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Mexican wireless phone giant America Movil SA more than doubled its net profit in the second quarter on the back of stronger currencies as the company added a record 7.4 million subscribers to its client rosters. The Mexico City-based company, which also has operations across Latin America and in the U.S., said it ended the quarter with 73.8 million wireless customers.

Mexican unit Telcel added 1.7 million subscribers to 32.3 million, while Claro in Brazil added 1.9 million to 16.2 million. The company said sales in the quarter rose 33.5% to 42.59 billion pesos ; operating profit rose 6.1% to MXN6.74 billion and earnings before interest, taxes, depreciation and amortization, or EBITDA, was up 10% to MXN11.80 billion.

America Movil said the exceptionally strong subscriber growth, with its associated costs, lowered its EBITDA margin to 27.7% from 33.6% a year ago. At the same time, gains in the Mexican peso and Brazilian real ($1=BRL2.407) led to exchange gains of MXN4.3 billion, helping to boost net profit in the quarter to MXN7.9 billion from MXN3.19 billion in the year-ago period.

Net debt as of June 30 was MXN36.7 billion, down 14.1% from the end of 2004 and equivalent to 0.8 times 12-months trailing EBITDA, America Movil said. Mexican unit Telcel had sales of MXN21.1 billion in the second quarter, up 20.1% from the like 2004 period, although average revenue per user was flat. Telcel’s EBITDA was up 23% on the year to MXN9.4 billion, with cost controls contributing to a 44.7% EBITDA margin.

Revenues in Brazil rose 41.5% to BRL1.69 billion, although the unprecedented subscriber growth contributed to an EBITDA loss of BRL179 million. Average revenue per user in Brazil fell 10.2% to BRL24.00, but was higher in dollar terms. America Movil officials had warned analysts in June that they no longer expected to achieve the 10% EBITDA margin in Brazil this year that they had been aiming for, but rather expect to break even.

America Movil’s biggest subscriber growth came in Colombia, where it gained 2.2 million customers to more than 9 million. In the U.S., Tracfone added 83,000 subscribers to 4.9 million. U.S. revenue was up to $241 million from $185 million, and EBITDA rose to $31 million from $19 million.

In Central America, where the company has 2 million fixed-lines and 3.1 million wireless subscribers, sales rose to $329 million from $243 million, and EBITDA grew even faster to $179 million from $127 million, for a margin of 54.4%.

Source : Online Resources