Telecom Argentina SA Q2 FY2022 earnings call

• EBITDA margin during the first half of 2022 was 30.6%.
• CapEx for the first half of 2022 was approximately $300 million.
• Cash flow generation remained solid.
• Implemented price increases for services in a challenging inflation scenario.
• Mobile subscriber base grew; FinTech personal pay reached 235,000 onboarding clients.
• Acquired OCLC Servicios SA, canceled $140 million term loan, entered new loan agreement with IFC, and paid dividends of $150 million.
• Closed auction to buy 177,000 MW of renewable energy, reducing carbon emissions by 20%.
• Postpaid subscribers increased by over 300,000 (3.9%), prepaid by almost 500,000 (4.4%).
• Broadband access was steady with a reduction in XDSL but growth in HFC and FTTH.
• Pay TV subscriber base slightly decreased, and a new ISBDT solution for Analog Pay TV was launched.
• Fixed voice saw a reduction in traditional lines but an increase in IP telephony accesses.
• Service revenues totaled ARS248 billion, down 10% in real terms compared to the first half of 2021.
• Operating costs were managed with most costs contained or decreased vs inflation except labor and bad debt.

For the first half of fiscal year 2022, Telecom Argentina's total revenues were $2.1 billion. EBITDA generation was $0.6 billion with an EBITDA margin close to 31%. Mobile subscribers in Argentina amounted to 20.1 million, an increase of over 800,000 compared to the first half of 2021, contributing 39% to total revenues. Broadband and Pay TV clients were almost constant at 4.2 million and 3.5 million respectively, with broadband revenues making up 22% of total. Pay TV revenues were 19% of total, with the subscriber base remaining almost constant with a slight decrease of 0.8%. Fixed telephone and data revenues were 30% of total, with fixed voice subscribers without IP telephony lines at 2.2 million and with IP lines almost 3.1 million. Equipment sales revenue was 6% of total. Regionally, there were 2.3 million mobile subscribers in Hawaii and 132,000 Pay TV clients in UAE. For FinTech (personal pay), onboarding clients amounted to 235,000, and prepaid card accounts were almost 113,000.

• Envisioned that local inflation would remain high during 2022.
• Expect to continue accessing local capital markets for potential financing needs.

• Effects of industry and economic regulations.
• Possible changes in demand for products and services.
• General market and economic conditions, including impact of COVID-19.
• Inflation impact on labor costs and bad debt expenses.

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