(Millions of Mexican pesos with purchasing power as of September, 2002) % 9 Months 9 Months % 3Q Q 2001 Increase Increase

Transcription

1 269,858 lines were added during the third quarter raising the total to 14,158,103 lines in service, an annual increase of 8.8% At the end of the second quarter, Internet access accounts increased 30.3% with an addition of 85,560 accounts totaling 1,101,618 Internet access accounts Line equivalents for data transmission increased 28.3%, totaling 1,840,750 line equivalents in operation Relevant figures (Millions of Mexican pesos with purchasing power as of September, ) 3Q 3Q 2001 Increase 2001 Increase Revenues 27,852 29,340 (5.1) 82,163 86,054 (4.5) EBITDA 14,479 16,028 (9.7) 43,292 47,116 (8.1) Operating Income 9,206 11,636 (20.9) 28,403 32,461 (12.5) Net Income 4,449 4,808 (7.5) 14,060 18,132 (22.5) Earnings per share (pesos)* (2.8) (19.8) * Outstanding shares at the end of each period Operating indicators 3Q 3Q 2001 Increase 2001 Increase Lines in service 14,158,103 13,012, Internet access accounts 1,101, , Line equivalents for data transmission 1,840,750 1,434, Total local calls (millions) 6,550 6,617 (1.0) 19,189 19,202 (0.1) Interconnection minutes (millions) 5,633 5, ,829 14, DLD minutes (millions) 3,617 3,807 (5.0) 10,616 10,727 (1.0) ILD minutes (millions) 1,304 1, ,010 3,

2 Operating results Local During the third quarter, 269,858 lines were added, 17.4% lower than the same period of the previous year and 5.7% lower than second quarter of. For the nine months, 786,524 lines were added, 16.6% lower than the same period of last year. At September 30,, total lines in service were 14,158,103, an annual increase of 8.8%. Lines with at least one digital service increased 39.4% totaling 4,065,101in the nine months, reflecting penetration of digital services of 28.7% of lines, 6.3% more than the same period of In the third quarter, total call traffic decreased 1.0% compared with the same period of last year and 2.9% higher than the second quarter of, totaling 6,550 million calls. For the nine months, total call traffic was 19,189 million, similar to the year-ago level resulting from the decline in the economic activity. Interconnection traffic rose to 5,663 million minutes, 10.9% higher than the third quarter of last year and 7.7% more than the second quarter of. For the nine months, interconnection traffic totaled 15,829 million minutes, an increase of 11.6% compared with the same period of Long distance In the third quarter, domestic long distance minutes totaled to 3,617 million, 5.0% lower than the third quarter of 2001 and 3.3% higher than the second quarter. For the nine months, domestic long distance traffic totaled 10,616 million minutes, a decrease of 1.0% compared with the same period of the previous year, resulting from the decline in the economic activity. International long distance traffic totaled 1,304 million minutes in the third quarter, 18.7% more than the same period of 2001 and 10.7% lower than the second quarter. For the nine months, International long distance traffic increased 22.8% totaling 4,010 million minutes. Lines in Service (millions) DLD minutes (millions) 3,617 3,807 3,204 2,601 2,371 ILD minutes (millions) 1,304 1,099 1,519 1, page 2

3 Data In the third quarter, 4,181 line equivalents for data transmission were added, 97.4% lower than the third quarter of 2001 as a result of a circuit consolidation process with the main telecommunications operators. For the nine months, 266,856 line equivalents were added, 39.0% lower than the same period of last year. At September 30, TELMEX had 1,840,750 line equivalents for data transmission, an annual increase of 28.3%. During the quarter, 85,560 Internet access accounts were added, 0.7% higher than the same period of last year and 187.8% higher than the second quarter. For the nine months, 188,491 Internet access accounts were added, 10.9% lower than the same period of last year. At September 30, TELMEX had 1,101,618 Internet access accounts in operation, 30.3 % more than in Line equivalents for data transmission (thousands) 1,841 1, Even though there was growth in line equivalents, the data market is very competitive and TELMEX is offering packages of products and services in order to maintain the company s position in the market. As a result, revenues generated by the data transmission business for the third quarter were 3,098 million pesos, 1.5% higher than the third quarter of 2001 and 2.5% more than the second quarter. For the nine months, data transmission revenues totaled 8,972 million pesos, 1.8% higher than the same period of the previous year. In the end of the third quarter, the data business contributed 11.1% of TELMEX s total revenues and 10.9% in the nine months. Internet access accounts (thousands) 1, page 3

4 TELMEX financial results In the third quarter, total revenues decreased 5.1% compared with the previous year as a result of lower local, interconnection, domestic and international long distance traffic growth rhythm and the reduction of rates in real terms. For the nine months, the decrease was 4.5% compared with the same period of Operating costs and expenses increased 5.3% compared with last year s third quarter and for the nine months they increased 0.3%. If costs related with interconnection and depreciation were put aside, costs would show a decrease of 2.4% in the third quarter and 3.0% in the nine months. This is the result of a reduction in cost of sales and services of 0.4% in the third quarter an increase of 0.1% for the nine months. Commercial, administrative and general expenses decreased 5.3% compared with the same period of last year and for the nine months, they decreased 7.5%. In the third quarter, EBITDA totaled 14,479 million pesos, a decrease of 9.7% and operating income was 9,206 million pesos, a decrease of 20.9%. For the nine months, EBITDA decreased 8.1% and operating income decreased 12.5%, totaling 43,292 million pesos and 28,403 million pesos, respectively. offset losses related to $5.645 billion dollars of foreign-denominated debt. At the end of the quarter, hedges were billion dollars. During the third quarter, comprehensive financing cost had a charge of 1,551 million pesos, resulting from an exchange loss of 896 million pesos and a net interest charge of 1,312 million pesos. The exchange loss was mainly due to the fluctuation of the peso against the dollar, partially offset by hedges made by the company. A gain of 657 million pesos was generated in the monetary position during the quarter. For the nine months, comprehensive financing cost rose to 5,579 million pesos. Net income for the third quarter was 4,449 million pesos, 7.5% lower than the same period of last year. For the nine months, net income decreased 22.5% compared with the same period of the previous year totaling 14,060 million pesos. TELMEX s earnings per share for the third quarter, based on the number of shares outstanding at period end, were 0.35 pesos, 2.8% lower than the same period of the previous year, and for the nine months were 1.09 pesos, 19.8% lower than the same period of In spite of a high level of volatility in the exchange rate during the third quarter, the net impact on the value of the peso was a loss of only 20.5 Mexican cents. In light of that, the company reduced hedges by an average of approximately 2.8 billion dollars related to an exchange rate of pesos per dollar. The resulting gain of million pesos partially page 4

5 Consolidated statements of income Income statement (Millions of Mexican pesos with purchasing power as of September, ) 3Q 3Q 2001 Inc Inc. Operating revenues Local 13,216 14,109 (6.3) 39,161 41,130 (4.8) Domestic Long Distance 7,108 7,554 (5.9) 21,111 22,465 (6.0) International Long Distance 2,360 2,468 (4.4) 7,291 7,392 (1.4) Interconnection 3,892 3,903 (0.3) 11,310 11,648 (2.9) Other 1,276 1,306 (2.3) 3,290 3,419 (3.8) Total 27,852 29,340 (5.1) 82,163 86,054 (4.5) Operating costs and expenses Cost of sales and services 6,373 6,398 (0.4) 18,681 18, Commercial, administrative and general 4,083 4,311 (5.3) 11,733 12,678 (7.5) Interconnection 2,917 2, ,457 7, Depreciation and amortization 5,273 4, ,889 14, Total 18,646 17, ,760 53, Operating Income 9,206 11,636 (20.9) 28,403 32,461 (12.5) Comprehensive Financing Cost Net interest 1,312 1, ,905 3, Exchange loss (gain), net 896 2,230 (59.8) 3, (*) Monetary effect (657) (691) (4.9) (2,082) (1,810) 15.0 Total 1,551 2,586 (40.0) 5,579 1, Income before tax and employee profit sharing 7,655 9,050 (15.4) 22,824 30,535 (25.3) Provisions for income tax and employee profit sharing 3,181 4,146 (23.3) 8,620 12,050 (28.5) Income before equity in results of affiliates 4,474 4,904 (8.8) 14,204 18,485 (23.2) Equity in results of affiliates (25) (96) (74.0) (144) (353) (59.2) Net income 4,449 4,808 (7.5) 14,060 18,132 (22.5) EBITDA 14,479 16,028(9.7) 43,292 47,116 (8.1) EBITDA Margin (2.6) (2.1) Operating Margin (6.6) (3.1) (*) Percentage higher than 1,000%) page 5

6 Balance sheet (Millions of Mexican pesos with purchasing power as of September, ) September September 2001 Assets Cash and short term investments 20,644 7,525 Other current assets 22,227 26,333 Plant, property and equipment, net 117, ,909 Inventories 1,847 1,751 Other assets 1,773 3,944 Intangible assets 6,828 8,711 Total assets 170, ,173 Liabilities and Stockholders equity Current portion of long term debt 11,058 24,635 Other current liabilities 16,808 14,601 Long term debt 60,442 48,471 Labor obligations 4,996 6,890 Deferred taxes 12,980 11,996 Deferred credits 2,241 1,607 Total liabilities 108, ,200 Stockholders equity 62,130 54,973 Total liabilities and Stockholders equity 170, ,173 Shares outstanding at September 30, : 12,851,401,331 Exchange rate at September 30, : pesos per dollar page 6

7 Local service business Income statement (Millions of Mexican pesos with purchasing power as of September, ) 3Q 3Q 2001 Inc Inc. Operating revenues Access, rent and, measured service 13,119 13,917 (5.7) 39,058 40,964 (4.7) Recovery of LADA special projects ,269 1, LADA Interconnection 909 1,047 (13.2) 2,479 3,027 (18.1) Interconnection with operators ,087 (41.7) Interconnection with cellular 3,648 3,680 (0.9) 10,676 10, Other 2,088 2,337 (10.7) 5,698 5,825 (2.2) Total 20,482 21,634 (5.3) 59,814 62,710 (4.6) Operating costs and expenses Cost of sales and services 4,639 4,799 (3.3) 13,305 13,355 (0.4) Commercial, administrative and general 3,496 3,794 (7.9) 10,083 10,417 (3.2) Interconnection 2,890 2, ,341 7, Depreciation and amortization 3,507 2, ,030 10,045 (0.1) Total 14,532 14, ,759 41, Operating income 5,950 7,555 (21.2) 18,055 21,323 (15.3) EBITDA 9,457 10,439 (9.4) 28,085 31,368 (10.5) EBITDA Margin (2.1) (3.0) Operating Margin (5.9) (3.8) Comments on local service financial results The local service income statement, prepared in accordance with accounting separation principles, shows that revenues for the third quarter decreased 5.3%. The decrease in revenues was mainly due to lower dynamics in local and interconnection traffic, the reduction of interconnection rates and the depreciation of local rates in real terms. Operating costs and expenses increased 3.2% compared with the third quarter of The reduction of 3.3% in cost of sales and services and 7.9% reduction in commercial, administrative and general did not offset the effect of the increase of 21.6% in depreciation and 11.1% in interconnection costs, compared with the third quarter of EBITDA and operating income decreased 9.4% and 21.2% respectively compared with the same period of the previous year. For the nine months, EBITDA decreased 10.5% and operating income decreased 15.3%. page 7

8 Long distance business Income Statement (Millions of Mexican pesos with purchasing power as of September, ) 3Q 3Q 2001 Inc Inc. Operating revenues Domestic long distance 4,075 4,590 (11.2) 12,239 13,719 (10.8) International long distance 1,947 2,143 (9.1) 6,022 6,374 (5.5) Total 6,022 6,733 (10.6) 18,261 20,093 (9.1) Operating costs and expenses Cost of sales and services 1,159 1, ,370 3, Commercial, administrative and general 1,259 1,326 (5.1) 3,618 3,759 (3.8) Interconnection to the local network (12.7) 2,372 2,902 (18.3) Cost of LADA special projects (2.6) 1,206 1,214 (0.7) Depreciation and amortization ,827 1, Total 4,330 4, ,393 12,571 (1.4) Operating income 1,692 2,451 (31.0) 5,868 7,522 (22.0) EBITDA 2,323 2,939 (21.0) 7,695 9,186 (16.2) EBITDA Margin (5.1) (3.6) Operating Margin (8.3) (5.3) Comments on long distance financial results The long distance income statement prepared in accordance with accounting separation principles shows that long distance revenues in the third quarter decreased 10.6% compared with last year s third quarter. The decrease in revenues was due to a lower volume of domestic long distance traffic and the reduction of long distance rates in real terms. For the nine months, operating costs and expenses increased 1.1% compared with the same period of last year. This increase was mainly due to higher depreciation costs of 29.3% in the third quarter. EBITDA decreased 21.0% and operating income decreased 31.0% in the third quarter. For the nine months, EBITDA decreased 16.2%. and operating income decreased 22.0%. This press release contains forward-looking statements that involve inherent risk uncertainties. We have identified certain important factors that may cause actual results to differ materially from those contained in such forward-looking statements. Teléfonos de México, S.A. de C.V. (http// Dirección de Finanzas y Administración - Relaciones con Inversionistas Parque Vía , México, D.F. Tels. (52 55) , Fax (52 55) , ri@telmex.com page 8