#Telecom Argentina Reports Solid Financial Recovery for FY24
Telecom Argentina S.A. announced its financial results for the fiscal year 2024 (FY24), showcasing a notable recovery marked by a net income of P$1,033,252 million. This performance significantly contrasts with the previous year, which witnessed a substantial loss. Key growth dynamics were observed particularly during the fourth quarter, where service revenues increased by 2.6% compared to the same period in 2023.
The company recorded consolidated revenues of P$4,137,596 million in FY24, reflecting a decline of 7.7% in constant currency versus FY23. However, the service revenues downturn showed signs of stabilization, with a year-over-year decline of 6.4%, improved from a 10.1% drop in FY23. The positive fourth quarter figures indicate a gradual recovery trend amidst high inflation, reported at 117.8% year-on-year.
In FY24, Telecom Argentina witnessed growth in its mobile and cable TV subscriber segments. Mobile access surged to 21.6 million, an increase of 621 thousand from FY23. Meanwhile, cable TV subscriptions rose to 3.2 million, adding 61 thousand subscribers. Although broadband access saw a slight decrease to 4.0 million, the overall customer base growth suggests improved market engagement.
The company's operational margin before depreciation remained stable at 28.2%. Moreover, consolidated operating costs decreased by 9.9%, highlighting improved efficiency and cost control measures. These reductions were driven primarily by decreased employee benefits and interconnection costs.
Telecom Argentina's financial results were significantly influenced by the application of inflationary accounting guidelines, allowing a more accurate depiction of fiscal health amidst Argentina’s economic landscape. The company also benefited from substantial foreign exchange gains, contributing to its strong net income.
Looking ahead, Telecom Argentina aims to enhance its service offerings and network capabilities. The recent acquisition of Telefónica Móviles Argentina for US$1.245 billion is expected to fortify the company's market position and expand its product range. Investments in network infrastructure, particularly in advancing 4G and expanding 5G coverage, remain a priority for the company.
Telecom Argentina reported a consolidated revenue of P$4,137,596 million for FY24, with service revenues showing signs of recovery, particularly in the fourth quarter where they increased by 2.6% compared to the previous year. Importantly, the company achieved a net income of P$1,033,252 million, a significant turnaround from the loss experienced in FY23, primarily driven by gains from foreign exchange differences.
Service revenues for FY24 totaled P$3,884,058 million, reflecting a decrease of 6.4% in constant currency compared to FY23; however, the fourth quarter demonstrated positive growth, with revenues rising by 2.6% year-over-year. This trend indicates a stabilisation in the company's performance amidst challenging economic conditions.
Telecom Argentina has applied inflationary accounting as per CNV Resolution 777/18, leading to comprehensive adjustments in financial reporting. For FY24, inflation was reported at 117.8%, which necessitated the restatement of financial figures. This approach provides a clearer view of the company's performance in real terms, amidst an inflationary environment.
Telecom Argentina's customer base saw a positive trajectory in FY24, with mobile access increasing to 21.6 million and cable TV subscriptions rising to 3.2 million. Such growth, despite fluctuations in broadband subscriptions, signifies an expanding market presence and consumer uptake in core services.
Operational costs for FY24 decreased by 9.9% year-over-year, indicating improved efficiency in cost management. The company also reported a stable operating income margin of 28.2%, suggesting resilience in profitability amidst inflationary pressures.
As of December 31, 2024, Telecom Argentina's net financial debt decreased by 36.9% in real terms compared to the previous year, amounting to P$2,524,923 million. This reduction enhances the company's financial flexibility and stability, positioning it favourably for future investments and operational growth.
Telecom Argentina announced a dividend distribution in kind, involving Global Bonds valued at approximately US$145.6 million. This strategic move demonstrates the company's commitment to returning value to shareholders while managing its capital reserves effectively.
The acquisition of Telefónica Móviles Argentina for US$1.245 billion is poised to strengthen Telecom Argentina's market position significantly. This strategic move is expected to enhance service offerings and improve operational capabilities, reinforcing the company’s long-term growth trajectory.