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UPDATE 3-Forex woes push Slim's America Movil to first loss in 14 years
October 20, 2015 / 12:14 AM / 2 years ago

UPDATE 3-Forex woes push Slim's America Movil to first loss in 14 years

(Adds forex and Slim family background, context on 2001 loss)

By Christine Murray

MEXICO CITY, Oct 19 (Reuters) - Mexican billionaire Carlos Slim’s America Movil on Monday reported its first quarterly loss in almost 14 years as a sharp depreciation in Latin American currencies battered the region’s biggest pay TV and wireless company.

Grappling with tougher regulation at home and recession in Brazil, America Movil posted a surprise 2.884 billion peso ($170 million) loss in the third quarter. Analysts had forecast a 9.493 billion peso profit in a Reuters poll.

Controlled by the family of Slim, the richest man in Latin America, the company last posted a loss in the fourth quarter of 2001, the year it began publishing its financial results.

At the time, America Movil was Slim’s mobile unit, but it swallowed the rest of his phone operations and became the flagship of his global telecoms empire.

Although America Movil’s revenue rose, its foreign exchange loss widened to 45 billion pesos in the July-September period from 9 billion pesos a year earlier.

In Mexico, its biggest market, America Movil has around 70 percent of the mobile business and more than 60 percent of fixed-line connections. A large portion of the company’s revenue is in pesos and reals, but many of its expenses are in dollars.

In a statement, the company said the Mexican peso fell 7 percent on average against the dollar from the second quarter, while the real dropped 15 percent in Brazil, its second biggest market.

In its third largest market, Colombia, the local peso declined 18 percent, it added.

America Movil also had to contend with sales costs rising by more than 8 billion pesos during the quarter.

In Mexico its profit margin has fallen every quarter since a sweeping telecoms reform was completed last year that brought tougher regulation. Despite cost cuts, the company’s service revenues fell 5.7 percent, while average revenue per user (ARPU) fell 8.6 percent.

Slim said last year America Movil would sell a chunk of its Mexico subscriptions and assets to avoid the new anti-trust rules.

But it has put that plan on hold since the entry of former ally AT&T Inc, which purchased Mexico’s No. 3 and No. 4 wireless carriers.

The company said competition has become more intense and effective in Mexico, arguing that it should not be subject to more stringent regulations.

$1 = 16.933 pesos at end-September Reporting by Christine Murray; Editing by Richard Chang, Bernard Orr

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