America Movil registered a loss of MXN29.4 billion ($1.2 billion) in the first quarter after the Mexican peso fell 25% against the US dollar.
The Mexican market leader saw a profit of MXN19.6 billion over the same period in 2019, although it noted that the devaluation was the main factor behind the loss as overall trends in its business were good, with a year-on-year revenue increase of 1.8% to MXN250.1 billion. In particular, the company noted that it stood ready to tackle the Covid-19 (coronavirus) pandemic.
The operator registers its income in Mexican pesos, but generates a lot of its international debt in US dollars and Euros. Given that the peso has slumped since the start of the year – and that attempts to contain the outbreak of Covid-19 have escalated – America Movil’s financing expenses in Q1 were inflated, significantly impacting its bottom line.
The Mexican peso’s 25% slump was not the only devaluation of a regional currency that has affected America Movil, with the Brazilian real falling 29% and the Colombian peso 24% since the start of 2020. However, the group noted that its main operations were all faring well and it had a secure balance sheet.
In a statement on the pandemic’s projected impact on its operations, America Movil said: “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.”
The operator added that it in the face of the pandemic, it would adjust its “processes and commercial plans” in terms of its expenditure by prioritising cash flow and profitability.