Q4 2025 America Movil SAB de CV Earnings Call

Speaker #1: It must have

Speaker #2: Good morning. My name is Hilary, and I will be your conference operator today. At this time, I would like to welcome everyone to the America Movil fourth quarter 2025 conference call and webcast.

Operator: Good morning. My name is Hillary, and I will be your conference operator today. At this time, I would like to welcome everyone to the América Móvil Q4 2025 conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press * followed by the number 1 on your telephone keypad. If you would like to withdraw your question, please press * again. Thank you. I will now turn the call over to Ms. Daniela Lecuona, Head of Investor Relations. Please go ahead.

Speaker #2: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad.

Speaker #2: If you would like to withdraw your question, please press star again. Thank you. I will now turn the call over to Ms. Daniela Lecuona, Head of Investor

Speaker #2: Relations. Please go ahead. Thank you so

Daniela Lecuona Torras: Thank you so much. Good morning, everyone. Thank you for joining us today to discuss our Q4 results. We have today on the line Mr. Daniel Hajj, CEO, Mr. Oscar Von Hauske, COO, and Mr. Carlos García Moreno, CFO. Thank you for joining.

Speaker #3: Good morning, everyone. Thank you for joining us today to discuss our fourth-quarter results. We have today on the line Mr. Daniel Hash, CEO; Mr. Oscar von Hauske, COO; and Mr. Carlos García Moreno, CFO.

Speaker #3: Thank you for joining.

Speaker #4: Thank you, Daniela. Welcome, everybody, to America Movil fourth quarter 2025 report. Carlos is going to make us a summary of the results,

Daniel Hajj Aboumrad: Thank you, Daniela. Welcome, everybody, to América Móvil Q4 2025 Report. Carlos is going to make us a summary of the results, Carlos.

Speaker #4: Carlos. Thank you, Daniela.

Carlos García Moreno: Thank you, Daniel. Good morning, everyone. Well, the US government shutdown, in effect through the middle of the Q4, ended up raising uncertainty about the state of economic activity in the US. Not only did it have a direct impact on employment, but on account of the shutdown, several economic indicators generated that government agencies failed to be released at all. On 10 December, less than a month after the shutdown ended and with still incomplete economic data, we said we viewed the policy rate by 25 basis points in the absence of strong inflation pressures and the appearance of a sustaining economy.

Speaker #5: Good morning, everyone. Well, the year-going shutdown in effect to the middle of the fourth quarter ended up raising uncertainty about the state of economic activity in the US.

Speaker #5: Not only did it have a direct impact on employment, but on account of the shutdown, several economic indicators generated that employment agencies failed to be released at all.

Speaker #5: On December 10th, less than a month after the shutdown ended and with still incomplete economic data, the Fed reduced the policy rate by 25 basis points in the absence of strong inflation pressures.

Speaker #5: And the appearance of a softening economy. The dollar depreciated versus practically all the currencies in our region of operations in the quarter, except for the Brazilian real, the Argentinian peso, but it declined 2.3% versus the Mexican peso, 3.7% versus the Colombian peso, and 5.7% versus the Chilean peso.

Carlos García Moreno: The dollar depreciated versus practically all the currencies in our region of operations in the quarter, except for the Brazilian real, the Argentine peso, but it declined 2.3% versus the Mexican peso, 3.7% versus the Colombian peso, and 5.7% versus the Chilean peso, remaining practically flat versus the euro in the quarter. Well, we added 2.5 million wireless subscribers in the quarter, 2.8 million postpaid net gains, and 298,000 prepaid losses, and ended up December with 331 million wireless subscribers. Our postpaid base was up 8.4% year-over-year. Brazil led the way in terms of postpaid net adds with 644,000 subscribers, followed by Colombia with 276,000, Peru with 148,000, and Mexico with 135,000 postpaid subscribers. Now, in the prepaid segment, Mexico contributed 197,000 new subscribers, Argentina 226,000, and Colombia 224,000, whereas in Brazil and Chile, we had prepaid losses of 381,000 and 315,000 subscribers, respectively.

Speaker #5: Remaining practically flat versus the euro in the quarter. Well, we added 2.5 million wireless subscribers in the quarter, 2.8 million post-payment gains, and 298,000 prepaid losses.

Speaker #5: And ended up December with 331 million wireless subscribers. Our postpaid base was up 8.4% year on year. Brazil led the way in terms of post-payment rate, with 644,000 subscribers followed by Colombia with 276,000, Peru with 148,000, and Mexico with 135,000 postpaid subscribers.

Speaker #5: Now, in the prepaid segment, Mexico contributed 197,000 new subscribers. Argentina 226,000, and Colombia 224,000, whereas in Brazil and Chile, we had prepaid losses of 381,000 and 315,000 subscribers, respectively.

Speaker #5: In the six-lines segment, we connected 524,000 broadband accesses. 184,000 in Mexico, 113,000 in Brazil, 57,000 in Argentina, and 49,000 in Colombia. ATV posted a good performance, adding 77,000 units.

Carlos García Moreno: In the fixed-line segment, we collected 524,000 broadband accesses, 184,000 in Mexico, 113,000 in Brazil, 57,000 in Argentina, and 49,000 in Colombia. Pay TV posted a good performance, adding 77,000 units. We disconnected 79,000 voice lines, landlines. Our access lines exceeded 410 million at the end of December. 331 million were wireless subscribers, 79 million were fixed-line RGUs. The growth of our mobile postpaid base and our broadband accesses, which you can see in the chart, our most dynamic business lines, has been accelerated over the last quarters, with that of postpaid reaching an 8.4% year-on-year increase and broadband accesses expanding 5.6%. So these are some of our highest access growth rates in years. Q4 revenue rose 3.4% in Mexican peso terms from a year ago, to MXN 245 billion. They grew up 6.2% at constant exchange rates, with service revenue expanding 5.3%.

Speaker #5: With this connected, 79,000 baseline landlines. Our access lines exceeded 4.10 million at the end of December, 331 million were wireless subscribers, 79 million were fixed line IGUs.

Speaker #5: The growth of our mobile postpaid base and our broadband accesses, which you can see in the chart, were most dynamic business lines, has been accelerated over the last quarters.

Speaker #5: With that of postpaid, reaching an 8.4% year-on-year increase, and broadband accesses expanding 5.6%. So these are some of our highest access growth rates in years.

Speaker #5: Fourth quarter revenue rose 3.4% in Mexican peso terms from a year ago, to 245 billion Mexican pesos. They grew up 6.2% at constant exchange rates, with service revenue expanding 5.3%.

Speaker #5: The difference between the rate of growth in nominal terms versus that at constant exchange rates mainly reflects the 9.6% appreciation relative to the year earlier quarter of the Mexican peso versus the US dollar.

Carlos García Moreno: The difference between the rate of growth in nominal terms versus that at constant exchange rates mainly reflects the 9.6% appreciation relative to the year-on-year quarter of the Mexican peso versus the U.S. dollar. The apparent deceleration of service revenue growth, which extends to most revenue categories, stems from the incorporation of our Chilean operation from November 2024. EBITDA was up 4.2% in Mexican peso terms to MXN 95 billion, and it was up 6.9% at constant exchange rates from the year-on-year quarter. As was the case over several quarters in 2022-2024, EBITDA expanded more rapidly than revenue on greater operating leverage. Mobile service revenue growth remained strong at 6.2%, supported by postpaid revenue that was up 7.6%. Prepaid revenue growth maintained the pace in the prior quarter, which was the fastest in at least five quarters, and with exceptional developments here in Mexico.

Speaker #5: The uptrend deceleration of service revenue growth, which extends to most revenue categories, stems from the incorporation of our Chilean operation from November 2024. EBITDA was up 4.2% in Mexican peso terms to $95 billion pesos, and it was up 6.9% at constant exchange rates from the year-earlier quarter.

Speaker #5: As well as the decrease over several quarters in 2022, 2024, EBITDA expanded more rapidly than revenue on greater operating leverage. Mobile service revenue growth remains strong at 6.2%, supported by postpaid revenue that was up 7.6%.

Speaker #5: Prepaid revenue growth maintained the pace in the prior quarter, which was the fastest in at least five quarters. And with the exceptional developments here in Mexico.

Speaker #5: As you can see in the next chart, with Mexico accelerating from 2.38% to 3.8% on the back of a strong recovery of private consumption in the country.

Carlos García Moreno: As you can see in the next chart, with Mexico accelerating from 2.38% to 3.8% on the back of a strong recovery of private consumption in the country. Fixed-line service revenue was up 3.6% year-over-year, with fixed broadband revenue increasing 6.4%. The non-cellular operations were growing faster over the last couple of quarters, which you can see in the dotted green line. Mexico performed well, with broadband revenue growth rising from 2% to 4%. Our operating profit totaled MXN 49 billion. It was up 5.9% in nominal terms and 8.3% at constant exchange rates, while our comprehensive financing cost was roughly half those of the year-on-year quarter. This resulted in a net profit of MXN 19 billion in the quarter, which was four times larger than that of a year before. It was equivalent to 32 Mexican centavos per share or $35 per ADR.

Speaker #5: Six-line service revenue was up 3.6% year over year. With fixed broadband revenue increasing 6.4%, as the non-Chilean operations were growing faster over the last couple of quarters, which you can see in the dotted green line.

Speaker #5: Mexico performed well with broadband revenue growth rising from 2% to 4%. Our operating profit totaled 49 billion pesos, it was up 5.9% in nominal terms, and 8.3% at constant exchange rates.

Speaker #5: While our comprehensive financing costs were roughly half those of the year earlier quarter, this resulted in a net profit of 19 billion Mexican pesos in the quarter, which was four times larger than that of a year before.

Speaker #5: It was equivalent to 32 Mexican pesos cents per share or $35 cents per ADR. Our operating cash flow for the year 2025 came in at $213 billion pesos, after deducting from our EBITDA after leases $16 billion pesos increase in working capital and $82 billion pesos in interest payments and taxes.

Carlos García Moreno: Our operating cash flow for the year 2025 came in at MXN 213 billion. After deducting from our EBITDA after leases 16 billion pesos in increased working capital and 82 billion pesos in interest, payments, and taxes. After CapEx in the amount of MXN 131 billion, we were left with a free cash flow of MXN 82 billion. The latter figure represents a nearly 40% year-on-year increase in our free cash flow. Shareholder distributions reached MXN 45 billion, including MXN 12 billion in share buybacks, even as we reduced our net debt in cash flow terms by MXN 20 billion. At the end of the year, our net debt to EBITDA after leases ratio stood at 1.52 times and was on a downward trend. So with this, I will pass the floor back to Daniel Hajj, and we will begin the Q&A session. Thank you.

Speaker #5: After CapEx in the amount of $131 billion pesos, we were left with a free cash flow of $82 billion pesos. The latter figure represents a nearly 40% year-on-year increase in our free cash flow.

Speaker #5: Shareholder distributions reached $45 billion pesos. Including $12 billion pesos in share buybacks. Even as we reduced our net debt and cash flow terms by $20 billion pesos.

Speaker #5: At the end of the year, our net debt to EBITDA after leases ratio stood at 1.52 times and was on a downward trend. So with this, I will pass the floor back to Daniel Hajj and we will begin the Q&A session.

Speaker #5: Thank you.

Speaker #6: Thank you,

Oscar Von Hauske Solís: Thank you, Carlos. We can start with the Q&A session.

Speaker #6: Carlos. We can start with the Q&A

Speaker #6: session.

Speaker #7: Thank you

Operator: Thank you so much. We'll now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, please press star 1 again. Please pick up your handset when asking a question, and if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Marcelo Santos at JPMorgan. Marcelo, please go ahead.

Speaker #7: so much. We'll now begin the question and answer session. Please limit yourself to one question and one follow-up. If you'd like to ask a question, please press star one on your telephone keypad.

Speaker #7: To withdraw your question, please press star one again. Please pick up your handset when asking a question, and if you are muted locally, please remember to unmute your device.

Speaker #7: Please stand by while we compile the Q&A roster. Your first question comes from Marcelo Santos at JPMorgan. Marcelo, please go ahead.

Speaker #6: Carlos, Oscar, Daniela, thanks for taking my question. I wanted to inquire about the CapEx outlook for 2026 and coming years. Could you please provide us with an updated view?

Marcelo Santos: Carlos, Oscar or Daniela, thanks for taking my question. I wanted to inquire about the Capex outlook for 2026 and coming years. Could you please provide us with an updated view? Thank you.

Speaker #6: Thank

Speaker #6: you. Hi,

Daniel Hajj Aboumrad: Hi, Marcelo. What we have been doing is that, what we think, we are still not finalizing the Capex for this year, but our target is to be around 14% to 15% revenues. That is what we have been saying, and it's what we're going to do. That's maybe around $6.8 to $7 billion. That's what I mean, and that's what we're targeting to do. So we are going to be in those ranges. We still do not finalize all the countries, but we're looking to have around that number.

Speaker #8: Marcelo. What we have been doing is that what we think we are not still we are not finalizing the CapEx for this year, but our target is to be around 14 to 15 percent revenues that is what we have been saying and it's what we're going to do.

Speaker #8: That's maybe around 6.8 to 7 billion dollars that that's what I mean and that's what we're targeting to do. So we are going to be in those range we still doesn't does not finalize all the countries, but we're looking to have around that number.

Speaker #6: Okay. Thank you. As a follow-up, going forward, is it reasonable to assume a similar percentage of revenues for the coming years? I know you have not finalized, but just conceptually, does it make

Marcelo Santos: Okay. Thank you. As a follow-up, going forward, is it reasonable to assume a similar percentage of revenues for the coming years? I know you have not finalized, but just conceptually, does it make sense?

Speaker #6: sense? Yes.

Daniel Hajj Aboumrad: Yes. Yes. Yes. It's what we think. The next three years, let's say two, three years, yes, we can assume that we can have between 14% to 15%, MXN 7 billion, 6.8, 7.1, depending on spectrum, depending on a lot of things that are coming, but that's more or less what we're thinking.

Speaker #8: Yes. Yes. It's what we think.

Speaker #8: The next three years—okay, let's say two, three years—yes, we can assume that we can have between 14 to 15 percent. Seven billion, $6.8, $7.1 billion, depending on spectrum, depending on a lot of things that are coming, but that's more or less what we're thinking.

Speaker #6: Okay. Very clear. Thank you very much.

Marcelo Santos: Okay. Very clear. Thank you very much.

Speaker #8: Thank you.

Daniel Hajj Aboumrad: Thank you.

Speaker #7: Thank you for your question. Your next question comes from Rajero Araho. Please go ahead. Your line is now

Operator: Thank you for your question. Your next question comes from Rogerio Araujo. Please go ahead. Your line is now open.

Speaker #7: open. Hi, everyone.

[Equity Research Analyst] (J.P. Morgan): Hi, everyone. Thanks for the opportunity. I have one on there is a line called pre-tax non-operating expenses. It came at MXN 7.9 billion this quarter. This is well above the quarterly average of MXN 700 million in the past couple of years. So could you please remind what enters exactly in this line, what did impact it this quarter, and also what to expect going forward? Thank you so much.

Speaker #6: Thanks for the opportunity. I have one on there is a line called free tax, no operating expenses. It came at 7.9 billion Mexican pesos this quarter.

Speaker #6: This is well above the quarterly average of $700 million in the past couple of years. So, could you please remind us what exactly enters in this line, what impacted it this quarter, and also what to expect going forward?

Speaker #6: Thank you so

Speaker #6: much. Which line?

Daniel Hajj Aboumrad: Which line? Which line you said?

Speaker #5: In which line you said?

Speaker #6: Non-operating expenses. It's within financial results. It's called other free tax, no operating expenses.

[Equity Research Analyst] (J.P. Morgan): No, non-operating expenses. It's within financial results. It's called other pre-tax non-operating expenses.

Speaker #5: Okay. Perfect. The other financial expenses. We don't have it right now, but you can talk to Daniela. We can give you the detail on what was the different between the 4.9 to 7.8 this year.

Daniel Hajj Aboumrad: The other financial expenses. We don't have it right now, but if you can talk to Daniela, we can give you the detail on what was the difference between the 4.9 to 7.8 this year, this quarter.

Speaker #5: This quarter.

Speaker #6: Okay. No

Marcelo Santos: Okay. No worries. I will. Thank you. Can I follow up with another question as?

Speaker #6: worries. follow up with another question I will thank you. Can I as? There was no answer on

Speaker #8: Yes. Yes, please.

Daniel Hajj Aboumrad: Yes. Yes, please.

Marcelo Santos: There was no answer on this one. Yes? Okay. Thank you so much for this.

Speaker #6: this one. Yes? Okay. Thank you so much for this could you comment on Telefónica's announced sale of its operations in Chile, why American Movil and Intel ended up stepping out of the deal, and any early expectation of the expected competitive environment in the country with Millicon and French buying this asset?

Daniel Hajj Aboumrad: No, it isn't.

Marcelo Santos: Could you comment on Telefónica's announced sale of its operations in Chile, why América Móvil and Entel ended up stepping out of the deal, and any early expectation of the expected competitive environment in the country with Millicom and Entel buying this asset? If you could also comment on potential consolidation movements across Latin America as well, if there is anything active, and expectations for consolidation in the near future, anything you can share would be great. Thank you so much.

Speaker #6: If you could also comment on potential consolidation movements across Latin America as well, if there is anything active, if an expectations for consolidation in the near future, anything you can share would be great.

Speaker #6: Thank you so much.

Speaker #8: Well, you know that we were going to gather with Intel to do a bit for Telefónica. We review, and we decide not in American Movil, we decide no go.

Daniel Hajj Aboumrad: Well, you know that we were going together with Entel to do a bid for Telefónica. We review, and we decide not in América Móvil, we decide no go finalize and don't go together with Entel. So I think then I don't know if Entel decide to go alone or not. Then it was one, the other one that I heard that it was interested, and then Millicom. Finally, Millicom is the one who win. I think we still have a lot of things to do in our company inside Chile. We are doing okay. We're gaining revenues. We're gaining market share. We are doing all the investments that we need, all the synergies that we need. So we still think that we're going to be a very strong and good competitor in Chile. For us, it doesn't change a lot because we're changing as a competitor landscape.

Speaker #8: Finalize and don't go together with Intel. So that's, I think, then I don't know if Intel decide to go alone or not. Then it was one.

Speaker #8: The other one that I heard that it was interested, and then Millicon finally, Millicon is the one who win I think we still have a lot of things to do in our company inside Chile.

Speaker #8: We are doing okay. We're gaining revenues. We're gaining market share. We are doing all the investments that we need, all the synergies that we need.

Speaker #8: So we still think that we're going to be a very strong and good competitor in Chile. For us, doesn't change a lot because we're changing as a competitor landscape it will be very

Daniel Hajj Aboumrad: It will be very good to consolidate the market, but at the end of the day, Millicom is a new entrant, so it doesn't change anything having Telefónica and to change to Millicom. Let's see. I hope that in the future, we can consolidate the market in Chile, not only in the wireless, also in the fixed. And let's see. Chile, it will be important to be consolidated. For us, why we were out, it was going to be a little bit complex because regulation, the split of the company, high leverage of the company, a lot of things that was going to be difficult to decide between Entel and us, and then the value of Telefónica. So it was not an easy deal, and that's why we decided to quit and to stay where we are. But I think Chile is a difficult market.

Speaker #1: good Are we to consolidate the market ? But at the end of the day , Millicom is a new entrant . So it doesn't change anything .

Speaker #1: Having Telefónica and to change to Millicom. Let's see. I hope and change anything. Having Telefónica and to change to Millicom.

Speaker #1: see . Let's I hope that in the we future can consolidate the market in Chile , not only in the wireless , also in the peaks and let's see , Chile will be be we Why us .

Speaker #1: see . Let's I hope that in the we future can consolidate the market in Chile , not only in the wireless , also in the peaks and let's see , Chile will be be we Why important to consolidated for out .

Speaker #1: were going to be a little was bit complex because It regulation , the the split of company , high leverage of the company , a lot of things that was going to be difficult to decide between Intel and us .

Speaker #1: And then the value of Telefonica . So it was not an easy deal . And that's why we decided to quit and to , to to stay where But we are .

Daniel Hajj Aboumrad: Of course, it's a difficult market, but we are preparing, and we're making all the investments that we need to do to be competitive there. And as I said, hope that in the future, the market in Chile can consolidate.

Speaker #1: I think it's Chile is difficult market of a of course , it's a market , difficult but we are preparing and we're making all the investments and , and .

Speaker #1: That we need to do to , to , to be competitive . There . And as I said , hope that in the future the market in Chile can consolidate .

[Equity Research Analyst] (J.P. Morgan): Fair enough. Thank you so much. Have a great day, everyone.

Daniel Hajj Aboumrad: Thank you. Thank you.

Operator: Thank you for your question. Your next question comes from Gustavo Ferreira from UBS. Please go ahead. Your line is now open.

Speaker #2: Fair enough . Thank you so much . Have a great day everyone

Speaker #1: you .

Speaker #2: Thank you . .

Speaker #3: Thank you for Thank your question . Your next question comes from Gustavo Ferreira from UBS . Please go ahead . Your line is now open .

Leonardo Olmos: Everyone, thanks for taking the question. I'd like to hear some thoughts on capital allocation. So, given the strong growth in free cash flow, and we also saw a slowdown in share buybacks lately, so higher thinking about capital allocation going forward. Thank you.

Speaker #4: Everyone , thanks for taking the question . I'd like to hear some thoughts on capital . So given strong the growth in free cash flow , and we also saw a slowdown in share lately .

Speaker #4: Buybacks—so how are you thinking about capital allocation going forward? Thank you.

Daniel Hajj Aboumrad: Well, I think as Carlos said, Carlos said two things. We do very good growth in the free cash flow. We grow around 40% in the free cash flow. But he also said that the target that we have and always we're saying that the target on debt to EBITDA will be around 1.3 to 1.5 times debt to EBITDA. So we are a little bit above. So when you said we are reducing, I don't know if you are saying we are reducing in 2026 or we reduce from 2025, but it's important. We have a target on leverage, and we want to be on our target. So that's one thing. So the excess and the cash flow that we have, we're going to put it on reducing debt. Second, we have some M&A, as we said. We used to have Telefónica in Chile.

Speaker #5: I think Well as as as Carlos said Carlos .

Speaker #1: Said two things . We we do very good growth in and in the free cash flow . We grow around 40% in the free cash flow .

Speaker #1: But he also said that we the that we target have and always we're saying that the target on debt to EBITDA will be around 1.3 to 1.5 times that .

Speaker #1: So we are bit above a little so . Well , when you said we are reducing , I don't know if you are saying we are reducing in 2026 or we reduce from 2025 , but its important we have a target and and on on , on , leverage and we want to be on our target .

Speaker #1: So that's one thing . So the excess and the cash flow that we have , we are going to put it on reducing debt .

Speaker #1: Second , we have some M&A as we said , we use we used to have Telefonica . We are not there . But we still have desktop in .

Daniel Hajj Aboumrad: We are not there, but we still have Desktop in Brazil. We want to be financially healthy because we are not looking on M&A in other regions or material ones. We're not doing and looking on anything on that. But in our region where we operate, I think there's going to be consolidation in the market, and we want to be prepared to consolidate, let's say, small companies or small fiber companies. Or there will be a lot of things. The competitive landscape in Latin America is changing. We're having new competitors. Small ones are getting out. I hope no new ones are coming. So there's going to be a lot of things through the next year or two years, and we want to be prepared. We want to be healthy, and we want to be on target, okay? Because as we said, the target is 1.3 to 1.5.

Speaker #1: In in Brazil . And we want to be financially healthy because we are not looking on M&A in other in in in other regions or material ones .

Speaker #1: No , we're not doing and looking on anything on that . But in our region we where operate , I think there's going to be consolidation in the market and we want to be prepared to consolidate , say let's small companies or or fiber , small fiber companies or there will be a of things .

Speaker #1: The , the , the competitive in landscape Latin America is changing . We're having new competitors getting ones are . Small out . I hope no , our new ones coming .

Speaker #1: So there's going to be a lot of things through the next year two years . or And we want to be prepared . We want to be healthy and we want to be on target .

Daniel Hajj Aboumrad: We are a little bit slightly above on that. So what we want is to be on target and use the cash flow for that and also to return for the shareholders and will be on buybacks and dividends. So that's mainly what we're going to do on the free cash flow that we have, nothing else. And as I said, we don't have or we are not looking on going other countries outside of our region to do material things. No, because I read something this morning. So we are not thinking on doing nothing on that, only to be prepared to have opportunities. I think we're going to have some opportunities in the region that we have. That's what we have. So reducing debt and opportunities. Yes.

Speaker #1: Okay . Because as we said , the target is 1.3 to 1.5 . We are a little bit slightly above on that . So what we want is to be on target and use the cash flow for that .

Speaker #1: And also to return for the shareholders and will be on a buybacks and dividends . So that's mainly what we are going to do on the cash free flow that we have nothing else .

Speaker #1: And as I said , we don't have or we are not looking on going other countries , other other or outside of our region to do material things .

Speaker #1: No , because I read something this we are morning . not So thinking on doing nothing on that , only to be prepared to have opportunities .

Speaker #1: I think we're going to have some opportunities in the region that we have . That's what we have . So reducing that and opportunity , yes .

Carlos García Moreno Elizondo: Yeah. Only just to follow up on.

Daniel Hajj Aboumrad: Yeah. Thank you. And a quick follow-up.

Carlos García Moreno Elizondo: Sorry. Just to follow up on what Daniela has said, it's important to note that we, at the end of the quarter, were still a little bit marginally higher than the 1.5x net debt to EBITDA ratio that we have as our upper limit, even though we paid down debt by MXN 20 billion, a bit more than $1 billion throughout the year. So we did devote some important amount of cash to reduction of debt to remain within the limits that we have told the market, guided the market for the last five years. I mean, these are not new limits. Yes. Okay.

Speaker #5: Okay . I only only just just to very .

Speaker #4: Follow .

Speaker #5: Sorry . Just to follow up on what Daniel has said . You know , it's important to note that we at the end of the quarter were still at a bit little marginally higher than the 1.5 times net debt to EBITDA ratio that we have at our upper limit .

Speaker #5: Even though we paid down debt by $20 billion , Throughout than $1 billion . more the year . So we did devote some some amount of cash to reduction of it to remain within the limits that we have told the market gathering market over the last five years .

Leonardo Olmos: Yeah. Very clear. Just a quick follow-up, if I may. So considering what you just said and considering that the consolidation in Chile is now out of the table, is it fair to assume that any, let's say, cash flow that would be directed to M&A in Chile is now redirected towards deleveraging?

Speaker #5: I mean, these are not new limits. Okay.

Speaker #4: Yeah . Very clear . Just a quick I may . So considering what you just said and considering that the consolidation in Chile is now out of the table , is it fair to assume that any , let's say .

Speaker #4: Cash flow , that would be directed to M&A in Chile ? Is now redirected towards the leveraging .

Daniel Hajj Aboumrad: Towards what?

Carlos García Moreno Elizondo: Well, as we said.

Leonardo Olmos: Leveraging.

Carlos García Moreno Elizondo: This is leverage.

Speaker #6: Towards what ?

Daniel Hajj Aboumrad: Yes. If we don't have anything else in M&A, of course, we're going to go through leverage. If we have an opportunity, then we're going to do something there. We don't have something. We're looking for a lot of things, small things in Latin America where we are. If not, then we're going to do leverage and be in the lower range of our target to be prepared for opportunities. That's what we have.

Speaker #5: Well .

Speaker #1: said , As we this

Speaker #1: , as .

Speaker #4: said We .

Speaker #1: Yes for for if we don't have anything else in M&A , of course we're going to do through leverage and and if we have an opportunity then we're going to do something there .

Speaker #1: So that's we don't have something . We are looking for a lot of things . A small things in Latin America where we are and if not , then we're going to do leverage and be in the lower range of our target to be prepared for opportunities .

Leonardo Olmos: All right. Very clear. Thank you.

Speaker #1: That's what we have .

Operator: Thank you for your question. A reminder that if you would like to ask a question, please press star 1 on your telephone keypad to withdraw your question. Please press star 1 again. Please pick up your handset when asking a question. And if you're muted locally, please remember to unmute your device. Our next question comes from Cesar Medina at Morgan Stanley. Cesar, your line is now open.

Speaker #4: All right. Very clear. Thank you.

Speaker #3: Thank you for your question. A reminder that if you would like to ask a question, please press star one on your telephone keypad.

Speaker #3: To withdraw your question , please star one again . Please pick press up your handset when asking a question . And if you're muted locally , please remember to unmute your device .

Speaker #3: Our next question comes from Cesar Medina at Morgan Stanley. Cesar, your line is now open.

Carlos García Moreno Elizondo: Hi. Thanks for taking my question. How should we think of the impact of FX on your overall results? I'm asking because the Mexican peso strength is very visible, and you're exposed to different currencies, and your CapEx and debt also has sort of hard currency exposures in net. How should we think of the impact on the cash flow?

Speaker #7: Hi . Thanks for taking my question . How should we think of the impact of FX on your overall results ? And I'm asking because , you know , the Mexican peso strength is very visible and you're exposed to different currencies and your CapEx and debt also has sort of a high currency exposures in net .

Daniel Hajj Aboumrad: Sir, the old answer is all. Cesar.

Carlos García Moreno Elizondo: Good afternoon.

Daniel Hajj Aboumrad: I mean, I think, as you say, this is a company that has many operating exchange rates in our revenue. And then we also have very different exchange rates on our debt. So what we were talking about a little while ago in terms of the leverage ratio, that's something that tends to move both because the EBITDA flows move in terms of, say, if you measure them in dollars or pesos, whatever, but also the net debt itself also moves a lot in terms of dollars or pesos precisely because we have all of these currencies. So yes, it becomes a bit complex to manage these issues. Now, and that's why we always highlight here in the report how we are doing at constant exchange rates because we need to take out all of the noise that is created by the exchange rates.

Speaker #7: How should we think of the impact on the cash flow .

Speaker #8: To . I think . As you say , you know , these a company that has many operating exchange rates in our revenue .

Speaker #8: And then we also have very different exchange rates on our debt . So talking about a little while ago , in terms of the leverage ratio , that's something that tends to move both because the EBITDA flows move in terms of sales .

Speaker #8: If you measure them in dollars or whatever . And but also the the net debt itself also moves a lot in terms of dollars or pesos , because we have all of these currencies .

Speaker #8: So yes , it becomes a bit complex to , to to manage these , these issues . Now . And that's , why we always highlight here in the report how we are doing at constant exchange rates .

Daniel Hajj Aboumrad: But yeah, I think net-net, I think that we have a clear idea of how we manage the company. I think in terms of financial exposure, we manage our exposure to currencies. So we really have exposure only to 3 currencies for the most part, 3 or 4 currencies. And in terms of the operating cash flows, well, that obviously has to do with there's nothing we do in that respect. There's nothing that we do in terms of hedging cash flows. That's something that just comes up as it is. And just to put to yes.

Speaker #8: Because we need to take out all of the noise that is the created by exchange rates . But yeah , I think net net , I think that we a clear have idea of how we manage the company .

Speaker #8: I think in terms of financial exposure , we manage our exposure to currencies . So we really have three currencies exposure only for the most for part currencies .

Speaker #8: And in terms of the of the operating cash flows , well , that's obviously has to do with there's nothing we do in that respect .

Speaker #8: There's nothing that we do in terms of hedging cash flows . That's something that just comes capacities . Yeah .

Carlos García Moreno Elizondo: I'm sorry. And this is why for us, it's always going back to what we were saying, the prior question. We need to balance, on the one hand, the desire to do distributions, share buybacks, and also the need to adjust our leverage ratio by paying down some debt. And again, this is something that we cannot predict exactly from the beginning because it has to do a lot with where the exchange rates are. And you can see them as noise at some point, but also they are reality. They are there. And if we are going to be measuring our net debt to EBITDA, which we measure with the rating agency, which we measure with you every time that we publish the report, well, we need to be consistent with what we are doing. So balancing share buybacks, balancing CapEx, balancing the net leverage we have. That's.

Speaker #1: And just to .

Speaker #8: Just I'm sorry . And this is why , you know , for for us it's always going back to what we were saying .

Speaker #8: The question is, we need to balance, on the one hand, the desire to do distributions to survivors, and also the need to adjust our leverage ratio by paying down some debt.

Speaker #8: And again , this is something that we cannot predict exactly from the beginning because it has to do a lot with the exchange , rates are and you know , you can see them as noise at some point .

Speaker #8: But also the are reality . They are there and we are going to be measuring our net debt to EBITDA , which we measure with the rating agencies that we measure with you .

Speaker #8: Every time that we that we publish the report , well , we need to be consistent with what we are doing . So balancing share buybacks , balancing CapEx , balancing the the the net leverage we have , that's that's .

Daniel Hajj Aboumrad: Yeah. Exactly. What Carlos is saying is a balance, a balance between the capital allocation. It will be reducing our leverage, returning to the shareholders via buybacks or dividends, and be healthy to be prepared if there's something in our regions that will come as an opportunity. So these three things, we're going to balance through all this year to be okay. So that's mainly what we're talking on the capital allocation.

Speaker #1: Exactly what what Carlos is saying is a balance , a balance between the capital allocation . It will be reducing our leverage , returning to the shareholders via vivax or dividends , and be healthy to be prepared if there is something in in our regions that will come as an opportunity .

Speaker #1: So these three things we're going to balance through all these years to , to , to , to be okay . So that's mainly what , what what we're talking on the capital allocation .

Carlos García Moreno Elizondo: Thank you.

Operator: Thank you for your question. Your next question comes from Alejandro Azar from GBM. Your line is now open.

Speaker #7: Thank you .

Speaker #3: you for Thank your question . Your next question comes from Alejandro Ayesa from GBM . Your line is now open .

[Equity Research Analyst] (GBM): Hi. Good morning, everyone, and thank you for taking my question. This is just on the consolidation that we are seeing all over Latin America, Colombia, Chile, Brazil. There's even rumors on six players in Mexico being interested in AT&T. So my question is, how do you see the regulatory environment for AMX? It seems that we are moving to a tighter market with 2, 3 players. Do you think we should see in 5 years, 10 years, less regulatory or less asymmetric regulation where AMX currently has one? Thank you.

Speaker #9: Hi . morning Good everyone and thank you for taking my question . This is just on the consolidation that we are seeing all over all over Latin America , Colombia , Chile , Brazil .

Speaker #9: There's even rumors on on fixed players in Mexico being interested in in in AT&T . So so my question is how do you see the regulatory environment for Am as seems it that we moving are to a tighter market with 2 or 3 players , do you think we should see in five years , ten years less regulatory or less asymmetric regulation where I am currently has one ?

Daniel Hajj Aboumrad: Well, the only place where we have asymmetric regulation is in Mexico. All the other places, we don't have any, let's say, asymmetric regulation. In all the other 20 countries that we operate, we don't have any asymmetric regulation. It's only in Mexico. Your question is how I see in 3, 4 years. It's exactly what we're saying. I see more consolidation in all these markets, and I think it's going to be good for the businesses to consolidate more. I think not only in mobile, but in fixed, maybe 5 years or 6 years ago, there's a lot of companies putting fiber, giving very in a lot of countries, fiber plus very aggressive promotions. I'm not seeing anymore these companies putting fiber. There are still companies that they are doing, more competitors, but no new ones doing that.

Speaker #9: Thank you .

Speaker #8: Well .

Speaker #1: The only place where we have a symmetric regulation is in Mexico . the other All places is we don't have any any let's say asymmetric regulation in all the other 20 countries that we don't have operate .

Speaker #1: We any regulation . It's only in asymmetric Mexico what your question is how I see in 3 or 4 years , is exactly what we're saying .

Speaker #1: I see more consolidation in all these markets and , and I think it's going good business to for the consolidate more or I think like not not only in mobile but in fixed , maybe five years or six years ago , there's a lot of companies putting fiber , giving , burying a lot of countries fiber , plus very aggressive promotions .

Speaker #1: I , I'm not seeing any more these companies putting fiber . There is still companies that they are doing more competitors . But no new ones doing that .

Daniel Hajj Aboumrad: So they are seeing that the business, it's not as easy as it looks. So we are not seeing new competitors, let's say, in terms of fiber. Then the other ones, maybe they are going to consolidate between them or they are going to consolidate with other ones. So there's going to be a new landscape in all Latin America, and I think that's going to be good for us and for all the people who are staying here, that's who's staying in Latin America. In Mexico, what you say, rumors about AT&T, well, they are rumors. The only thing that I can say is that AT&T is a very strong competitor, and if they sell to other ones, they are going to be also strong competitors. So nothing to say.

Speaker #1: So they are seeing that the business is not as easy as it looks . And so we don't we are seeing new not competitors .

Speaker #1: Let's say , in fiber , terms of then the other are going maybe they ones , to consolidate between them or they are going to consolidate with other ones .

Speaker #1: So there's going to be a new landscape in all Latin America . And I think that's going to be good for us and for all the people who staying here that we're are staying .

Speaker #1: in America , Latin in Mexico . What Know you rumors say about AT&T ? Well , they are rumors as the the only I can thing that that say is very AT&T is a competitor strong .

Daniel Hajj Aboumrad: So what we need is to do our job to have the best 5G network, the best quality, customer care, everything, systems, IT, AI, and to do everything that we are doing, all the investments that we need to do to compete against or still AT&T here or if they sell to the other one. So that's exactly what I said in Chile. In Chile, we used to have a Telefónica as a competitor. Today, it's not going to be Telefónica. It's a pity that we cannot consolidate this market because this market will be good to consolidate, but it's going to stay more or less the same with four competitors in mobile and the same in fixed. So let's see and see if in the future, we can consolidate that market. So that's what, yes.

Speaker #1: they if And to other sell they are also ones , going to be strong competitors . So to say . So nothing what we to need is do our job to to have the best 5G networks .

Speaker #1: The the best quality customer care , everything systems . It , AI and to do everything that we are investments doing all the that we need to do to to compete against still here AT&T , or if they or sell to the other one .

Speaker #1: So we that's that's what exactly what I said in Chile . No , in Chile we used a Telefonica , a competitor today is not going to be Telefonica .

Speaker #1: It's a pity that we cannot consolidate this market because market this will be good to consolidate . But it's going to stay less the same with for competitors in and the same in mobile fixed .

Speaker #1: So let's see . And see if in the future we can consolidate that market . So that's what . Yes .

Carlos García Moreno Elizondo: Sure. Alejandro, but as Daniela is saying, I mean, I do believe that you can see that there's very much of a wave of consolidation happening in the world, usually in Europe. There used to be many more players in each one of the countries. There's been a reduction, and this basically has to do with the dynamics of the industry. This industry requires scale to get the returns for the investment. And when you have a very fragmented market, there's no returns and no investment. And typically, players end up probably not in the best of shapes. So I think that this is an issue that is more and more taken into account by regulators and generally governments worldwide.

Speaker #8: But but as I said I mean I do believe that you can see that there is very much of a wave of consolidation happening in the world .

Speaker #8: You look at Europe , there used to be many more players . In each one of the countries . There's been a reduction and this basically has to do with the dynamics of the industry .

Speaker #8: This industry requires scale to get the returns for the and when you have a very fragmented market , there is no returns and no investment .

Speaker #8: And typically, players are probably not in the best of shapes. So I think that this is an issue that is more and more taken into account by the general governments worldwide.

[Equity Research Analyst] (GBM): Okay. Thank you. Thank you both for the answers.

Daniel Hajj Aboumrad: Thank you. Thank you, Alejandro.

Operator: Thank you for your question. Your next question comes from Marcelo Santos at J.P. Morgan. Your line is now open.

Speaker #9: Okay . Thank Thank you , thank you both for the answers .

Speaker #8: Thank you .

Speaker #3: Thank you for your question . Your next question comes from Marcelo Santos at JP Morgan . Your line is now open .

Marcelo Santos: Hi. Thank you very much for the follow-up here. I just wanted to use this opportunity to ask about the Brazilian number portability. You mentioned in the release that Brazil is seeing the same customer preference as evidenced by positive number portability trends, which indeed has been very strong and stronger than usual. My question is, is this portability that is being stronger mostly explained by NuCel, which you have the MVNO, or is it mostly explained by your Claro operation in Brazil? Just wanted to see what's driving this strong portability, which we also see using the data. Thank you.

Speaker #10: Hi . Thank you very much for the follow up here . I just to use this opportunity to ask about the Brazilian number portability you mentioned in the release that Brazil is seeing sustained customer preference , as evidenced by positive number portability trends , which indeed has been very strong and stronger than usual .

Speaker #10: My question is , is this portability that is being stronger mostly explained by New Cell , which you have the MVNO or is it mostly explained by your like plateau Just wanted Brazil ?

Daniel Hajj Aboumrad: Yeah. I think they are both okay. There's no doubt that NuCel is helping us in number portability, and we're doing very good with them. But in the other side, we are doing strong, and we have been growing more on revenues than our competitors in Brazil. And I think that's good, number portability plus new subscribers. We are doing okay. And the other thing that I'm seeing is that we are getting also very good ARPU subscribers. So we are not only in the prepaid or in the low end. We're getting also good high-end subscribers. So it's been good. That's what I can say. There's no doubt that NuCel is helping us, but it's not only NuCel. There's all the things that we have on the back of that that is doing that we have been doing that.

Speaker #10: to see operation in driving what's this strong portability , we also see using the data . Thank you . Yeah .

Speaker #1: I think they are both okay . I there's no doubt that new cell is helping us in number portability and and we're doing very good with them .

Speaker #1: But on the other side we are doing strong and we been have growing more on revenues than our competitors in Brazil . And I think that's that's good number portability plus new subscribers .

Speaker #1: We are doing okay . And the other thing that I'm seeing is that we are getting also very good . Arpus . So we are not only in the in the prepaid or low end .

Speaker #1: We are getting also good . High , high end subscribers . So it's been good . That's that's what I can say . There is no doubt that nuzzle is helping us , but it's not only nuzzle , there's all the things that we have on the back of , of of that that is doing that .

Daniel Hajj Aboumrad: We have been always gaining number portability through the year, and in the fourth quarter, it gets strong because NuCel. So it's been good, and we are a little bit more good, a little bit more better than what we used to be. This is what I can tell you.

Speaker #1: We have been doing that . We have been always gaining a number portability through the year . And in the fourth quarter a .

Speaker #1: strong Get because new cell . So it's being and we good are a little bit more good , a little bit more better than what we used to be .

[Equity Research Analyst] (GBM): So just to clarify, the jump we saw in the fourth quarter, that could be attributed to NuCel. You were having very good portability across the year. That's clear, but the change we saw in more recent months, that would be NuCel.

Speaker #1: This is what I can tell you .

Speaker #10: So just to clarify , the jump we saw in the fourth quarter , that could be attributed to the you were having very good portability across the year .

Daniel Hajj Aboumrad: Part, not all, but part could be yes, part could be NuCel, but not all is NuCel. Also, it's Q4. Q4, a lot of people is changing. There's new handsets that people want to change for handsets, so they want to do promotions. So there's a lot of things.

Speaker #10: That's that's claro . But the change we saw in more recent months , that would be new cell part .

Speaker #1: Not all but part would be yes . Part could be new cell . But not all could is new cell also is fourth quarter .

Speaker #1: A lot of fourth quarter, people are changing as there are new handsets that people want to change for handsets. So they want to do promotions.

[Equity Research Analyst] (GBM): Okay. Clear. Thank you very much.

Daniel Hajj Aboumrad: Thank you.

Operator: Thank you for your question. Your next question comes from Emilio Fuentes at GBM. Your line is now open.

Speaker #1: So, there's a lot of things.

Speaker #10: Okay . Clear . Thank you very much . Thank you .

Speaker #3: Thank you for your question . Your next question comes from Emilio Fuentes at GBM . Your line is now open .

Emilio Fuentes: Hi. Thank you for taking my question. I'm wondering, given the stellar metadata you have had brought by Mexico the recent quarters, how sustainable do you see this performance going forward, specifically as we reach higher penetration for this service in the market? Thank you.

Speaker #11: Hi . Thank you for taking my question . I'm wondering , given the stellar that you have had in broadband in Mexico , the recent quarters , how sustainable do you see this performance going forward , specifically as we reach a higher penetration for this service in the market ?

Speaker #11: Thank you .

Daniela Lecuona: Yes. Yes. We see a good trend on the metadata within the last four quarters in fixed broadband in Mexico. We have very good promotions in the market that the customers have received very well, the bundles with streaming, increasing the speed. So we see the same trend through the year, through this year, right? So we see the bundles are working pretty, pretty good with the streaming video platforms, and the speeds that we've been delivering to the market are really good. We have 92% of the customers already with fiber, so we believe that we will retain the customers. We believe the trend will be more or less the same.

Speaker #8: . Yes Yeah . We see a good trend on the that within the last four quarters in fixed broadband in Mexico . We have a very good promotions in the market that the customers have received very well .

Speaker #8: The bundles with with the streaming speed . increasing the So we see the same trend through the year through this year . Right .

Speaker #8: So we see the bundles are working pretty, pretty good with the streaming video platforms. The speed that we've been delivering to market and the delivering to market are really good.

Speaker #8: We have 92% of the customers already with fiber , so we believe that we will retain the customers . We we believe the trend will be less the same more or .

Emilio Fuentes: Yeah. Thank you.

Speaker #1: Yeah . Thank you . Oscar .

Operator: Okay. There are no further questions at this time. I will now turn the call back to Mr. Daniel Hajj for closing remarks.

Speaker #3: There are no further questions at this time . I will turn the now call back to Daniel Mr. Hash for closing remarks .

Daniel Hajj: Well, to thank everyone for being in the call, and thank you, Carlos, Daniela, Oscar. Thank you very much.

Daniela Lecuona: Thank you all. Bye-bye.

Speaker #1: thank To everyone for being on the call . And thank you , Carlos . Daniela , Oscar , thank you very much .

Speaker #8: Thank you all .