Fourth Quarter 2011

Fourth Quarter 2011
Alestra S. de R.L. de C.V.
Fourth Quarter 2011
Alestra S. de R.L. de C.V.
Alestra
Telecommunications and Information Technologies
Industry Developments
The legal disputes in connection with mobile and fixed interconnection rates for 2011 and previous years
remain unresolved. Some mobile carriers, however, have demonstrated interest in negotiating new
interconnection agreements recognizing the rate determined by the Comisión Federal de
Telecomunicaciones (“Cofetel”). We believe these agreements will contribute to the termination of
existing disputes in the near term. Cofetel has hired specialized international advisors to assist in the
development of interconnection cost models to support its future tariff recommendations.
» Operations
The Company continued to expand its service portfolio which combines telecommunications and IT
services, supported by a comprehensive network of managed services, which enables us to offer
interconnection solutions to the enterprise market in Mexico. Our current portfolio includes data
warehousing, IT security and cloud applications, as well as vertical solutions for specialized industries,
such as Healthcare and Education. We also offer consulting services for the design and management of
complex IT and telecommunications projects, among others.
During 4Q11, VAS volume totaled 923,000 E0s (equivalent of customer-access circuits providing services),
a 20% year-on-year increase and a 4% when compared with previous quarter. Our long distance (LD)
network handled 373 million minutes of traffic (MMOU) during the quarter, unchanged year-on-year. On
a sequential basis, our LD network traffic increased by 6%. For FY11, MMOU were 17% lower than in
FY10.
As a result of ALFA’s acquisition of AT&T’s 49% ownership in our Company last July, since October 2011
we no longer provide AT&T Global Network Services (“AGN Services”) in México.
Financial Results
In 2011, The Company continued with its strategy to expand VAS. As a result, EBITDA for the year was U.S.
$128 million, 9% higher than in 2010, driven by an 11% increase in sales of VAS, in spite of the extinction
of AGN services in 4Q11, which impacted the quarter EBITDA in approximately U.S. $3.6 million.
The depreciation of the peso vis-à-vis U.S. dollar that took place in 4Q11 impacted quarterly results when
measured in U.S. dollars.
In 4Q11, revenues amounted to U.S. $87 million, 8% lower when compared to 4Q10 (1% increase when
measured in pesos) and 12% lower than the previous quarter. On a cumulative basis, revenues in 2011
were U.S. $379 million, 5% higher than in 2010.
Alestra- Public Use Information
Fourth Quarter 2011
Alestra S. de R.L. de C.V.
VAS revenue slightly decreased 2% when compared to 4Q10 and 12% sequentially. When measured in
pesos, VAS revenues in 4Q11 increase 7% when compared to 4Q10 and decreased 2% sequentially. The
main reason behind VAS revenue decline is the depreciation of the peso coupled with the extinction of
AGN Services, as explained above, which was partially offset by revenues from new services provided to
AT&T and the increase in domestic IT services revenues. VAS revenues for the year were U.S. $302
million, 11% higher than in 2010.
In 4Q11, Alestra recorded an extraordinary depreciation of US $13 million that affected operating income.
In preparation for the transition to International Financial Reporting Standard (“IFRS”), Alestra appointed
an external advisor to carry out the annual asset’s useful life review; which resulted in this one-time
impact due to the adjustment of the useful life of several assets.
Operating income was U.S. $0 million in the quarter, compared to an operating income of U.S. $13 million
in 4Q10. This is explained by the extraordinary assets depreciation impact in 4Q11 mentioned above. On a
cumulative basis, operating income amounted to U.S. $48 million, flat vis-à-vis 2010.
4Q11 EBITDA amounted to U.S. $28 million, 10% and 17% lower when compared to 4Q10 and 3Q11,
respectively (a decrease of 2% and 8% when measured in pesos). On a cumulative basis, 2011 EBITDA
amounted U.S. $128 million, a 9% increase when compared to 2010 and a new Company record.
» Capital Expenditures and Net Debt
4Q11’s capital expenditures amounted to U.S. $28 million, for a cumulative figure of U.S. $70 million in
2011. Funds were used mainly to deploy new IT services, to provide last mile access to connect customers
and to expand our network. At the end of 4Q11, net debt amounted to U.S. $ 161 million, a sequential
decrease of U.S. $ 7 million. Financial ratios remained strong with Net Debt to EBITDA of 1.3 times and
Interest Coverage of 4.6 times.
Alestra- Public Use Information
Fourth Quarter 2011
Alestra S. de R.L. de C.V.
Revenues
4Q11
Total Revenues
Ps. Millions
U.S. $ Millions
Data, Internet and Local Services (VAS)
Ps. Millions
U.S. $ Millions
Long Distance Services
Ps. Millions
U.S. $ Millions
Data, Internet and Local Services / Total (%)
3Q11
(%) 4Q11 vs.
4Q10 3Q11 4Q10
1,186 1,209 1,174
87
99
94
YTD'11
YTD'10 Ch.%
(2)
(12)
1
(8)
4,697
379
4,570
361
3
5
952
70
974
79
889
71
(2)
(12)
7
(2)
3,744
302
3,456
273
8
11
234
17
80
234
29
81
285
23
76
0
(10)
(18)
(25)
953
77
80
1,114
88
76
(14)
(12)
Operating Income and EBITDA
(%) 4Q11 vs.
Operating Income
Ps. Millions
U.S. $ Millions
EBITDA
Ps. Millions
U.S. $ Millions
4Q11
3Q11
4Q10
3Q11
4Q10
YTD'11
YTD'10
Ch.%
(5)
209
166
(102)
(103)
570
610
(7)
0
17
13
(100)
(100)
48
48
(1)
379
28
412
34
387
31
(8)
(17)
(2)
(10)
1,579
128
1,477
117
7
9
Alestra- Public Use Information
Fourth Quarter 2011
Alestra S. de R.L. de C.V.
Selected Balance Sheet Information & Financial Ratios (U.S. Million)
Assets
Liabilities
Stockholders’ Equity
Net Debt
Net Debt/EBITDA*
Interest Coverage*
4Q11
514
336
177
161
1.26
4.6
3Q11
526
331
195
168
1.29
4.6
4Q10
581
366
216
182
1.56
3.9
YTD'11
514
336
177
161
1.26
4.6
YTD'10
581
366
216
182
1.56
3.9
* Times. Last 12 months
Contact:
Sergio Bravo
+ (5281) 86252201
[email protected]
Rosa Vargas
+ (5281) 86252321
[email protected]
Alestra- Public Use Information