Most LatAm Telcos Have Strong Liquidity Position, Lucror Says
(Bloomberg) -- Most companies offering mobile and fixed telephony, broadband and video services in Latin America have “strong” liquidity positions and are expected to mitigate the brunt of damage from the Covid-19 downturn by cutting costs and capex, even as growth temporarily slows, Lucror Analytics analysts Sebastian Hofmeister and Soummo Mukherjee wrote in a report.
* Telecoms in the region “have generally been deemed essential by governments during pandemic-prompted lockdowns, implying a relatively muted earnings impact compared to other sectors. Pressure on Q2 and FY 2020 results will vary, with fixed-line residential (broadband, pay TV) and mobile postpaid services likely to be more resilient than B2B and prepaid mobile services”
* 10 of 14 credits reviewed by Lucror classified as “strong,” marked by their cash balances, long-dated debt maturity schedules and potentiallly neutral or positive free cash flow in 2020 after cutting costs
By Ezra Fieser