BUENOS AIRES, Argentina,
March 8, 2019 /PRNewswire/ --
Note: The merger between Telecom and Cablevisión
was considered an inverse acquisition under IFRS 3 (Business
Combinations), with Cablevisión being the surviving entity for
accounting purposes. Thus, for the purposes of preparing the
consolidated financial statements of Telecom Argentina as of
December 31, 2018: i) the comparative
figures as of December 31, 2017
correspond to those that arise from the consolidated financial
statements of Cablevisión (restated by inflation in terms of a
constant measuring unit as of December 31,
2018); and ii) the corresponding information for the annual
period ended December 31, 2018,
incorporates on the basis of figures corresponding to Cablevisión,
the effect of the application of Telecom Argentina's method of
acquisition at its fair value in accordance with the IFRS 3
guidelines and the operations of Telecom Argentina as of
January 1, 2018. Moreover, the
Company has accounted for the effects of inflation adjustment
adopted by Resolution 777/18 of the Comisión Nacional de
Valores ("CNV"), which establishes that the restatement will be
applied to the annual financial statements, for intermediate and
special periods ended as of December 31,
2018 inclusive. Accordingly, the reported figures
corresponding to FY18 include the effects of the adoption of
inflationary accounting in accordance with IAS 29. On the other
hand, in order to ease the understanding and analysis of the
earnings evolution by its users, additional tables of the income
statements are included, containing figures non-adjusted by
inflation and which were used as the base for the information
presented in constant pesos, exposing on pro forma basis the
comparative figures for FY17 as if the merger between Telecom and
Cablevisión had been effective as of January
1, 2016. Finally, comments related to variations
of results of FY18 and vs. FY17 mentioned in this press release
correspond to "figures restated by inflation" or
"constant".
- Consolidated Revenues amounted to P$168,046 million in FY18,
of which Service Revenues reached P$155,212 million. Considering
the breakdown of Service Revenues, Mobile Services amounted
P$57,776 million; Internet Services totaled P$37,742 million, while
Cable TV Services and Fixed Telephony and Data Services amounted to
P$36,067 million and P$23,149 million, respectively.
- Mobile Internet revenues of Personal in Argentina reached a 62.1% participation in
Service Revenues, in current terms.
- Mobile subscribers in Argentina: 18.6 million in FY18, while Cable
TV subscribers and Broadband accesses totaled 3.5 million and 4.1
million, respectively.
- Mobile ARPU of Personal in Argentina in FY18 increased to P$174.0 per
month in FY18 (+22.3% vs. FY17).
- Broadband ARPU reached P$623.4 per month in FY18
(+34.6% vs. FY17). Monthly churn was 1.9% in FY18.
- Cable TV ARPU increased to P$696.2 per month in FY18 (+36.4%
vs. FY17).
- Consolidated Operating costs -including D&A and
impairment of PP&E and intangible assets- totaled P$146,789
million in FY18 (-5.1% vs. FY17).
- Operating Income before Depreciation and Amortization
reached P$56,368 million in FY18 (+3.2% vs. FY17), 33.5% of
Consolidated Revenues.
- Net Income amounted to P$5,536 million in FY18. Net Income
attributable to the Controlling Company amounted to P$5,294 million
during the same fiscal year. The variation of the mentioned Net
Income vs. FY17 mainly reflects the impact of FX losses over
financial results, partially offset by the growth in Operating
Income.
- Capex reached P$42,480 million in FY18, equivalent to 25.3%
of Consolidated Revenues.
- Net Financial Debt Position: P$65,628 million in
FY18.
|
|
IAS
29
|
|
Adjusted
Proforma
|
|
|
|
|
(in
million P$ adjusted by inflation, except where
noted)**
|
|
As of December
31
|
As of December,
31
|
|
Δ
$
|
|
Δ
%
|
|
2018
|
|
2017
|
|
|
Consolidated
Revenues
|
|
168,046
|
|
172,354
|
|
(4,308)
|
|
-2.5%
|
Operating Income
before D&A
|
|
56,368
|
|
54,598
|
|
1,770
|
|
3.2%
|
Operating
Income
|
|
21,257
|
|
17,715
|
|
3,542
|
|
20.0%
|
Net Income
attributable to Controlling Company
|
|
5,294
|
|
14,544
|
|
(9,250)
|
|
-63.6%
|
Shareholders' equity
attributable to Controlling Company
|
|
225,686
|
|
n.a.
|
|
-
|
|
-
|
Net Financial
Position - (Debt) / Cash ***
|
|
(65,628)
|
|
(9,580)
|
|
(56,048)
|
|
-
|
CAPEX *
|
|
42,480
|
|
39,938
|
|
2,542
|
|
6.4%
|
|
|
|
|
|
|
|
|
|
Fixed lines in
service (in thousand lines)
|
|
3,544
|
|
3,795
|
|
(251)
|
|
-6.6%
|
Mobile customers (in
thousand)
|
|
21,009
|
|
22,146
|
|
(1,137)
|
|
-5.1%
|
Personal (Argentina)
|
|
18,316
|
|
18,980
|
|
(664)
|
|
-3.5%
|
Nextel
(Argentina)
|
|
314
|
|
717
|
|
(403)
|
|
-56.2%
|
Núcleo (Paraguay) -including Wimax customers-
|
|
2,379
|
|
2,450
|
|
(71)
|
|
-2.9%
|
Broadband accesses in
Argentina (in thousand)
|
|
4,110
|
|
4,062
|
|
48
|
|
1.2%
|
Cable TV Suscribers
(in thousand)
|
|
3,454
|
|
3,503
|
|
(49)
|
|
-1.4%
|
Argentina
|
|
3,310
|
|
3,360
|
|
(50)
|
|
-1.5%
|
Uruguay
|
|
144
|
|
143
|
|
1
|
|
0.7%
|
|
|
|
|
|
|
|
|
|
Average Billing per
user (ARBU) Fixed Telephony / voice (in P$)
|
|
219.3
|
|
152.3
|
|
67.0
|
|
44.0%
|
Average Revenue per
user (ARPU) Mobile Services - Personal (in P$)
|
|
174.0
|
|
142.3
|
|
31.7
|
|
22.3%
|
Average Revenue per
user (ARPU) Broadband (in P$) ***
|
|
623.4
|
|
463.3
|
|
160.1
|
|
34.6%
|
Average Revenue per
user (ARPU) Cable TV (in P$)
|
|
696.2
|
|
510.3
|
|
185.9
|
|
36.4%
|
|
|
|
|
|
|
|
|
|
*(CAPEX in
constant measuring unit - Figures as of FY17 calculated as the sum
of the parts of Telecom Argentina's and Cablevisión's CAPEX,
adjusting them to similar criteria.)
**(Figures may not
sum up due to rounding)
|
***(Figures as of
FY17 calculated as the sum of the parts of Telecom Argentina's and
Cablevisión's consolidated net financial positions)
|
*Unaudited non financial data
Telecom Argentina S.A. ('Telecom Argentina') - (NYSE: TEO; BASE:
TECO2), one of Argentina's leading
telecommunications companies, announced today a Net Income of
P$5,536 million for the annual period ended December 31, 2018, a decrease of P$9,208 million
or 62.5% when compared to FY17. Net loss attributable to the
Controlling Company amounted to P$5,294 million.
It is worth mentioning that the comparative figures for the
previous reporting periods have been restated so that the resulting
comparative information is presented in terms of the current unit
of measurement as of December 31,
2018.
During FY18, Consolidated Revenues decreased by 2.5% to P$
168,046 million (-P$ 4,308 million vs. FY17). This decrease is
mainly due to the increase in Revenues in FY17, as a result of its
restatement to the FY18 currency (whose variation as a consequence
of the restatement amounts to approximately 38.5%), partially
offset by the restatement of Revenues for FY18 (whose variation as
a consequence of the restatement amounts to approximately 18.4%)
and by the increase in Revenues of Internet Services and Fixed
Telephony and Data Services.
Operating Income totaled P$21,257 million in FY18 (+P$3,542
million or +20.0% vs FY17).
Consolidated Operating Revenues
Mobile Services
As of December 31, 2018, mobile
clients amounted to 21.0 million.
In FY18, mobile services revenues represented P$57,776 million
(-8.7% vs. FY17). This variation was mainly due to the higher
effect of the restatement of revenues of FY17 vs. FY18, partially
offset by the increase in the ARPU. The commercial strategy
was focused on promoting the consumption of mobile internet
services through an update of the integrated offer of plans
suitable for all market segments.
In turn, equipment revenues amounted to P$12,834 million
(-P$2,274 million or -15.1% vs. FY17). This variation is mainly due
to the greater effect of the restatement of the revenues of FY17
vs. FY18, in order to be expressed in homogeneous currency as of
December 31, 2018 and by a decrease
in the quantities sold, partially offset by the increase in prices
of handset sales.
Mobile Services in Argentina
As of December 31, 2018, Personal
reached 18.3 million subscribers in Argentina, where postpaid clients represented
39% of the subscriber base.
In FY18, mobile service revenues in Argentina (excluding equipment sales) amounted
to P$51,089 million (-6.2% vs. FY17). Considering mobile revenues
in current terms, mobile internet revenues reached 62.1% of service
revenues of Personal in Argentina
(vs. 49.7% in FY17).
The average monthly revenue per user ('ARPU') of Personal in
Argentina amounted to P$174.0
during FY18 (+22.3% vs. FY17).
As of December 31, 2018, Nextel
IDEN subscriber base reached approximately 0.3 million subscribers,
where postpaid clients represented 80% of the subscriber base and
prepaid clients represented the remaining 20%.
Commercial Initiatives
During the fourth quarter of 2018, the integration mobile
service brands began with the launch of a campaign to transport
Nextel's customers to Personal. This communication was
accompanied by the presentation of Personal's new Smart Radio
service, which includes the benefits of the most modern 3G/4G
network in the market. Smart Radio enables customers to communicate
with all users who share the radio network, including other
providers besides Personal, through the use of robust equipment or
smartphones which are compatible with the application of the
service.
In addition, the promotion of the update of our clients' devices
with discounts and special financing continued, and focusing on the
convergence of products. In terms of new releases, the entire
portfolio of iPhone devices was incorporated.
Regarding infrastructure, Personal continued to enhance the
mobile internet experience of its customers through the deployment
of its 4G and 4G+ network throughout Argentina, which currently covers more than
1,500 locations from La Quiaca to Ushuaia, and reaching more than
12.2 million customers with 4G devices throughout the country.
Accompanying these improvements through a massive communication
campaign, the 4G Personal Network was promoted as the fastest in
the country -based on the results of international benchmarks that
measure network standards through the worldwide experience of
customers-.
Likewise, Club Personal Convergente was also presented to
Fibertel and Cablevisión customers, which includes benefits with
discounts on trips, supermarkets, cinemas, shopping, and others to
the entire client portfolio of the different services.
Personal in Paraguay
('Núcleo')
As of December 31, 2018, Núcleo's
subscriber base reached around 2.4 million clients. Prepaid and
postpaid customers represented 83% and 17%, respectively.
Núcleo generated service revenues equivalent to P$6,687 million
during FY18 (+41.6% vs. FY17). Internet revenues represented 45.3%
of FY18 service revenues (vs. 44.5% in FY17).
Cable TV Services
Cable TV service revenues reached P$36,067 million in FY18
(-9.6% vs. FY17). This decrease was mainly explained by the greater
effect of the restatement of FY17 revenues vs. FY18, in order to be
expressed in homogeneous currency as of December 31, 2018, which was partially offset by
the upselling of value added services combined with price
adjustments. Cable TV subscribers totaled almost 3.5 million, while
the Cable TV ARPU reached P$696.2 during FY18, rising +36.4% vs.
FY17. Moreover, average monthly churn during FY18 was 1.4%.
In the fourth quarter of 2018, Cablevisión continued to add
featured titles to its on-demand content grid, being the most
relevant the co-production Un
Gallo para Esculapio (season II), and Morir de
Amor.
In addition, the Company continued offering the possibility to
customers to enjoy different Cablevisión Flow exceptional content
without consuming mobile data of their Personal plans, as were the
cases of the friendly matches of the Argentine National Soccer Team
played after the World Cup, and the Copa Libertadores final
between Boca and River and the Club World Cup 2018.
In the fourth quarter of 2018, Cablevisión continued to migrate
its clients in Uruguay in the
cities of Montevideo, Canelones
and San José to satellite technology, adding more high definition
channels to its programming to its offer and, in the near future,
new value added services.
Fixed Telephony and Data Services
During FY18, revenues generated by fixed telephony and data
reached P$23,149 million in FY18, +14.2% vs. FY17. The increase in
fixed telephony services was mainly explained by monthly fee price
increases that came into effect for both corporate and residential
fixed line customers, and additionally due to the bundled offer of
packs that include voice and internet services ('Arnet +
Voz'), that aim to achieve higher levels of customer
loyalty.
As a result, the average monthly revenue billed per user
('ARBU') of fixed telephony reached P$219.3 in FY18, +44.0% vs.
FY17.
Meanwhile, Data revenues increase (services mainly offered to
Corporate customers, SMEs, Government and to other operators) was
mainly driven by FX rate variations that affected those contracts
that were adjusted by the $/US$ exchange rate, in a context that
evidences the growing position of Telecom as an integrated ICT
provider.
In this sense, FiberCorp, Personal and Telecom presented their
unified portfolio of products and services for companies in the
province of Tucumán, Argentina,
promoting to current clients and prospects the benefits of the
integration of the corporate brands of Telecom Argentina, as well
as the latest trends in the world of technology.
In addition, and complementary to its innovation strategy in
Internet of Things, the Company launched a third device designed
for pets: Personal Bipy Mascotas, who joins family IoT
solutions already launched as Bipy Adultos and Bipy
Niños. Bipy Mascotas is an intelligent pet locator
device connected to the Personal 4G network. The device favors
remote monitoring, provides useful information of its profile and
allows the connection via voice at a distance, through a mobile
application.
Internet Services
Internet services revenues totaled P$37,742 million during FY18,
+14.6% vs. FY17. As of December 31,
2018, total broadband accesses increased to more than 4.1
million (+1.2% vs. FY17). Additionally, broadband ARPU amounted to
P$623.4 per month in FY18 (+34.6% vs. FY17). Moreover, the average
monthly churn rate for the period was 1.9%. On the other
hand, clients with service of 20Mb or higher currently
represent 40% of the total customer base as of FY18.
Consolidated Operating Costs
Consolidated Operating Costs (including D&A and impairment
of PP&E and intangible assets) totaled P$146,789 million in
FY18, a decrease of P$7,850 million, or -5.1% vs. FY17. These lower
operating costs vs. FY17 are mainly associated with the higher
effect of the restatement of FY17 vs. FY18 operating costs, in
order to be expressed in constant currency as of December 31, 2018, which allowed an increase in
Operating Income before D&A and a margin expansion. Moreover,
this decrease in costs was partially offset by greater costs of
services contracted with suppliers, including higher programming
and content costs due the incorporation of broadcasting signals of
football matches, and an increase in the charge for bad debt
expenses.
The cost breakdown is as follows:
- Employee benefit expenses and severance payments totaled
P$30,048 million (-7.2% vs. FY17). The decrease was mainly caused
by a higher effect of restatement of employee benefit expenses and
severance payments for FY17 vs. FY18, in order to be expressed in
homogeneous currency as of December 31,
2018, partially offset by increases in salaries to unionized
and non‐unionized employees together with the associated social
security contributions. Finally, total employees at the end of FY18
amounted to 25,343 (vs. 26,958 in FY17).
- Interconnection and transmission costs (including TLRD,
Roaming, international settlement charges and lease of circuits)
totaled P$5,525 million, -6.8% vs. FY17, decreasing mainly due to
the greater effect of the restatement of interconnection and
transmission costs for FY17 vs. FY18, in order to be expressed in
current currency as of December 31,
2018, partially offset by higher TLRD costs and carriers'
charges.
- Fees for services, maintenance, materials and supplies
amounted to P$16,261 million (-10.4% vs. FY17). These lower costs
are mainly due to the greater effect of the restatement of the fees
for services, maintenance, materials and supplies of FY17 vs. FY18,
in order to be expressed in homogeneous currency as of December 31, 2018, which was partially offset by
increases in fees for services, mostly related to call centers and
higher professional fees generated by a greater level of activity
driven mainly by new Company projects and by services linked to
operational management in general. There were also higher technical
maintenance costs and higher hardware and software maintenance
costs due to price increases, the US$ FX fluctuations and the
higher level of activity.
- Taxes and fees with regulatory authorities reached P$13,609
million (-8.0% vs. FY17). This decrease corresponds mainly to the
greater effect of the restatement of taxes and fees with the
regulatory authority of FY17 vs. FY18, in order to be expressed in
homogeneous currency as of December 31,
2018, partially offset by the increase in revenues, at
nominal value.
- Commissions and advertising (Commissions paid to agents,
prepaid card distribution commissions and others) totaled P$11,210
million (-3.4% vs. FY17). This decline is due to the higher effect
of the restatement of Commissions and advertising of FY17 vs. FY18,
in order to be expressed in homogeneous currency as of December 31, partially offset by higher fees paid
in favor of commercial channels and collection fees.
- Cost of handsets sold amounted to P$9,667 million
(-18.0% vs. FY17). The majority of this amount can be associated to
handset sales in Argentina, which
decreased vs. FY17 due to the greater effect of restating the cost
of equipment and handsets sold in FY17 vs. FY18 and due to the
decrease in the quantities sold, partially offset by higher average
costs per unit in FY18.
- Programming and content costs totaled P$12,156 million (+15.0%
vs. FY17), increasing largely due to the incorporation of the cost
of signals to broadcast live football matches of the first division
of the Argentine Football Association, price increases and
fluctuation of the P$/US$ exchange rate.
- Depreciation, amortization and impairment of PP&E and
intangible assets amounted P$35,111 million (-4.8% vs. FY17). This
reduction is explained mainly by a greater effect of the
restatement of the depreciation, amortization and impairment of
PP&E and intangible assets of FY17 vs. FY18, in order to be
expressed in homogeneous currency as of December 31, 2018. It is important to highlight
the recognition of the impairment allowance of the Arnet
trademark for P$ 1,623 million, because this trademark will no
longer be used.
- Other Costs totaled P$13,202 million (+5.1% vs. FY17), of
which bad debt expenses reached P$3,527 million (+28.6% vs. FY17),
and whose increase is mainly due to the impact generated by the
application as of the FY18 of IFRS 9, partially offset by as lower
other operating costs that totaled P$9,675 million (-1.5% vs.
FY17).
Net Financial Results
The Net Financial Results (including Financial Expenses on Debt
and Other Financial Results, net) showed a loss of P$18,795 million
in FY18, compared with a gain of P$3,886 million in FY17. The
result was mainly due to an increase in financial expenses on debt
of P$30,780 million, mostly due to the strong depreciation of the
peso during the FY18 and greater interest expenses generated by an
increase of the net financial debt, followed by a decrease in other
financial results, net (excluding RECPAM) of P$3,382 million
vs. FY17 (reaching P$1,774 million in FY18). The aforementioned
lower results were partially offset by a greater RECPAM
(inflation adjustment gain / loss) which amounted to P$13,403
million (generating greater earnings of P$11,481 million vs.
FY17).
Consolidated Net Financial Debt
As of December 31, 2018, net
financial debt position (cash, cash equivalents plus financial
investments and financial NDF minus loans) totaled P$65,628
million,
increasing when compared to the consolidated net financial debt
position as of December 31, 2017
(calculated as the sum of consolidated net financial debt positions
of Telecom Argentina and Cablevisión, which was P$9,580
million).
Capital Expenditures
During FY18, the Company invested P$42,480 million, increasing
approximately 6.4% from the sum of the parts of Telecom Argentina's
and Cablevisión's CAPEX as of FY17. The aforementioned investments
amounted to P$35,674 million in current terms during FY18,
increasing by 56.3% vs. FY17. The investments were focused on
projects that maximize the network capacity and on the development
of products and services that contribute to address the customer's
needs that today demand for connectivity and data availability.
Moreover, transmision and transport networks has been extended to
unify the differents access technologies, reconverting the copper
fixed networks into fiber or coaxial-fiber hybrid networks,
in order to face the the increaseing services demand from mobile
and fixed clients. Likewise, significant investments have
been made in the charging, billing and relationship systems with
customers. The Company aims to improve the capacity and coverage of
its networks, which is key factor for the transformation towards
convergent services with international quality standards, but also
to leverage the content business, with Flow as an integral content
platform and entertainment center, whose competitive advantages and
differential features place it above other platforms. In relative
terms, CAPEX reached 25.3% of consolidated revenues in FY18 (vs.
23.2% in FY17), while in current terms they reached 25.8% of
revenues.
These commercial initiatives and improvements in infrastructure
through sustained investment impacted on the quality of service
standards and were reflected in the rise of the Net Promoter Score
(NPS) indicators of recommendation of Personal as a favorite mobile
services brand. In addition, they resulted in more users from other
service companies choosing Personal, leading the industry-level
mobile number portability during the last quarter.
In the last quarter of 2018, the Company announced investments
in the Buenos Aires Atlantic Coast to expand the access network,
and improve the speed and capacity of mobile connections. The
investment plan foresees the construction of 30 new sites; in
addition to the fiber optic deployment that increases the capacity
of the 4G data network. This agreement was added to other similar
celebrated during the year with the Municipalities of the cities of
Rosario (province of Santa Fe),
the province of Jujuy, and the municipalities of the cities of
Ezeiza and Lomas de Zamora (in the
Buenos Aires Metropolitan
Area).
Breakdown of the comparative figures restated by inflation
During FY18 consolidated total revenues decreased 2.5% (-P$4,308
million vs. FY17) amounting to P$168,046 million. The inflationary
effect contained in revenues amounts approximately to P$30,886
million.
Operating income before depreciation and amortization reached
P$56,368 million in FY18 (+ P$1,770 million or +3.2% vs. FY17),
representing 33.5% of consolidated revenues (vs. 31.7% in FY17).
The inflationary effect contained in operating income before
D&A amounts approximately to P$9,994 million.
Operating income amounted to P$21,257 million in FY18 (+P$3,542
million or +20.0% vs. FY17). The inflationary effect contained in
operating income amounts approximately to -P$2,948 million, mainly
due to a greater restatement of D&A and impairment of PP&E
and intangible assets.
Net Financial results and results of equity in earnings from
associates resulted in a net loss of P$18,559 million in FY18,
representing a higher loss of P$22,798 million vs. FY17. The
inflationary effect contained in net financial results and results
of equity in earnings from associates amounts approximately to
P$22,198 million, mainly due to a positive effect from the exposure
to inflation.
Telecom Argentina recorded a
net income of P$5,536 million in FY18, which means a decrease of
P$9,250 million in relation to the net income of P$14,744 million
in FY17. The inflationary effect over net income generated a
positive impact of approximately P$16,118 million.
Relevant Matters
Loan with Deustche Bank AG, London Branch
On November 8, 2018, Telecom
Argentina took due notice of the acceptance of a loan offer by
Deutsche Bank AG, London Branch,
as organizer of syndicate of entities, for an amount up to
US$ 200 million (which could be
increased to US$ 300 million). The
loan has a term of 42 months from the date of the initial
disbursement and will accrue compensatory interest at an initial
rate per annum equivalent to LIBOR + 4.5% that will be payable
quarterly in arrears. The capital will be payable in 6 consecutive
semi-annual equal installments equivalent to 12.5% of the amount of
paid-up capital with a final payment on the due date equivalent to
25% of the initial disbursement. The proceeds from the loan were
used by the Company only to cancel partially the Syndicated Loan
agreement celebrated on February 2,
2018 for US$ 1,000
million.
Incorporation of a new lender for US$ 100
million to the Deutsche Bank loan
On November 14, 2018, in
accordance with the provisions of the loan agreement signed on
November 8 between Telecom Argentina
and Deutsche Bank AG, London
Branch, as organizer of a syndicate of entities, ("the Loan"),
today a new lender was incorporated to the Loan for an amount up to
US$ 100 million, subject to the same
terms and conditions of the Loan that were duly informed.
Other Relevant Matters
Cancellation of the syndicated loan agreement celebrated in
February 2018 for US$ 1,000 million
In October 2018, the Company had
prepaid US$ 500 million outstanding
under the syndicated loan agreement entered into on February 2, 2018 for US$
1,000 million (the "Original Loan"), through funds obtained
under the of the syndicated loan agreement signed on October 8, 2018, and US$
100 million with own funds, as a mandatory pre-cancellation
condition agreed upon in the terms of the Original Loan. Moreover,
in November 2018, the funds obtained
from the loan with Deutsche Bank for US$ 300
million were used to prepay the Original Loan. Finally, on
February 11, 2019 Telecom Argentina
canceled the final amount outstanding under the Original Loan for
US$ 100 million with its own
funds.
Loan agreement with the International Finance Corporation
(IFC)
On March 4, 2019, Telecom Argentina entered into a loan
agreement with the International Finance Corporation ("IFC"), for a
total amount of up to US$ 450
million, as requested by the Company in one or more
disbursements (the "Loan"). The proceeds from the loan will be used
by the Company to finance capital investments for 2019.
The Loan will consist of a tranche "A" ("Tranche A"), tranche
"B-1" ("Tranche B-1"), tranche "B-2" ("Tranche B-2"), tranche "B-3"
("Tranche B-3") and tranche "B-4" ("Tranche B-4"). In addition, the
amounts disbursed under the Loan will mature in August 2023, in the case of Tranche B-1 and
Tranche B-3, or in August 2024, in
the case of Tranche A, Tranche B-2 and Tranche B-4.
Finally, the aforementioned financing was approved by the
Company's Board of Directors during its meeting held on
March 1, 2019.
Destination of Retained Earnings
Regarding the destination of the Retained Earnings, according to
Section 27, Chapter II of Title II of the CNV Rules, (N.T 2013),
Shareholders' Meetings of Companies that exhibit cumulative
positive results in their annual financial statements not subject
to restrictions for its distribution, should adopt an express
resolution regarding its allocation to either one or a combination
of the following: cash dividend distribution, share capitalization
or creation of reserves, where it should be specifically foreseen
in the Agenda of the Shareholders' Meeting that deals with the
treatment of the distributable earnings.
In relation of the aforementioned, the Board of Directors
proposes:
|
In
Pesos
|
Retained Earnings
as of December 31, 2018
|
26,918,365,656
|
To Legal
Reserve
|
(265,906,251)
|
To Cash
Dividends
|
(6,300,000,000)
|
To Facultative
reserve for future cash dividends
|
(6,300,000,000)
|
To Facultative
reserve to maintain the level of investments in capital assets and
the current level of solvency of the Company
|
(14,052,459,405)
|
To New Fiscal
Year
|
---------
|
Regarding this proposal, it should be taken into account that
since the enactment of General Resolution CNV No. 777/2018
(published in the Official Gazette on December 28, 2018), the re-expression method for
the financial statements in homogenous currency is applicable for
issuer companies, as established by the International Accounting
Standard No. 29 (IAS 29).
Regarding the distribution of earnings, the aforementioned CNV
General Resolution No. 777/2018, established that "The
distribution of earnings must be treated in the currency of the
date of the Shareholders' Meeting by means of the price index
corresponding to the month prior to their meeting." (section
3, item 1, subsection e), Chapter III, Title IV of the CNV RULES
(NT 2013),"Expression in constant currency of the earnings
distributions").
Therefore, it should be noted that this proposal of distribution
of earnings corresponds to figures in constant currency as of
December 31, 2018, leaving to the
resolution of the Shareholders' Meeting the determination of the
amount that can be distributed.
In addition, the Board of Directors proposes i) that the cash
dividends be made available to shareholders in three (3) equal
installments, being payable the first installment within thirty
(30) calendar days of their approval by the Shareholders' Meeting,
and the second and third installments within ninety (90) and one
hundred and eighty (180) consecutive days of their approval by the
Shareholders' Meeting, respectively, or on the previous date
determined by the Board of Directors; ii) that powers be delegated
into the Board of Directors of the Company so that, depending on
the evolution of the business, it may order the withdrawal, totally
or partially, in one or more times, of an amount of up to P$
6,300,000,000 from the "Facultative reserve for future cash
dividends" and its distribution to shareholders as cash dividends,
being these delegated powers able to be exercised until
December 31, 2019.
Telecom Argentina is the parent
company of a leading telecommunications group in Argentina, where it offers, either itself or
through its controlled subsidiaries local and long distance
fixed-line telephony, cellular, data transmission, and pay TV and
Internet services, among other services. Additionally, Telecom
Argentina offers cellular services in Paraguay and pay TV services in Uruguay. The Company commenced operations on
November 8, 1990, upon the Argentine
government's transfer of the telecommunications system in the
northern region of Argentina.
As of March 7, 2019, Telecom
Argentina has 2,168,909,384 shares issued and 2,153,688,011 shares
outstanding.
For more information, please contact Investor Relations:
Solange Barthe
Dennin
(5411) 4968
3752
|
Luis F. Rial
Ubago
(5411) 4968
3718
|
Nahuel
Monsalvo
(5411) 4698
4448
|
|
Voice Mail: (5411) 4968 3628
Fax: (5411) 4968 3616
E-mail: relinver@teco.com.ar
For information about Telecom Argentina's services, visit:
www.telecom.com.ar
www.personal.com.ar
www.personal.com.py
www.arnet.com.ar
www.cablevisionfibertel.com.ar
Disclaimer
This document may contain statements that could constitute
forward-looking statements, including, but not limited to, the
Company's expectations for its future performance, revenues,
income, earnings per share, capital expenditures, dividends,
liquidity and capital structure; the effects of its debt
restructuring process; the impact of emergency laws enacted by the
Argentine Government; and the impact of rate changes and
competition on the Company's future financial performance.
Forward-looking statements may be identified by words such as
'believes,' 'expects,' 'anticipates,' 'projects,' 'intends,'
'should,' 'seeks,' 'estimates,' 'future' or other similar
expressions. Forward-looking statements involve risks and
uncertainties that could significantly affect the Company's
expected results. The risks and uncertainties include, but are not
limited to, the impact of emergency laws enacted by the Argentine
government that have resulted in the repeal of Argentina's Convertibility law, devaluation of
the peso, various changes in restrictions on the ability to
exchange pesos into foreign currencies, and currency transfer
policy generally, the 'pesification' of tariffs charged for public
services, the elimination of indexes to adjust rates charged for
public services and the Executive branch announcement to
renegotiate the terms of the concessions granted to public service
providers, including Telecom. Due to extensive changes in laws and
economic and business conditions in Argentina, it is difficult to predict the
impact of these changes on the Company's financial condition. Other
factors may include, but are not limited to, the evolution of the
economy in Argentina, growing
inflationary pressure and evolution in consumer spending and the
outcome of certain legal proceedings. Readers are cautioned not to
place undue reliance on forward-looking statements, which
speak only as the date of this document. The Company
undertakes no obligation to release publicly the results of any
revisions to forward-looking statements which may be made to
reflect events and circumstances after the date of this press
release, including, without limitation, changes in the Company's
business or to reflect the occurrence of unanticipated events.
Readers are encouraged to consult the Company's Annual Report on
Form 20-F, as well as periodic filings made on Form 6-K, which are
filed with or furnished to the United States Securities and
Exchange Commission for further information concerning risks and
uncertainties faced by Telecom.
Contacts:|
Solange Barthe Dennin
(54 11) 4968-3752
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SOURCE Telecom Argentina S.A.