Telecom Argentina S.A.

Telecom said first-half 2024 revenues were almost $1.83 billion in nominal terms, while revenues in constant pesos decreased 13% year over year and increased 5.6% quarter over quarter in real terms. EBITDA was $543 million equivalent in the first half, and EBITDA margin was 29.7% (or 32.2% in nominal terms), up 1.3 percentage points year over year. Net income was ARS 859 billion, helped by real exchange gains tied to U.S.-dollar debt. CapEx was approximately $246 million, about 13% to 13.5% of revenues. Management did not provide formal next-quarter or full-year financial guidance, but said July and August were tracking in line with the first half, inflation should keep easing toward a 2% floor, and margin generation should be more normalized through year-end.

Roberto Nóbile framed the quarter as evidence that Telecom’s operating model is improving despite a difficult environment. He emphasized backend modernization, more digital customer interactions, and the benefits of monthly pricing adjustments, saying the company has reduced reliance on contact centers and increased digitalization, with about 60% of contacts going through its own digital platform. He also said customers are showing less demand for promotions and that the company is preparing itself for 2025 with a focus on competitiveness and efficiency.

Gabriel Blasi highlighted the 29.7% EBITDA margin, the roughly $246 million of first-half CapEx, and the ARS 859 billion net income, which was largely driven by exchange gains from peso appreciation versus U.S.-dollar debt. He said gross debt was $2.8 billion, cash and equivalents were $411 million, and net debt was about $2.4 billion, with net debt-to-EBITDA at 2.2x as of June 2024. He also pointed to the July 2031 note issuance of $500 million at a 9.5% coupon, about $1.3 billion of total demand, and liability management actions that improved the maturity profile and reduced the total cost of debt by about 25 basis points.

Analysts focused on the apparent quarter-over-quarter margin decline, pricing flexibility, Paraguay profitability, and whether Telecom would do more liability management for 2024-2026 maturities. Management said the sequential margin pattern was influenced by seasonality, a rapidly changing inflation backdrop, and backend modernization that is lowering operating costs, while also noting margin generation should normalize later in the year. On pricing, management said the old price-cap issue was not binding for Telecom and that future pricing will depend mainly on portfolio evolution and competition, not a major regulatory change.