BUENOS AIRES, Argentina,
Aug. 6, 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 1H21 include the effects of the adoption of
inflationary accounting in accordance with IAS
29. Finally, comments related to variations of results
of 1H21 and vs. 1H20 mentioned in this press release correspond to
"figures restated by inflation" or "constant". Moreover, Table 3
contemplates information broken down by segment for periods ended
as of June 30 of 2021 and 2020 as
analyzed by the Executive Committee and the CEO, who receive
periodically the financial information of Telecom and its
subsidiaries (in historical values). For further details, please
refer to the titles of the financial tables beginning from page
11.
- For comparative purposes, it is important to highlight that
the results restated by inflation corresponding to June 2020 contain the effect
of the year over year inflation as of
June 2021, which amounted to
50.2%.
- Consolidated Revenues amounted to P$180,018
million in 1H21, from which Service Revenues totaled P$167,085
million (-10.8% in constant currency vs. 1H20), in a context where
inflation still remains high. Service revenues for 2Q21 totaled
P$81,523 million (-12.3% in constant currency vs 2Q20)
- Mobile clients in Argentina
reached 19.3 million in 1H21 (+460 thousand vs. 1Q21), cable TV
subscribers totaled approximately 3.5 million (+20 thousand vs.
1Q21), while broadband accesses amounted to almost 4.2 million (+62
thousand vs. 1Q21).
- Operating Income before Depreciation and Amortization
amounted to P$61,254 million in 1H21 (-14.8% vs. 1H20). Operating
Income totaled P$5,305 million (-75.6% vs. 1H20).
- The Company registered a Net Loss of P$1,672 million in
1H21, mainly due to tax expenses of P$25,682 million, partially
offset by the company's operating profit and positive net financial
results of P$18,590 million
- Investments (including rights of use assets) reached
P$41,705 million in 1H21, equivalent to 23.2% of Consolidated
Revenues.
- Net Financial Debt amounted to P$189,342 million in 1H21,
(-13.7% in constant currency vs. 4Q20)
**Unaudited non financial data
|
IAS
29
|
IAS
29
|
|
|
(in
million P$ adjusted by inflation, except where
noted)**
|
As of June
30,
|
As of June
30,
|
Δ
$
|
Δ
%
|
|
2021
|
2020
|
|
|
Consolidated
Revenues
|
180,018
|
196,999
|
(16,981)
|
(8.6%)
|
Operating Income
before D&A
|
61,254
|
71,873
|
(10,619)
|
(14.8%)
|
Operating
Income
|
5,305
|
21,765
|
(16,460)
|
(75.6%)
|
Net income before
income tax expense
|
24,010
|
7,888
|
16,122
|
204.4%
|
Net (loss) income
attributable to Controlling Company
|
(2,005)
|
2,619
|
(4,624)
|
(176.6%)
|
Shareholders' equity
attributable to Controlling Company
|
475,664
|
521,843
|
(46,179)
|
(8.8%)
|
Net Financial
Debt
|
(189,342)
|
(196,810)
|
7,468
|
(3.8%)
|
Investments in
PP&E, intangible assets & rights of use assets *
|
41,705
|
34,195
|
7,510
|
22.0%
|
|
|
|
|
|
Fixed lines in
service (in thousand lines) ***
|
2,625
|
2,998
|
(373)
|
(12.4%)
|
Mobile customers (in
thousand)
|
21,439
|
21,049
|
390
|
1.9%
|
Personal (Argentina)
|
19,256
|
18,804
|
451
|
2.4%
|
Núcleo (Paraguay) -including Wimax customers-
|
2,184
|
2,245
|
(61)
|
(2.7%)
|
Broadband accesses in
Argentina (in thousand)
|
4,234
|
4,107
|
126
|
3.1%
|
Pay TV Suscribers (in
thousand)
|
3,545
|
3,500
|
45
|
1.3%
|
|
|
|
|
|
Average Billing per
user (ARBU) Fixed Telephony / voice (in P$ - Restated by
inflation)
|
656.6
|
780.1
|
(123.5)
|
(15.8%)
|
Average Revenue per
user (ARPU) Mobile Services - Personal (in P$ - Restated by
inflation)
|
525.2
|
564.0
|
(38.8)
|
(6.9%)
|
Average Revenue per
user (ARPU) Broadband (in P$ - Restated by inflation)
|
1,442.3
|
1,743.7
|
(301.4)
|
(17.3%)
|
Average Revenue per
user (ARPU) Cable TV (in P$ - Restated by inflation)
|
1,586.9
|
1,885.5
|
(298.6)
|
(15.8%)
|
* (in constant measuring unit.)
**(Figures may not
sum up due to rounding)
*** (does not include IP
telephony lines, which as of June 30,
2021 amounted to approximately 560 thousand)
Telecom Argentina S.A. ('Telecom Argentina') - (NYSE: TEO; BASE:
TECO2), announced today a net loss of P$1,672 million for the
period ended June 30, 2021. The net
loss attributable to the controlling company was P$2,005
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 June 30,
2021.
The following table shows the evolution of the consumer price
index (National CPI) for the last two fiscal years and as of
June 30, 2020 and 2021 according to
the official statistics (INDEC), which were used to restate the
figures in constant currency:
|
As of
December
31, 2019
|
As of
December
31, 2020
|
As of
June 30,
2020
|
As of
June 30,
2021
|
Price Index
Variation
|
|
|
|
|
Annual
|
53.8%
|
36.1%
|
42.8%
|
50.2%
|
3 month
cumulative
|
n/a
|
n/a
|
5.4%
|
11.0%
|
6 month
cumulative
|
n/a
|
n/a
|
13.6%
|
25.3%
|
During 1H21, Consolidated Revenues amounted to P$180,018
million, from which Service Revenues totaled P$167,085
million.
Consolidated Operating Revenues
Mobile Services
As of June 30, 2021, mobile
clients amounted to 21.4 million in Argentina and Paraguay. In 1H21, mobile services revenues
represented P$67,633 million (-P$6,615 million vs. 1H20).
Mobile Services in Argentina
As of June 30, 2021, Personal
subscribers reached more than 19.3 million in Argentina (+460 thousand vs. 1Q21). Postpaid
clients represented 42% of our subscriber base.
In 1H21, mobile service revenues in Argentina amounted to P$67,633 million (-8.9%
vs 1H20). Mobile internet revenues reached 73% of mobile service
revenues. The average monthly revenue per user ('ARPU' – restated
in constant currency as of June 30,
2021) amounted to P$525.2 during 1H21 (-6.9% vs. 1H20). The
effect generated by the inflation adjustment as of June 30, 2021 (included in the ARPU)
amounted to P$43.9 and P$207.3, for the 1H21 and 1H20,
respectively. Mobile churn was 0.7% (vs. 2.1% in 1H20).
Commercial Initiatives
During the second quarter 2021, the Company
launched a new WiFi Pass service through
our Personal and Fibertel brands, a connectivity proposal
which allows Personal customers who also have our Fibertel
service to share internet gigas free of charge through their
phones to any other device without consuming data
from their original plan.
Personal in Paraguay
('Núcleo')
As of June 30, 2021, Núcleo's
subscriber base reached almost 2.2 million clients. Prepaid and
postpaid customers represented 83% and 17%, respectively.
Núcleo generated mobile service revenues equivalent to P$7,788
million during 1H21 (-17.9% vs. 1H20), 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$35,665 million in 1H21
(-P$3,923 million vs. 1H20). Cable TV subscribers totaled more than
3.5 million (+20.2 thousand vs.1Q21). Moreover, the monthly Cable
TV ARPU (restated in constant currency as of June 30, 2021) reached P$1,586.9 during 1H21 (vs
P$1,885.5 in 1H20). The effect generated by the restatement in
terms of the measuring unit as of June 30,
2021 included in the ARPU amounts to P$93.1 and P$690.5, for
the 1H21 and 1H20, respectively. Additionally, the average monthly
churn during 1H21 and 1H20 was 1.0%.
During the second quarter, the Company continued its plan to
consolidate its entertainment platform, developing new content
and providing customers a top tier cross-platform
experience.
The Company continued to consolidate Esports as a trend to
develop the local consumption of entertainment. In April, the
Torneo Apertura of the Liga Master and the Unity League Flow was
broadcasted live.
Fixed Telephony and Data Services
Revenues generated by fixed telephony and data reached P$25,884
million in 1H21 (-P$4,296 million vs. 1H20).
As a result, the average monthly revenue billed per user ('ARBU'
- restated in constant currency as of June
30, 2021) of fixed telephony reached P$656.6 (vs. P$780.1 in
1H20). The effect generated by the restatement in terms of the
measuring unit as of June 30, 2021,
included in the ARBU amounted to P$57.4 and P$286.5 for the 1HQ21
and 1H20, respectively.
Regarding the corporate segment, Telecom FiberCorp, continued to
develop different initiatives to support companies in their
productivity and growth.
In June, a new edition of "Telecom SummIT 2021" was launched to
tap the corporate market helping companies to evaluate new ways of
working.
Internet Services
Internet services revenues totaled P$37,535 million during 1H21
(-P$5,110 million vs. 1H20). As of June 30,
2021, total broadband accesses reached approximately 4.2
million (+2 thousand vs. 1Q21).
Additionally, broadband ARPU (restated in constant currency as
of June 30, 2021) amounted to
P$1,442.3 per month in 1H21 (vs. P$1,743.7 in 1H20). The effect
generated by the restatement in terms of the measuring unit as of
June 30, 2021, included in the ARPU
amounted to approximately P$123.9 and P$638.4, for the 1H21
and 1H20, respectively.
The average monthly churn rate for the 2Q21 was 1.5% (vs. 1.3%
in 1H20). It is worth noting that as of 1H21 76.0% of our total
customer base had a broadband service of 20Mb or higher
(increasing from 67.5% as of 1H20).
Revenues from equipment sales
Equipment revenues amounted to P$12,933 million (+P$3,170
million vs. 1H20). Said increase was mainly due to an increase in
the number of units sold (+42%), 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$174,713 million in 1H21 (-P$521 million
or -0.3% vs. 1H20). Excluding D&A and impairment of fixed
assets, operating costs showed a reduction of 5.1%.
The cost breakdown was as follows:
- Employees benefits and severance payments: P$35,203 million
(-4.0% vs. 1H20). Total employees amounted to 23,051 as of
1H21.
- Interconnection and transmission costs (including roaming,
international settlement charges and lease of circuits) totaled
P$6,646 million (-3.8% vs. 1H20). This, was mainly due to a
decrease in the number of sites partially offset by the FX effect
related to services to be paid in US dollars.
- Fees for services, maintenance, materials and supplies:
P$20,505 million (-0.6% vs. 1H20). Fees for services decreased by
P$208 million in 1H21 and maintenance and material costs increased
by P$77 million compared to 1H20.
- Taxes and fees with regulatory authorities: P$13,937 million
(-6.5% vs. 1H20). This decrease was mainly due to lower sales
in 1H21 vs 1H20.
- Commissions and advertising (Commissions paid to agents,
collection fees and other commissions): P$10,050 million (-4.6% vs.
1H20). Said decrease was mainly explained by lower agent commission
charges and lower advertising costs.
- Cost of handsets sold: P$9,221 million (+39.6% vs. 1H20).
P$8,730 million correspond to the cost of sales of devices in
Argentina which increased 43.2%
vs. 1H20 mainly due to the increase in prices and quantities
sold.
- Programming and content costs: P$12,548 million (-7.1% vs.
1H20). This reduction was explained mainly by operating
efficiencies, which were partially offset by price increases of
approximately 30% in almost all the broadcasting signals.
- Other Costs totaled P$10,654 million (-44.1% vs. 1H20), from
which bad debt expenses reached P$3,113 million (-61.3% vs. 1H20).
Our bad debt ratio was 1.7% as of June 30,
2021 (vs. 4.1% in 1H20) 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$7,541 million (+3.2% vs.
1H20).
- Depreciation, amortization and impairment of fixed assets
amounted to P$55,949 million (+11.7% vs. 1H20). This increase was
due to the impact of the amortization of assets incorporated after
June 30, 2020.
Net Financial Results
Net Financial Results (including Financial Expenses on Debt and
Other Financial Results, net) generated a gain of P$18,590 million
in 1H21 (vs. a loss of P$14,201 million in 1H20). This variation
was mainly due to:
in millions of
P$
|
1H20
|
1H21
|
$
Var
|
FX results
|
(5,759)
|
22,955
|
28,714
|
Net
interests
|
(10,747)
|
(7,688)
|
3,059
|
Results of
investments
|
388
|
(939)
|
(1,327)
|
RECPAM
|
3,895
|
7,748
|
3,853
|
Others
|
(1,978)
|
(3,486)
|
(1,508)
|
Total
|
(14,201)
|
18,590
|
32,791
|
Consolidated Net Financial Debt
As of June 30, 2021, our net
financial debt position (cash, cash equivalents plus financial
investments and financial NDF minus loans) totaled P$189,342
million, decreasing P$29,981 million or -13.7% when compared to the
consolidated net financial debt position as of December 31, 2020, which totaled P$219,323
million (restated in terms of the measuring unit as of June 30, 2021).
Investments in PP&E, intangible assets and rights of use
assets
During 1H21, the Company invested P$41,705 million (+22.0% vs.
1H20). These investments represented 23.2% of consolidated revenues
in 1H21, and were focused on:
- Projects associated with the expansion of TV and internet
services to improve the transmission and access speed offered to
customers.
- Deployment of 4G coverage and capacity to support the growth of
our mobile internet service and the improvement of its
quality.
- Extension of our transmission networks in order to unify the
different access technologies, reconverting the copper fixed
networks into fiber or hybrid fiber-coaxial networks.
- Investments in customer contact systems.
Other Initiatives
Telecom continues to encourage a more digital life in order to
promote access and development of digital skills and
competencies.
The Company also continued with its developing programs such as
"digit@lers" and "digit@lers girls", offering free programming and
digital workshops.
During the second quarter, Telecom´s 2020 Integrated Report was
finished and included in our investors web.
Relevant Matters
Finnvera:
On May 14, 2021, the company
closed a credit facility guaranteed by Finnvera plc (the official
export credit agency of Finland)
for up to US$30mm, being: (i) JPMorgan Chase Bank, N.A. the
initial lender, mandated lead arranger and residual risk guarantor,
(ii) JPMorgan Chase Bank, N.A., London Branch, the facility agent, and (iii)
JPMorgan Chase Bank, N.A., Sucursal Buenos Aires, the onshore
custody agent.
Proceeds of the loan will be used to finance up to 85% of
imports of certain goods and services, certain goods and services
originated in Argentina and the
payment of the applicable premium to Finnvera.
On July 27, 2021 Telecom received
a disbursement of US$5.1 million
(US$0.7 million was discounted
corresponding to the premium)
Issuance of Class 9 local bond
Issuance Date: June 7, 2021.
Amount Issued: US$91.8 million to be paid in Argentine
pesos at the applicable exchange rate.
Maturity Date: June 7, 2024.
Amortization: Bullet.
Interest Rate: 2.75% p.a.
Interest Payments: Quarterly.
Repayment of 2021 Class A notes
On June 15, 2021, the Company
repaid the outstanding amount of its 2021 Class A Notes. Total
consideration was US$106.6mm
(US$103.0 million in principal and
US$3.4 million in interests).
Resolution of the Chamber II of the Federal Court of Appeals
on Administrative Litigation Matters
On April 30, 2021 the Federal
Court of Appeals on Administrative Litigation Matters resolved to
grant the appeal filed by the Company, revoked the decision of the
original instance, and, consequently, admitted the requested
precautionary measure, ordering the suspension of the effects of
sections 1, 2, 3, 4, 5 and 6 of Decree 690/20 and its resolutions.
Consequently, the non-applicability to the Company for a period of
six months.
In order to reach said decision, the Court considered,
among other reasons, that the "configuration of circumstances
prima facie lead to serious and founded questioning of Decree
690/2020's reasonability standard and legitimacy and of ENACOM's
resolutions adopted as a consequence thereof, due to the direct
adverse effects they have on Telecom Argentina's property rights,
which derive from ICT services provision under a free competition
system as ruled, authorized and granted (depending on the case), by
the National State itself."
The National State and ENACOM presented an extraordinary appeal
against the resolution of the Federal Court of Appeals on
Administrative Litigation Matters, which on June 18, 2021 was rejected by the Court. On
June 29, 2021, the National State and
the ENACOM filed a complaint before the Supreme Court of Justice,
which as of the date of this Press Release has not yet been
treated.
Other Relevant Matters
Call for an Extraordinary General Shareholders' Meeting for
August 11, 2021
On July 13, 2021, the Board of
Directors called for an Extraordinary General Shareholders'
Meeting to be held on August 11, 2021
in order to consider the "Total or partial withdrawal of the
"Facultative Reserve to maintain the capital investments level and
the current level of solvency of the Company". Distribution of cash
dividends or dividends in kind or in any combination of both
options according to the Company´s current situation. Delegation of
powers to the Board of Directors."
Repayment of 2021 Class A notes
On July 31, 2021, the Company
repaid the outstanding amount of its Class 4 Notes. Total
consideration was P$1,200 million.
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 June 30, 2021, Telecom
Argentina had 2,153,688,011 shares issued and outstanding.
For more information, please contact Investor Relations:
Fernando
Balmaceda
(5411) 4968
5222
|
Lucas
Berges
(5411) 4085
7604
|
For information about Telecom Argentina's services, visit:
www.telecom.com.ar
www.personal.com.ar
www.personal.com.py
www.cablevisionfibertel.com.ar
Disclaimer
This document may contain statements that could constitute
forward-looking statements, including, but not limited to (i) the
Company's expectations for its future performance, revenues,
income, earnings per share, capital expenditures, dividends,
liquidity and capital structure; (ii) the continued synergies
expected from the merger between the Company and Cablevisión S.A.
(or the Merger); (iii) the implementation of the Company's business
strategy; (iv) the changing dynamics and growth in the
telecommunications and cable markets in Argentina, Paraguay, Uruguay and the
United States; (v) the Company's outlook for new and
enhanced technologies; (vi) the effects of operating in a
competitive environment; (vii) the industry conditions; (viii) the
outcome of certain legal proceedings; and (ix) regulatory and legal
developments. Forward-looking statements may be identified by words
such as "anticipate," "believe," "estimate," "expect," "intend,"
"plan," "project," "will," "may" and "should" or other similar
expressions. Forward-looking statements are not guarantees of
future performance and involve certain risks and uncertainties that
are difficult to predict. In addition, certain forward-looking
statements are based upon assumptions as to future events that may
not prove to be accurate. Many factors could cause actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements that
may be expressed or implied by forward-looking statements. These
factors include, among others: (i) the Company's ability to
successfully implement our business strategy and to achieve
synergies resulting from the Merger; (ii) the Company's ability to
introduce new products and services that enable business growth;
(iii) uncertainties relating to political and economic conditions
in Argentina, Paraguay, Uruguay and the
United States, including the policies of the new government
in Argentina; (iv) the impact of
political developments, including the policies of the new
government in Argentina, on the
demand for securities of Argentine companies; (v) inflation, the
devaluation of the peso, the Guaraní and the Uruguayan peso and
exchange rate risks in Argentina,
Paraguay and Uruguay; (vi) restrictions on the ability to
exchange Argentine or Uruguayan pesos or Paraguayan guaraníes into
foreign currencies and transfer funds abroad; (vii) the impact of
currency and exchange measures or restrictions on our ability to
access the international markets and our ability to repay our
dollar-denominated indebtedness; (viii) the creditworthiness of our
actual or potential customers; (ix) the nationalization,
expropriation and/or increased government intervention in
companies; (x) technological changes; (xi) the impact of legal or
regulatory matters, changes in the interpretation of current or
future regulations or reform and changes in the legal or regulatory
environment in which the Company operates, including regulatory
developments such as sanctions regimes in other jurisdictions
(e.g., the United States) which
impact on the Company's suppliers; (xii) the effects of increased
competition; (xiii) reliance on content produced by third parties;
(xiv) increasing cost of the Company's supplies; (xv) inability to
finance on reasonable terms capital expenditures required to remain
competitive; (xvi) fluctuations, whether seasonal or in response to
adverse macro-economic developments, in the demand for advertising;
(xvii) the Company's ability to compete and develop our business in
the future; (xviii) the impact of increased national or
international restrictions on the transfer or use of
telecommunications technology; and (xix) the impact of the outbreak
of COVID-19 on the global economy and specifically on the economies
of the countries in which we operate, as well as on our operations
and financial performance. Many of these factors are macroeconomic
and regulatory in nature and therefore beyond the control of the
Company's management. Should one or more of these risks or
uncertainties materialize, or underlying assumptions prove
incorrect, actual results may vary materially from those described
herein as anticipated, believed, estimated, expected, intended,
planned or projected. The Company does not intend and does not
assume any obligation to update the forward-looking statements
contained in this document. These forward-looking statements are
based upon a number of assumptions and other important factors that
could cause our actual results, performance or achievements to
differ materially from our future results, performance or
achievements expressed or implied by such forward-looking
statements. Readers are encouraged to consult the Company's Annual
Report on Form 20-F and the periodic filings made on Form 6-K,
which are periodically filed with or furnished to the United States
Securities and Exchange Commission, as well as the presentations
periodically filed before the Argentine Securities and Exchange
Commission (Comisión Nacional de Valores) and the Buenos Aires
Stock Exchange (Bolsas y Mercados Argentinos), for further
information concerning risks and uncertainties faced by the
Company.
Contacts:
Fernando Balmaceda
(5411) 4968 5222
Lucas Berges
(5411) 4085 7604
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SOURCE Telecom Argentina S.A.