TEO - Earnings call transcript Q2 2022

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Luis F Rial Ubago

Good morning. On behalf of Telecom Argentina, I would like to thank everybody for participating on this conference call. The participants of today's conference call are Roberto Nobile, Chief Executive Officer; Adrian Calaza, Chief Financial Officer, and myself, Luis F Rial Ubago. The purpose of this call is to share with you the results of their six-month period and second quarter of fiscal year 2022 ended in June 30, 2022.

If you have not received our press release or presentation, you can call our Investor Relations office to request the documents or download them from the Investor Relations section of our website located at the inversores.telecom.com.ar. go the our company. to the to like of details would so information safeguard know I certain Telecom’s We the objectives. Q&A mention conference like call statements would to and session, clarify we strategies performance, plans, future that during forward-looking and about will as statements not that cause for limited and legislation effects and annoying results and to to of performance. Telecom’s financial such of of as the in operate economic of COVID-XX on general uncertainties differ services, potential in well the outbreak and industry changes the products demand operations the specifically, changes our Telecom’s to our materially, market economic subject the operations in countries regulations, economy conditions entities are actual in we the Such and our on could and economies include global the the possible which but of effects impact as

release, in mentioned the include half may understand. IAS values and the to also resolution of forward-looking literal we effects first in accordance designed expression call. they factors of the accounting XX, December the that that including XXXX, this real reported affect Our XX. figures the will be and periods was company easier has of SEC which that applied The in by corresponding certain are this effects adoption In adjustment copy presentation, commission to establishes Accordingly, the to the be annual XXXX. to financial inflationary special ended could EMB, XXXX XX-K statement for as XXX/XX to with historical National include Form will Law Labor inflation statements figures intermediate Resource the the of adopted a and all describes press included during any was reflected which which sent the

is Our presentation. press earnings by release complemented

or business contained end with agenda the we and today's or read includes will should disclaimer Q&A presentation. The financial and the in for session. of conference two one, the highlights, call audience slide call You slide a

Adrian with the who turn me start CFO Calaza, call will let presentation. Now, to the

Adrian Calaza

Luis. morning, you, Good Thank welcome to and everyone.

slide highlights as our a of to June XXXX. three Moving XX, main summarizes

operational main XX.X%. of first our half financial EBITDA Our achievements were margin the ‘XX during or

We continue of impact rising reduce cost costs. management to perform to the labor

Our posts Cash CapEx in of for generation half forward price stable. $XXX increases solid ‘XX of million. We first and a flow scenario. approximately challenging with services our inflation remains move

mobile subscriber digital. new Our services continues migrate to solution base flows a launch grow. analytic to We to

pay Our FinTech grow to personal almost continues clients. onboarding XXX,XXX reaching

our grow in we it company cybersecurity launched Chile. have We

the operations SA, the acquired in the strengthens Servicios company OCLC which in our province have Mendelssohn. We our of footprint

receive We $XXX.X loan we have for the of disbursement loan do We agreement July canceled enter with XX, the on million. a XXXX, term the and remaining principal into under new million. and $XXX amount IFC of total the

We equivalent $XXX on have second dividends million. in paid June of time the XXXX for an

from closed $X.X have us total carbon coming a This energy, of the auction around was of XXX,XXX the decrease shows constant XXXX. We company. year-to-year. megawatts X first the to of to megawatts consumed incomes the will XXX,XXX emissions in of generation the which total renewable percent allow our Their company by times. XX% EBITDA totaled measuring reduce represents XX% basis buy billion. half fiscal Slide total for Revenues figures $X.X the revenues was year billion.

subscribers Broadband million. Pay of XXXX clients XX.X the when XXXX. amounted of was half first million. X.X in Telecom’s telephony to half our subscriber for amount during remain X.X without IP fixed the million Increase lines to XXX,XXX amounting first half Having almost X.X the X.X for XXXX. margin constant mobile compared first voice in and subscribers million total more than Fixed Argentina totaling almost clients close respectively. TV to of XX%. and EBITDA lines, base IP voice Our to million, considering

Our million X.X quarter X mobile million the total conversion our of partner. from second to customers to commercial have broadband increase strategy XX% versus of unit allowed a our XXXX. customers has us We've currently

Finally, regional operations. our turning

subscribers Hawaii, We X.X in clients mobile Pay and XXX,XXX million UAE. TV in have

Moving the of to local Inflation inflation Slide XXXX, June during as accelerated shows quarter. has evolution X, second Argentina of has it inflation. Year-over-year of been in XX%. the

postpaid comparison, meaningful, XX.X%. In June XX%, prices increased the July XX% XXXX. in our in prices of Inflation inflation we inflation X.X% we increased communications XX% impact last in and the index. quarters April, In XX% of and January, XX% In adjustment register during today, FTTH is shows prepaid and main our In The respectively. we July. April, in of the amounting have were X%. communications during We the XXXX. our have by The are services postpaid services for lower increased general by HFC four remain the in XXXX. below will and year-over-year as by Here our price we plans in Moreover, January. Slide plan prices by have and of by XX% TV impact services high index of broadband, have December XXXX, XXXX, increased X% July, in XX% and by Immortalize January, Pay that XX% subscription in April, Prices of local increased during CPI by XX% was items not variation. CPI. and X prices prepaid have industry the both index. only XDSL envision XX%. In price the our increases of postpaid prepaid XXXX increased

TV in are fixed July, up and Prices Additional by the Football XXXX, of as our XXXX. XX%. January, XX% than Prices services same services voice April, both such basic period, have channels or shows increased our increased Pay Pack XX% Premium increased segment. in in X and less increased Postpaid in XX% have evolution XX% clients or more in have Slide More April, by products. in services July. X.X%. and XXX,XXX of the to subscribers

in Prepaid is X.X%. share currently almost increased postpaid clients Our subscribers have or XX%. XXX,XXX

segment a strong prepaid commercial the observed given remained Broadband We initiatives. by our in growth has access steady. have

have FTTH subscriber access segments. registering and of segment. growing XDSL slight on We liberal of TV AF mostly base Growth is of constant the HFC reduction platform. a remain in our a almost Pay decrease performance X.X%. And experienced continue the flow is we

solution of fixed Pay connection new have Additionally, which of In TV our we continued fixed cable has for allows copper digital. customers, ISBDT glassy reduction to Analog launched in the mainly voice upgrade the their lines. traditional accessories

have the our than accesses increasing lines. XXX,XXX IP other On more hand, telephony

evolution Service where XX%. year-over-year revenues half first was real Slide a revenues. Moving shows which decrease terms, XX% ‘XX. In to inflation period in versus our X, in of the billion almost ARSXXX services totaled of

maintenance to as increase and XXXX. and was participation fixed breakdown an an show June as Slide services broadband sales revenue of XX%, of the X equipment XXXX data in mobile describe Our and XX%, mobile breakdown revenue when compared increase the Pay and our follows: broadband XX%, The TV broadband revenues June revenues revenues revenue businesses. X%. data mobile fixed XX%, telephony and services in telephone

Mobile XXXX, amounting to upper customer subscribers our postpaid June competitive to the per total of XX% left month. base, landscape postpaid of As shows the sharp

user during a average half gigabytes month usage of has reaching of half the first mobile of personnel to an During have the per clients. continued XXXX. increase, first of per internet positive inflow than Mobile net more XXXX X.X

with XXX%, XX% our first and and increased comparing FTTH megabytes was which a XX speeds X% Additionally, of between XXXX total by of growth subs we XX have HFC continue megabytes by product versus ‘XX. in mainly of to per connections, of average space ‘XX, during increase This explained half first second, half a megabytes our the respectively. and the the

The was reduce their and half XX%. to for currently XX XXXX, X%, as EBITDA, way. in margin approximately megabytes services with $XXX nuclear XXXX. speeds and respectively per voice other the close Our X% XX%, business average XX%, as services data approximately and generated $XX browsing and break strong billion XX in of Peril XX%. X%, and during very connections EBITDA revenues HFC shows follows: that second. our FTTH Slide broadband million TV services first Revenues of of of is Nuclear was June

customers XXX,XXX totaled mobile XX% our Palawan The continue FinTech flow provides In XXXX. of first main the HD personnel the reaching of increase and to to X.X TV XXX,XXX XX,XXX more XX gain. mobile performance personal Pay X, services totaled The of segment, XXXX almost growing XX,XXX. amounted than June XX% financial widget versus results our the cities internet indicators in subscribers of the fixed main As first reaching half Slide homes fixed versus show XXX deployment million. XXXX subsidiary growing network and some data key fast. and of personnel customers at services half

telcos quarter. times accounts by operators. Almost onboarding clients amounting personnel-based prepaid XXX,XXX, two XXXX, of to to the other number belong XXX,XXX. than local almost June these of have versus times of clients previous XX% roughly As amounting The multiplied more card three to

in I go our launched local was Additionally, who in the F pass financial personal will page, media advertising first July. Ubago, will performance. to over call Rial Luis now campaign

Luis F Rial Ubago

our we Calaza. overview financial an of Thank main you, Adrian slide In figures. XX, provide

nominal amounted million, the XX.X%. cost -- figure EBITDA D&A terms half margin revenues inflation XXXX first XX.X%. figure to as X.X% decrease first Service of ARSXXX in terms. revenues visit lower real terms In to terms impact structure on manage XX% than company EBIDA different were -- half the rising in up increased up of XX% revenues cost the showing increases. its the in said reduce of grew the an EBITDA impact During company's decreased it before reaching XX, revenues generating versus real When real Operating Slide X.X% continued ARSXXX more EBITDA nominal the by costs. to turn, by XXXX margin consolidated labor adjusted of costs XX% and by real in XX a same of goes XX% Operating in of nominal to the costs. and was components by year-over-year shows the terms terms million. ‘XX. analyzing show in that's XX%

most the During them XXXX, when costs compared inflation remain successfully almost line as the decrease half these of contained first from coming all company inflation. in of a in or nine, of has with pressure experienced the

approximately debt good and of increases the impact over situation economic was our in exceptions programming and increases We inflation. In mainly have increased Salaries XXXX, which unionized and XX%. close turn, and for explained advertising. have increase, content bad results costs and the observing a costs, Bad and on which up main expenses, incomes. our commissions been employees non-unionized labor in with hardware with has by were cost increase and Argentina, clients expenses interconnection debt XXXX direct negotiation the

increasing evolution the observe in between our time been only to revenues. XX. have than the XX, totaled Slide inflation. labor to normally. the during X.X% ARSXX.X In we by compared company's salary debt salaries. the speed related net business of has the currently costs decreased frequency main as were different inflation increases, dynamics The we or and below It Slide adjustment first situation, is service also of determined for second sales in that stand accelerated point the inflation, half EBIT the are of inflation price magnitude and real is the showed this while XXXX the close accelerates, The during agreements drivers country billion inflation future our important performing increases. months was total collections below but and negative increasing adjustment to your be As of versus present quarter bad the salaries our revenues other we first six period of income XXXX XXXX, and XXXX remark costs price and adjustment third lower terms. over between of not evolution

half billion consolidated company's historical a positive mainly and the mainly net with billion, ARSXX.X a results combined almost explained real of margin is income ARSXX.X first constant We net even the of an operating X% of decrease measure marketing negative as of in resulting and In terms. revenues, the with the it your our XX%. have EBITDA or D&A, to in This when XX.X% financial was decreasing due XXXX, inflation inflation by summary to the of of tax The of Capex figures by results of adjustment billion in same net official shows half $XXX first ARSXX at intangible mainly a million during amount compared period. in billion. rate. financial equivalent This the the which positive of than lower income was gains of the assets XXXX, XX, were amounted interest more last the and lower to year adjustment company's charges. PP&E Slide FX and ARSX.X almost an driven positive

to and our installations access Our operations and was network to XX% And composed amount CapEx technology. in consolidated CapEx of our in was equipment Technical amounted faraway. almost by or investments total balance of our customer The allocated CPE. mainly revenues. international to premise

were XXXX, more XXXX XX over another first FTTH than the half sites sites when XXX more to were were deployed network and blocks. the XX existing expand new mobile ready of During than new built

Additionally, in XX,XXX HFC network we perform with FTTH blocks blocks. network or overlay was in HFC the upstream an increased overall X,XXXX capacity

Additionally, the [ph]. we in mainly province announced a of new regional investment Enlasa

We the almost more we our in same going to first network Slide will our sites coverage. new that are increase half expand to FTTH XX XXX,XXX of XXXX. XXXX of build and period homes during our cash flow generation location compared with the to XX describes market

XXXX real our by see amount impact a the cash operating decrease this investment of the EBITDA versus first in In but very first been XX, during previous cash free explained year. with of currently the of approximately million fortunately first flow when the to secured For the compared of offset for is lower solid, figures cash amounting year. free we is units. half half flow our the has generation key stable terms, the XXXX, XXXX by measuring remaining in of variation the Slide half $XXX CapEx flow

called June after gross $XXX payment $X.X XX, XXXX. XXXX, almost consequence, of equivalent December to of increasing current an company XXXX, on almost dividend our In for the or X.X% June was $X.X debt debt and Our of billion million million. equivalents net $XXX billion. The amounted cash

X.XX key ratio shows quarterly was Our -- times. ratios. debt a some to net EBITDA of XX, evolution Slide right X.X

to affected attempts revenues of or mainly levels since positive Currently, mainly evolution ratio it was XXXX, Argentina. in economic due reached of or X%, the COVID-XX. ratio this Our by situation

remained CapEx, first in XXXX of We are are of following for first revenue due ratio XXXX, the we revenues Gross to the mainly decrease elections the and monitoring debt XXXX X.X%. percentage level part in up XX%. at was on additional to below This times. this of answer half In almost EBITDA issue closely of year. to CapEx half didn't X.X our a XXXX previous the

EBITDA financial to breakdown XX, lower times, debt was without are of two solid net shows debt. very Slide compared Our the than but when telcos. ratios a

successful. For have latest transactions management emerged liability

IFC for disbursement amount During from July we received million. an of $XXX.X

are basis. XX% of amount less for $X.X total US XXXX, ‘XX remaining manageable term and the canceled and to of have dollars. $XXX debt half Total as XXXX, XXXX on and we our years of due outstanding In in debt billion principal the Additionally, loan for first those maturities under a maturity of very million. denominated performance June than to the amounted

local markets We expect continue the needs. it to accessing for financing protentional capital

In fact, year, has per approximately the fund. suffer capital increased XX% in about local versus dissipation tune of Abruptly] of Ended to markets our debt the which [Call

Telecom Argentina (TEO) 12 Aug 222022 Q2 Earnings call transcript