Telecom Argentina (TEO) Q1 2025 earnings summary

Executive summary

• 1Q25 marked by the acquisition of Telefónica Móviles Argentina (TMA), creating Argentina's most competitive telecom operator with leading market shares in mobile, broadband, and pay TV.

• Consolidated revenues rose 27.8% year-over-year in constant currency to P$1,363,353 million, with service revenues up 26.5%.

• Net income for 1Q25 was P$93,202 million, mainly driven by higher operating income and foreign exchange gains.

• Integration of TMA expected to drive synergies, efficiency gains, and accelerated 5G/FTTH deployment.

• Customer base in Argentina showed positive trends: mobile accesses up 0.9%, pay TV up 0.7%, and fixed internet down 1.1% year-over-year.

Financial highlights

• 1Q25 revenues up 13% year-over-year in US dollars; EBITDA up 23% year-over-year to US$421 million.

• EBITDA margin improved to 33.1% (IAS 29), up from 30.3% in 1Q24.

• Net financial debt rose 30.3% from December 2024 to P$3,587,066 million, mainly due to loans for the TMA acquisition.

• CAPEX for 1Q25 totaled US$165 million (P$220,409 million), up 8% year-over-year, focused on mobile and FTTH network expansion.

• Free cash flow for 1Q25 was US$80 million, down from US$116 million in 1Q24.

Outlook and guidance

• Efficiency plan underway to improve TMA margins, targeting elimination of redundant costs and optimization of procurement and operations.

• Regulatory approval for the TMA acquisition expected within 6–14 months post-transaction; companies continue to operate separately until then.

• Anticipated synergies and enhanced profitability from integration, with continued investment in 5G and FTTH.

• Shareholders authorized up to US$300 million in potential dividend distributions, subject to board discretion.