America Movil, S.A.B. de C.V.

Good morning. My name is Nadia and I'll be your conference operator today. At this time, I would like to welcome everyone to the American Mobile second quarter 2023 conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speakers and marks, there'll be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. Thank you. Now I will turn the call over to Mr. Daniel Hash, CEO of American Mobile, to begin. Thank you.

Thank you, Nadia. Welcome, everyone. Thank you for being in the American Mobile Second Quarter of 2023 Financial and Operating Report. Carlos is going to make a summary of the results. Carlos, please. Thank you, Daniel. Good morning, everyone. Well, during the second quarter, US dollar interest rates remained as volatile as they had been in the first quarter. With inflationary pressures stronger than anticipated earlier in the year, the reductions of interest rates by the Fed originally expected to take place in the latter part of 2023 appeared increasingly improbable, giving rise to an upward trend in medium and long-term rates throughout the latter half of the quarter that has continued in July. We added 2.2 million wireless subscribers in the second quarter. including 1.5 million post-pays. Brazil contributed $662,000, Austria $267,000, and Colombia $171,000. Street vendors of private editions stood at $787,000, with Brazil and Mexico adding almost $200,000 each, and Colombia $195,000. On the fixed-land segment, we obtained $331,000 door-down accesses, including 140,000 in Mexico, practically identical to the figures in the prior quarter, which makes it the second consecutive quarter with strong door-to-door net additions, 78,000 in Argentina and 45,000 in Brazil. The growth of our mobile subscriber base stayed basically on trend, with the posted base expanding 8.3% and the prepaid one 5.3%. On the fixed-land platform, broadband access growth picked up a bit to 3%, while pay-to-be accesses remained roughly flat. Second quarter revenue was down 4.6% year-on-year to 203 billion pesos in Mexican peso terms, with service revenues falling 4.2%. As in the prior quarter, this reflected the appreciation of the Mexican peso versus other operating currencies in the period. Correcting for foreign exchange effects, service revenue increased 5.0%, a slightly lower pace than that of the prior quarter. EBITDA was down 3.8% in Mexican peso terms to 78.7 billion pesos in the quarter, representing a 38.9% EBITDA margin. At constant exchange rates, it expanded 5.6% in the period, reflecting the greater operating leverage of the company. We did it by growing faster than revenue. The reduction in inflation rates we have seen in most countries, as well as the appreciation of most large currencies and the euro, this ability in dollars, have recently contributed to this through their impact on costs. Service revenue growth continues to advance on the PICS line platform, moving up to 2.3% at constant exchange rates from 1.8% in the prior quarter. On the mobile platform, it slowed down to 6.7% from 9.3% the prior quarter. The improvement of fixed-line service revenue growth was observed in three of our four principal markets, Mexico, Brazil, and Austria. In Mexico, it was driven by both corporate network services and fixed broadband services. In Brazil and Austria, by the latter. Importantly, the downward trend of pay-per-view revenue appears to be coming to an end. In the quarter, they were down 1.3%, the lowest decline in several quarters. The deceleration of mobile service revenue growth stems principally from the normalization of mobile revenue in Brazil exactly a year after the integration of revenue from former oil mobile clients acquired by Claro. The uplift in terms of revenue growth provided by former oil clients has come down to 0.8% from 6.4% a year ago. In addition to the above, we also had somewhat slower growth in Mexico and Colombia. EBITDA yearly increases were in the neighborhood of 9% in Brazil, Eastern Europe, Peru, and Ecuador, followed by Mexico at 5.1% and Austria at 4.3%. Our operating profit in the quarter 40.3 billion pesos, we are down 2.9% year-on-year, with our net profit nearly doubled from the yearly quarter to 26 billion pesos, mostly on account of greater foreign exchange gains. In the first six months of the year, capital expenditures totaled 64 billion pesos, and distribution to shareholders, 3 billion pesos, including share buybacks. In cash flow terms, we reduced our net debt by 4 billion pesos in the period. All the above was funded by our operating cash flow and by proceeds from the sale of certain shares and the payment received of the sales to sale of our interest in platform. Our net debt excluding leases totaled 356 billion pesos at the end of June, having come down by 25.3 billion pesos from the end of December on the back of the appreciation of the Mexican peso vis-a-vis other currencies, particularly the dollar. It was equivalent to 1.43 times EBITDA. So with this summary of our results, I will pass the floor back to Daniel Hash for the Q&A session. Thank you all. Thank you, Carlos.

Thank you. If you would like to ask a question, please press star, followed by 1 on your telephone keypad. If you choose a withdrawal question, please press star, followed by 2. When preparing to ask your question, please ensure your phone is unmuted locally. We'll pause for just a moment while we compile the Q&A roster. Our first question goes to Vitor Tomita of Goldman Sachs. Vitor, please go ahead. Your line is open.