Mexico's America Movil says 3Q profits up 32 pct

MEXICO CITY - Mexican telecom America Movil SA reported on Tuesday that profits rose 32 percent in the third quarter on strong growth in its subscriber base.

Profits for the quarter grew to 12.4 billion pesos ($1.14 billion), or 0.37 pesos ($.03) per common share and $0.71 per ADR, from 9.4 billion pesos ($862 million) in the same period of 2007, Latin America's largest mobile phone service provider said in an earnings report.

The performance was in line with analysts' expectations.

The company said revenues rose 10 percent to 85.3 billion pesos ($7.8 billion) for the quarter, from 77.7 billion pesos ($7.1 billion) in the same period of 2007. That growth was driven by 7.3 million new customer accounts, an 18.3 percent increase in the rate of subscriber growth compared to the third quarter of 2007.

As of the end of September, America Movil said, it had 172.6 million cellular accounts and 3.9 million land lines.

Subscriber growth was led by 2.6 million new accounts in Brazil. The company also gained 1.5 million subscribers in Mexico, and 1.2 million in Colombia.

America Movil began offering service in northern Brazil in July, completing its coverage in the nation. It estimates that cell phone market penetration in the Latin American countries where it operates is now at 78 percent.

The company also rolled out the iPhone in 10 countries in August.

Operating income rose 25 percent for the quarter to 25 billion pesos ($2.3 billion) from 19.7 billion pesos ($1.8 billion) in 2007.

Earnings before interest, taxes, depreciation and amortization was 34.9 billion pesos ($3.2 billion), which the company said was almost unchanged from the same period of 2007.

The company took on 13.7 billion pesos ($1.3 billion) in new debt to fund investments and stock repurchases, increasing total debt to 106.4 billion pesos ($9.8 billion) at the end of the quarter.

Depreciation and amortization related to the write-down of older cellular networks declined from 15.7 percent of revenues in the third quarter of 2007 to 11.9 percent in 2008.

America Movil said that "for the most part" it avoided the kind of exchange rate losses that battered other Mexican companies recently with the dramatic fall of the peso. It said only about 19 percent of its debt exposure is denominated in dollars — a level the company called manageable since 13 percent of its income is also in dollars.

America Movil L-series shares closed up 2.19 percent on the Mexican Stock Exchange before the release of the report.

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