, which was partially offset by the appreciation of the Guaraní against the Argentine peso.
Cable TV Services
Cable TV service revenues reached P$57,433 million in 9M21 (-P$4,707 million vs. 9M20). Cable TV subscribers totaled approximately 3.6 million (+16 thousand vs.2Q21). Moreover, the monthly Cable TV ARPU (restated in constant currency as of September 30, 2021) reached P$1,749.2 during 9M21 (vs P$1,959.7 in 9M20). The effect generated by the restatement in terms of the measuring unit as of September 30, 2021 included in the ARPU amounts to P$211.5 and P$789.1, for the 9M21 and 9M20, respectively. Additionally, the average monthly churn during 9M21 and 9M20 was 1.1% and 0.9%, respectively.
During the third quarter of the year, the strategy to close alliances with OTT platforms in order to integrate them to Flow continued. Paramount +, Star + and Amazon Prime Video were incorporated to Flow's integrated applications offer.
Fixed Telephony and Data Services
Revenues generated by fixed telephony and data reached P$41,082 million in 9M21 (-P$7,640 million vs. 9M20).
As a result, the average monthly revenue billed per user ('ARBU' - restated in constant currency as of September 30, 2021) of fixed telephony reached P$708.2 (vs. P$827.5 in 9M20). The effect generated by the restatement in terms of the measuring unit as of September 30, 2021, included in the ARBU amounted to P$88.3 and P$333.3 for the 9M21 and 9M20, respectively.
Regarding the corporate segment, Telecom continued to develop different initiatives to support companies in their productivity and growth.
In the third quarter, and within the framework of commercial initiatives focused on the corporate segment, a strategic alliance was announced with the IBM Cloud business unit, improving the access to hybrid cloud solutions while also adding new IoT products.
Internet services revenues totaled P$62,077 million during 9M21 (-P$5,091 million vs. 9M20). As of September 30, 2021, total broadband accesses reached approximately 4.2 million (+14 thousand vs. 2Q21).
Additionally, broadband ARPU (restated in constant currency as of September 30, 2021) amounted to P$1,580.5 per month in 9M21 (vs. P$1,829.2 in 9M20). The effect generated by the restatement in terms of the measuring unit as of September 30, 2021, included in the ARPU amounted to approximately P$187.4 and P$736.5, for the 9M21 and 9M20, respectively.
The average monthly churn rate for the 3Q21 was 1.5% (vs. 1.2% in 9M20). As of 9M21, 77.2% of our total customer base had a broadband service of 20Mb or higher (increasing from 69.3% as of 9M20).
Revenues from equipment sales
Equipment revenues amounted to P$20,810 million (+P$3,770 million vs. 9M20). Said increase was mainly due to an increase in the number of units sold (+43%), and by the increase in the average prices of handsets.
Consolidated Operating Costs
Consolidated Operating Costs (including D&A and impairment of fixed assets) totaled P$291,798 million in 9M21 (+P$3,890 million or +1.4% vs. 9M20). Excluding D&A and impairment of fixed assets, operating costs showed a reduction of 3.1%.
The cost breakdown was as follows:
- Employees benefits and severance payments: P$60,347 million (+2.4% vs. 9M20). Total employees amounted to 22,846 as of 9M21.
- Interconnection and transmission costs (including roaming, international settlement charges and lease of circuits) totaled P$10,678 million (-8.8% vs. 9M20). This, was mainly due to a decrease in the number of links and sites, partially offset by the FX effect related to services to be paid in US dollars.
- Fees for services, maintenance, materials and supplies: P$33,448 million (+0.4% vs. 9M20). Fees for services decreased by P$455 million and maintenance and material costs increased by P$591 million compared to 9M20.
- Taxes and fees with regulatory authorities: P$22,602 million (-6.0% vs. 9M20). This decrease was mainly due to lower sales in 9M21 vs 9M20.
- Commissions and advertising (Commissions paid to agents, collection fees and other commissions): P$16,530 million (-5.7% vs. 9M20). Said decrease was mainly explained by lower agent commission charges and lower advertising costs.
- Cost of handsets sold: P$14,752 million (+33.7% vs. 9M20). P$14,046 million correspond to the cost of sales of devices in Argentina which increased 39.4% vs. 9M20 mainly due to the increase in prices and quantities sold.
- Programming and content costs: P$20,031 million (-3.7% vs. 9M20). This reduction was explained mainly by commercial efficiencies, which were partially offset by price increases of approximately 40% in almost all of our broadcasting signals.
- Other Costs totaled P$19,197 million (-27.7% vs. 9M20), from which bad debt expenses reached P$5,362 million (-55.4% vs. 9M20).
Our bad debt ratio was 1.8% as of September 30, 2021 (vs. 3.8% in 9M20) thanks to a strong strategy followed by the company to improve its collections.
Other operating costs (including charges for lawsuits and other contingencies, energy and other public services, insurance, rents and internet capacity) totaled P$13,835 million (-4.9% vs. 9M20).
- Depreciation, amortization and impairment of fixed assets amounted to P$94,213 million (+12.2% vs. 9M20). This increase was due to the impact of the amortization of assets incorporated after September 30, 2020.
Net Financial Results
Net Financial Results (including Financial Expenses on Debt and Other Financial Results, net) generated an income of P$30,590 million in 9M21 (vs. a loss of P$20,178 million in 9M20). This variation was mainly due to:
Income tax loss amounted to P$30,960 million in 9M21 (vs. P$11,861 million in 9M20). Said loss mainly includes the effect of the change in the tax rate pursuant to the requirements of Law No. 27,630, which replaced the 25% rate with a scale of increasing rates based on the taxable income of each taxpayer, reaching 35% as of fiscal year 2021.
Consolidated Net Financial Debt
As of September 30, 2021, our net financial debt position (cash, cash equivalents plus financial investments and financial NDF & interest rate swaps minus loans) totaled P$223,416 million, decreasing P$16,627 million or equally -6.8% when compared to the consolidated net financial debt position as of December 31, 2020, which totaled P$239,683 million (restated in terms of the measuring unit as of September 30, 2021).
Investments in PP&E, intangible assets and rights of use assets
During 9M21, the Company invested P$66,519 million (+7.2% vs. 9M20). These investments represented 22.7% of consolidated revenues in 9M21, and were focused on:
New corporate identity and brands
In October, the company presented a new institutional visual identity and changed its commercial brands. This re-branding aims to better express and enhance the synergy of our services.
Personal now offers full connectivity to its customers with the best service experience, regardless of whether they are at home or elsewhere, thanks to fixed and mobile networks. Flow is currently a true meeting point for entertainment, where the contents of the most important streaming platforms on the market are also integrated. Finally, the company continues to offer digital solutions for the corporate and government segments through its brand Telecom.
In line with this evolution, the company renewed its institutional and investor relations websites, improving the contact and communication with investors.
Dividend distribution and reserve withdrawal
On August 11, 2021, the General Extraordinary Shareholders' Meeting of Telecom Argentina resolved:
Change of registered office
On August 11, 2021, the Board of Directors of the Company decided to change the Registered Office of Telecom Argentina to General Hornos 690, City of Buenos Aires, effective as of September 1, 2021.
Irrevocable contribution to controlled company
On September 22, 2021, Telecom Argentina made an irrevocable contribution in cash to its controlled company Micro Sistemas S.A.U., on account of the future subscription of shares of said company fora total amount of P$260,000,000.
Other Relevant Matters
Extension of preliminary injunction
On October 21, 2021, the Company was served with notice of the decision rendered by the Federal Court of Appeals on Administrative Litigation Matters 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 extend for a period of 6 (six) months the preliminary injunction previously granted in this proceedings, pursuant to section 5 of Law N° 26,854.
Acquisition of shares of AVC Continente Audiovisual
On October 27, 2021, Telecom Argentina completed the acquisition of 497,479 ordinary, book-entry shares with a nominal value of ARS 1 each and with the right to one (1) vote each, representing forty percent (40%) of the capital stock and votes of its subsidiary AVC Continente Audiovisual S.A. (the "Shares"), given that Miguel Angel De Biasi and Alejandra E. Becerra de De Biasi have exercised their option to sell such shares.
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, 2021, Telecom Argentina had 2,153,688,011 shares issued and outstanding.
For more information, please contact Investor Relations:
For information about Telecom Argentina's services, visit:
View original content:https://www.prnewswire.com/news-releases/telecom-argentina-sa-announces-consolidated-results-for-the-nine-month-period-9m21-and-third-quarter-of-fiscal-year-2021-3q21-301420578.html
SOURCE Telecom Argentina S.A.