America Movil's Q3 net sales rise 67% thanks to European expansion
America Movil (NYSE: AMX) saw its European expansion efforts bear fruit in the third quarter as it reported a 67 percent increase in total sales from from MXN 18.3 billion (USD 1.4 billion) to MXN 30.6 billion (USD 2.4 billion), the product of a large foreign exchange gain resulting from the stakes bought in European service providers KPN (NYSE: KPN) and Telekom Austria (NYSE: TKA).
The service provider on Thursday reported that Q3 2012 revenues rose 4.5 percent year-over-year to MXN 192.8 billion (USD 14.9 billion), and that its Q3 foreign exchange gain was MXN 9 billion (USD 69 million).
Over the past summer, America Movil laid the foundation for its European expansion ambitions by acquiring a 27.7 percent stake in KPN and later a 22.76 percent piece of Telekom Austria.
But the telco is not stopping with these two acquisitions.
According to a FierceWirelessEurope report, Telekom Austria is seeking an investment bank partner to look at potential acquisitions in Eastern Europe. One possible scenario is that TA's Eastern European investments could be transferred into a holding company that would enable America Movil to provide funds to purchase other smaller wireless, wireline and cable operators in countries where it already operates.
As of the end of September, America Movil had a total of 319 million customers, including 256 wireless subscribers and 63 million wireline voice, broadband and TV customers throughout its 18 regions, which includes Mexico, Argentina, Brazil, and the U.S.
However, the Brazil market posed a challenge for the telco in Q3 as profits in that country dropped to 24.1 percent from 25.1 percent in Q3 2011.
In addition to having to fight a growing base of competitors such as Telefonica Brazil, America Movil's Brazil division had to deal with what a TeleGeography report said was a "regulatory ban on sales to new subscribers over quality-of-service issues in a number of states."
America Movil's shares closed 25.61, up 0.13, or 0.51 percent, at the end of Friday trading on the New York Stock Exchange (NYSE).
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