America Movil swung to a loss in Q1 on the devaluation of the Mexican peso against the US dollar, though the company emphasised operational trends were strong and it was in a solid position to deal with any Covid-19 (coronavirus) related issues.
The operator group booked a net loss of MXN29.4 billion ($1.2 billion) compared with a profit of MXN19.6 billion in the same quarter of 2019. Revenue increased 1.8 per cent year-on-year to MXN250.1 billion.
Although the company reports income in Mexican pesos, much of its international debt is raised in US dollars and euros, leading to increased financing costs for the period and contributing to a large drop in its bottom line.
Since the start of 2020, and during measures introduced to contain the spread of Covid-19, the company noted the Mexican peso had dropped 25 per cent against the US dollar, with the Brazilian real down 29 per cent and Colombian peso 24 per cent lower.
It, however, pointed to a strong balance sheet and positive performances in all its “main operations”.
Regarding its future outlook as public health measures surrounding the pandemic continue it added: “There is no clarity as to its duration and magnitude overall or its impact in the countries where we operate. The financial resilience of our company and its vast and critical infrastructure after a long period of large investment are important assets in these times.”
It noted the company had adapted its “processes and commercial plans” to accommodate changing need related to the crisis. As part of this it aims to maintain cash flow and overall profitability by adjusting its working capital, operating and capital expenditure as required.
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