Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Empresa Nacional de Telecomunicaciones SA (XSGO:ENTEL, Financial) maintained its leadership in Chile across major mobile metrics, including market share and revenue share.
- The company successfully launched neutral fiber optic networks in Chile, showing promising results and expected continued growth.
- ENTEL delivered its 5G network ahead of the regulatory timeline, holding the largest market share for this connection type.
- The partnership with Starlink positions ENTEL as a key player in Latin America, being one of only seven operators worldwide with such an agreement.
- ENTEL was recognized as one of the most honored companies in the 2024 Institutional Investor Ranking, highlighting its performance in management and corporate governance.
Negative Points
- Economic growth in Chile and Peru has been modest, presenting challenges for the company.
- The exchange rate in Chile has been highly volatile, impacting financial stability.
- Despite a strong year, the company's stock price without dividends saw a negative change of 8.4% in December 2024.
- Net profit decreased by 24% compared to the previous year, influenced by exchange rate impacts and higher taxes.
- The company faces intense competition in the mobile sector, which could affect future growth and profitability.
Q & A Highlights
Q: Why did Cernak request to initiate a voluntary collective process with you, and what is the potential impact to Entel in terms of compensation? Do you believe you have a strong case in your defense?
A: The voluntary collective procedure was agreed upon with SAC and relates to the communication of a tariff increase from previous years. We believe we have a strong case as we followed all legal procedures and communicated with our customers through various means. We are currently in the process of collecting data to prove our compliance, and we do not foresee any significant impact in terms of provisions.
Q: What is going to be the strategy to grow in fiber to the home in Peru following the failure of the KKR Telefonica deal?
A: We are exploring different alternatives to grow in Peru's fiber market. The issue with KKR did not postpone our growth plans. We plan to start deploying our network by the end of 2025, and there are a couple of alternatives to replace the KKR deal.
Q: Do you expect more intense competition once one emerges from Chapter 11?
A: We could see some level of increased competition, but not to the extent seen before. The market might stabilize post-Chapter 11, leading to a more steady competitive environment in the future.
Q: Can you discuss plans for the 2026 bond maturity? Do you expect to come back to the bond market this year?
A: We are currently working on plans for the 2026 bond maturity and might do something in 2025. We are considering both international and local market options and will likely take action by June 2025.
Q: Could you give us more color on why wholesale revenues decreased so sharply during the last two quarters?
A: The decrease in wholesale revenues in 2024 is considered extraordinary and is expected to revert to 2023 levels in 2025. This was mainly due to certain provisions and contract shutdowns, which will be recouped in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
