Earnings Call: Q3 2019

Nov 12, 2019

Good morning. On behalf of Telecom Argentina, I would like to thank everybody for participating on this conference call. The participants of today's conference call are Carlos Montini, Chief Executive Officer, Provato Nobile, Deputy General Director Brillianti, Chief Financial Officer and myself, Alliance Vice President and Manager of Investor Relations. The purpose of this call to share with you the result of the 9 months period ended September 30, 2019. We would like to remind all those that have not received our press release or presentation that can call our Investor Relations office to request the documents or download them for the Investor Relations section of our website located at www. Telecom.com. Ar. Additionally, this conference call and slide presentation is being broadcasted to the webcast feature available in such section and can also be replaced with this same channel. Before we continue with the conference call, I would like to go over some, say, harbor information and other details of the call as we're initially doing this type of incident. We would like to clarify that during the conference call and session, we may produce certain forward looking statements about Telecom's future performance, plans, strategies, and targets. Such statements are subject to uncertainties that could cause Telecom's ALCAR Residence operation to differ materially. Such uncertainties include, but are not limited to, the effect of ongoing industry and economic regulation, possible changes in the demand for telecoms products and services, and the effect of more general factor such changes in general market or economic condition, in legislation or in regulation. Our press release dated November 7, 2019, A copy of which was included in a Form 6K report furnished to the SEC, despite certain factors that may affect any forward looking statements that we may produce during this session. As far as the figures including the financial statements, the company has for the effect on inflation adjustment adopted by resolution, 777,000,000 in 20.18 of the Commission of Cenote Valores on CND, We established that the re expression will be applied to the annual financial statements for intermediate and special periods ended as of December 31, 2018 include 3. Accordingly, the reported figures correspond to 9 9, 2019, include the effect of the adoption of inflationary accounting in accordance with last 29. Moreover, over this presentation, we will discuss figures in historical values in order to ease the understanding and analysis of the earning evolution by user in a similar way as analyzed by the management of the company with the aim of reaching a better comprehension of this figure and memorandum terms. Additionally, I will be able to reach a better understanding of the figure presented on our press release. We encourage our financial community to consider such release in conjunction with the earnings presentation. We now analysts and investors are aware of the difficulties concerning the impact of inflation accounting standard, but we are confident that at the end of the day, it's not a driver of value other than a derivative effect like Faxanderson Stortionment taxes. Furthermore, we urge the audience of this conference call to where the disclaimer clause contains like 1 and 2 of the presentation. The agenda for today's conference call has been in slide 3. He's trying to to go over general macro overview which will be followed by the discussion of our business highlights and immediately after we will go into the evolution of our financial statements. Afterwards, we will end the call with a Q And A session as its customary and our quarterly calls with the financial community. Having gone through this procedural matters, I would like to pass the call to Carlos Montini who would like to say some words. Thank you so much, and hello to you all. And you are still here once again. As was publicly announced, I will see my duty as Chief Executive Officer of the Ghana and team at the end of this year to assume new responsibilities in the company. As you know, I was related to the member of the board and the Cbd community as soon as I see as a CEO, a CEO. It has been 2 excellent years, with great advances in the strategic plan that we promoted from the beginning. To later recognize a lot in its situation with Paris Young. It's a convergent company. We fixed mobile network. I agree in coverage and capacity, we have the very good recovery of our NPS. And day by day, we roll in market share. Our IT plan is soon to show its capabilities and the Couture transformation plan every day advanced more and more. Seeking to share the idea of a new company. It has been a prize to be the CEO of Telecom, and it will be a huge commitment collaborate with the company for my new position. I really thank you to you for the support and the useful insight and comments that I received from you all in the past month. I hand over my duty as CEO to the left or no delay we work together for more than 15 years, transforming the this industry. He has a blow experience and capacity in operation management of the company. And he has been serving as the beauty director general of telecom, Argentina, and PV COO of the company. Now let me pass the call to Roberto who will introduce himself. Hi, everyone. Thank you Carlos and hello to everyone. We've been working with Carlos for almost 15 years, as you mentioned, more than 15 years. We we have been able to make this company grow and and be what it is today. And, I believe that we will keep the track of making the company bigger, bigger year after year, with consistent numbers. And going forward with our market shares, NPS and all the several, projects that we are dealing with. Since the merge of the network, BSS transformation, OSS transformation, and all the project that are transforming the company into the new company, the one we really think of, and we envision. And with with that in mind, we will keep on working as we've been doing, for the last 2 years with Carlos. I personally will be participating on, on a regular basis on the, on the conference calls. So, we will I hope we can be in touch, periodically. Now having gone through this introduction, let me pass to the call to Gabriel Blasi, who will go over a brief characterization of the macroeconomic context in which we operate. Thank you, Roberto. Please refer to Slide 5, where we include the summary of the evolution of some macro variables in Argentina regarding FX rates inflation and monetary policy. During the third quarter of 2019, the economic scenario was mainly responsive to the political calendar. The FX markets experienced a quiet season with no disruptive developments after the primary stage. In this less volatile context described, exchange rate experienced depreciation of almost 3% during July, and the country re settled between 700 and 800 basis points. During the 1st days of August, volatility began to rise again as exchange rate appreciated another 3% and country risk raised up to almost 900 basis points. Finally, after the primary elections, financial markets experienced a sharp movement and demand for foreign currency began to accelerate quickly. In this context, the Central Bank responded back in on international research position with their interventions in the exchange markets. Finally, as the loss in reserves become greater with passing days, the authorities decide to impose capital controls in order to prevent further utilization in a context where the demand of pesos was downsizing considerably. As of the end of September, the peso experienced depreciation of almost 36% during the third quarter and the country risk reached levels above 2000 basis points. Since then, demand for foreign currency is stabilized in the FX markets only with an increased tightening imposed by the Central Bank. Amidst this scenario just described, interest rates experienced an increase in response to the greater withdrawal of deposits from the financial systems. Moreover, and after registering a downward trend up from March up to July, inflation accelerated, as it was impacted by the FX rate increase. After this renewed round of increase in inflation, it is expected that will remain high for the rest of the year, currently reaching levels below 2 54%. Turning to Slide 6, we summarize the evolution of the real economies performance, in particular, the aggregate activity and the private consumption. In order to describe certain economic trends that impact our businesses. According to last available data, The economic activity was reaching a turning point as of as from the end of the first quarter and during the second quarter. However, after the turmoil in the financial market just described, the most probable scenario should be adopted in the economic activity. As we mentioned, that all economic sectors remain affected as of the end of the third quarter with all these specific exceptions such as agriculture. In the sense, still a high degree of uncertainty, dominates the behavior of economic variables, imposing caution when considering the future evolution of activity. As far as unemployment is concerned, it can be known that the lower economic activity has taken its toll over employment. As an employment has currently rising to levels above 10%. Of course, the evolution of employment should be very linked to the capacity of the economy to stabilize and return to growth over the long run. Finally, when observing past episodes of declining economic activity, It can be note that household consumption has decreased very rapidly during this latter recessive period. In fact, that has been the cause of consumption of dual goods, which has been notoriously impacted, not only because of the reduction in purchasing power, but also because of higher difficulties to access consumer financing. The recovery of consumption will probably be linked to the possibility of recovery in real income over which the current authorities exercised several compensation measures after the primaries and the reduction of the uncertainty of the over evolution of economic variables. In this sense, consumer confidence readings, although improving from minimum levels registered in 2019, are still well below their long term average. Notwithstanding the challenging macroeconomic context that I described, Telecom Argentina has managed to achieve growth of the top line in real terms when compared with the 2nd quarter and maintained a solid operating profitability. Having gone through this introduction of the macro environment, we will go over the business highlights section. Please refer to Slide 8 where we are putting together some of the achievements the company has reached during the third quarter of the year. During the 9 months period 2019, Telecom's revenues totaled ARS 159,700,000,000, growing 39% in current pesos although diminishing in constant currency. Please bear in mind that total revenues contain approximately ARS21.8000000000 and ARS 78.4 1,000,000,000 for the 9 1st month 2019 and 9 1st month 2019, respectively. Related to the risk pressure in terms of the current measuring unit as of September 30, 2019. As far as the EBITDA total ARS53.2 billion implying a 53.3 percent margin of our revenues, achieving a challenging economic context remaining relatively stable compared with the previous quarter. In addition, fixed voice ARPU and broadband ARPU were up more than MXN 390 67 per month, respectively. Meanwhile, pay TV ARPU reached ARS 1066 and mobile ARPU reached ARS 181. It is worth to highlight that all of these were expressed in terms of the metric measured unit as of September 30, 2019. We would like to remind you that the general index of inflation is currently substantially influenced by a full and beverage component with participation in the index, it's approximately 30%, not being this component, a significant benchmark for the company costs. As far as our subscribers, mobile subs in Argentina amount to 19,900,000 of which 13,400,000 were 4G clients. Pay TV subs, so total 3,500,000 Fixed broadband subs amounted to 4,100,000 and fixed voice lines come to 3,200,000. In relation to the total customer base, it is important to remark that the all mobile broadband and cable TV segment, the total number of subscribers increased when compared to the previous quarter, following with the trend observed in the second quarter of the year. The increase is mainly explained by the set of actions, which are change of products, bundling and upselling, allowing us to increase the weight of valued customers as identifying the company leadership in mobile portability in broadband and video platforms. This is a very important achievement for the company as a higher client base will be the driver for revenue growth once the inflation has started to decelerate and price increases performed being to allow in a recovery in real terms. As a result, the company increased the share of value customers and convergent clients that we'd allow to maximize ARPU in the future once the discounts and promotions start to expire. And when the economic context improve, let's increase of household consumption. He should be reminded that during September, the company was able to reach revenues at a similar rate than year over year inflation, thanks to a greater demand for higher value services and the full effect of price adjustment. This has been achieved in a highly volatile context, while nevertheless the significant devaluation of the currency and its effect of prices the consumption allocation to telecommunication services remains stable. On the other hand, regarding corporate matters, in September 2019, Nupio, Socionima acquired 2011,848 Series B shares representing 30% of the capital stock, to a Paraguay, thus reaching a participation of 99.99%. Additionally, it is important to mention that the board of directors authorized a 3rd cash dividend distribution of $600,000,000 on October 10, which were made available to the use of cash resources driven by the company's early operative generation. This dividend payment represented an amount of approximately USD 0.14 per share. Finally, The General Extraordinary Shareholders Meeting held on October 24, 2019 approved the corporate organization acquired by Telecom Argentina, a surviving company merges with coverage with Pirasate, working in Malaysia and the splitter void asset of Penn. Before going in details to the evolution of the performance of our businesses, we would like to invite in Slide 9 to a quick review of some of our initiatives and projects that we are working on with the aim of to transform the company capabilities in order to become a leading digital telco. In this sense, we may find 4 cornerstones, which we are basing our initiatives. A fund is one of the company biggest project includes an entire PSS transformation. This project foresees the integration of the different products and into a friendly CRM with the user, which will allow us to enhance the digital experience of our customers. One of the main challenges to centralize all the catalogs into 1, to generate a simplified view of our customers that allows us to respond in a personalized way to our client requirements. In the sense, where the steps have been achieved. For example, the number of processes has been reduced notoriously. The customer display screens went from 20 to just 2 and all the actions we refer to client changes were unified into a unique process. Moreover, the training time of employees were reduced in more than 4 times. Switch is a project that since the integration of all the self management digital channels of the clients. The advances in this aspect have been notorious. Since today, they are only two channels, while in the past, they were about 20. The e commerce solutions have been unified into 1 and the number of catalogs have been reduced in more than half. The final objective is to create an Agile model that improves the customer digital periods. Moreover, improve our company processes and back office, we are carrying out another ambitious project denominated for us based on unification of different corporate systems and the digital office concept. We are extending the standardization of different processes across the structure. The digitalization of internal documentation and unification of the diverse applications assistance in order to reduce operational time and generate cost savings. Finally, as far as the OSS project is concerned, we are aiming to improve the workforce management of our fields with platform certification, which allows to simplify the processes with new functionalities and unified visualization. Having gone through this brief description of some of the projects we are working on, let us move to the performance of our businesses. Please turn to Slide 10. Well, here we can see the evolution of our service revenues, which services have grown the most. We can see that in the last three months, service revenues growth has taken an accelerated pace, which is related to incremental usage and price adjustment. Additionally, we can observe the breakdown of our revenues where mobile services businesses still holds the main participations our telecom revenues followed by broadband and pay TV. We can highlight that the current revenue mix as a participation of mobile revenues above 34%, followed by broadband revenues that represented near 33 and afterwards by pay TV revenues. Which accounted for almost 21% participation. In turn, fixed telephone and data represented almost 16% increasing its participation, while devices achieved more than 6% of the total revenues, still strongly impacted by default in consumption of durable goods due to the economic context and high interest rate but still with a positive margin contribution. As we already mentioned, mobile and broadband at the segment but mostly contribute to the total revenues composition, generating revenues for ARS 54,800,000,000 and ARS 35,900,000,000, respectively. In addition, the pay TV revenues totaled almost ARS3.4 billion followed by fixed and data revenues with the aggregate amount of almost ARS 35,000,000,000. To a lesser extent, we can highlight the contribution of handsets and others with ARS 10,100,000,000 and COP 500,000,000 respectively. It will be observed that in general terms, that although the company's revenues are growing at the faster rate. We're looking at historical values during this 9 months period of the acceleration in inflationary context during the last 12 months. As discussed in our macro chapter has posed a challenge. This is basically reflected in the fear of respect for inflation. Understanding, we would like to remark that during the third quarter, revenue showed an increase in real terms compared with the previous quarter. We will go with some details on these following slides. Let's move to Slide 11 to review the evolution of the company's mobile businesses in Argentina. As the intensity and data usage continues to increase, we can observe that there has been also a sustained growth in postpaid subscribers. Which will present our high value mobile segment. In fact, this segment has been growing steadily over the last 9 months, due to good results in the convergent offer to cable TV and internet subscribers that were no mobile clients of the company. That's leading the mobile flow share in the market. Additionally, the company has been successfully outstanding the top notch mobile prepaid customers to postpaid, which also implies getting them accustomed to regular billing with a view to perform cross selling initiatives later on. As we're standing, during the third quarter, we registered a significant increase in our prepaid customer base, which explains why the composition in percentage reposted and prepaid subscribers remain the same. During the 1st 9 months of 2019, postpaid subscribers accounted for 40% of the total customer base, up of 38% compared with the same period in 2018. Moreover, the company as registered a positive subscriber inflow in the last quarters, which reflects its effort to optimize the quality and capacity of the mobile network. Regarding mobile app. Currently, it's been impacted by promotions, giving to incentive the capture of the clients but it should begin to grow substantially once the 12 month period this promotion expire. Furthermore, intensity of mobile internet usage continues to increase, which as of the 1st 9 months of 2019 has reached an average of more than 3.3 gigabytes per use of per month that represented 27 percent increase versus 1st 9 months of 2018. What we focused in the evolution of our 4G rollout we can highlight that there has been an important inclusion of 4 g subscribers, which totals 13,400,000 as of September 2019. This rapid growth in subscriber that use the forging network has been the driver of increasing data traffic 2015. Currently, the coverage of our Porji network reached more than 1670 locations an increase of around 40 locations quarter over quarter. Moreover, personnel's 4 g network is the fastest network in the country according to the result of international reference, who measured the network standards, those experience of the customers worldwide. Turning to Slide 12, we describe the performance of our internet at pay TV services segments, which aim to differentiate asking through an enhanced customer experience. Related to our broadband segment, we can point out that the number of subscribers grew almost 11,000 year over year, achieved 44 4,400,000 users. Sorry. The aforementioned increase in subscribers was supported by the offer of higher connection speed, as a consequence, subscribers with a speed equal or about 20 megabytes have increased to 58% of the total car client base versus 34% over a year ago. ARPU expressed in terms of measuring units as of September 30, 2019, for broadband services reaching more than MXN 9.67 per month. Price adjustments apply on average broadband plans compared with those as of the 1st 9 months of 2019, contributed to offset the ARPU decrease in real terms. It should also be note that fixed products are during the positive positive mobile portability related to the discount performance to increase the bundling of services. As far as the churn is concerned. It has increased significantly to 1.5% compared with the same period of last year. The company has assumed cases of change of address and our technology for turn calculation purposes, as in fact, those subscribers remain acting the client base. Data for previous periods has been restated accordingly with this criteria. Focusing on pay TV services during the 1st 9 months of 2019, cable TV subscribers remained stable. Showing a second consecutive increase quarter over quarter. Furthermore, Flowbox is achieved 800 and C P71,000, almost starting from years observed over a year ago. Due to the last 9 months flow through its flow app version has continued to expand its penetration in areas where personnel has a great presence that is in the northern region of the country. This has allowed an increasing capture of cable TV subscribers in regions in which the company reaches. So it's XDSL and FTTHL network. In fact, This nets has explained an important portion of total cable TV capture as of September, contributing additional to sustained ARPU growth. Finally, cable TV ARPU expressed in terms of the measuring unit as of September 30, 2019, reached more than 1066 pesos per month in the 1st 9 months of 2019, while churn increased slightly 1.3% year over year, remaining at same level of the previous quarter. Having gone through the business highlights, now I will pass the call to Solange, who will go over our financial performance. Thank you, Raul. We will go over the impact that this business plan is just required by the company generated over our operating income. Let's move to Slide 14 where we can analyze the consolidated revenues and EBITDA. For the 9 months period of 20 18, consolidated revenues from current terms grew by 39%, reaching almost 137,900,000 pesos. When comparing in constant national unit terms, revenues amounted to almost $159,700,000,000 showing a decrease of 10% in real terms, reducing the gap with inflation in around 200 basis points when compared with the 1st 6 months of the The company has been increasing its effort on upsetting the high inflation effects over the top line and cost. Also, ma'am, mentioned that adjusted figures contain the effect of year over year inflation as of September 30, 2019, with reaches 53.7%. It is important to highlight this impact when performing an analysis of the company's operational performance Ut inflation adjustment has a considerable impact in terms of the reexversion of 2018 figures. In this sense, we are in the third quarter of 2019, the company was able to increase its revenues at a faster rate than the level of inflation, achieving a real increase in revenue quarter over quarter. In turn, service revenues grew even more, reaching a 41% increase, thanks mainly to a better performance of Internet 6 telephony and data service revenues. It can also be note that mobile revenues are accelerating, reaching a nominal growth of almost 27% when comparing quarterly figures of third quarter 2019 third quarter of 2018. Furthermore, price increases performed in May September had an important effect on the aforementioned inflation gap reduction. Moreover, EBITDA experienced lower growth growing by 34% year on year in current terms the EBITDA margins increased to 34.1%. The EBITDA during the period, a decrease of 14% improved almost 3 100 basis points compared with the 1st 6 months of the year. While EBITDA margin, your real terms was 33.2% remained stable compared with the 1st 6 months the year. The margin decrease in the year over year comparison was mainly due to the temporary effect and one off related to the margins of that impacted the EBITDA of the 1st 9 months of 2018. In fact, operating costs before the decision and amount station decreased 8% in real terms versus the same period of 2018. Please refer to Slide 15 where we show the performance of the VVA and the behavior of the different components of revenues and costs. As a candid remark from the previously mentioned reductions operated operating costs in real terms. It is noted as a total of lease that most of the component evolved positively despite a challenging economic culture indicated in most of the cases, improvements of our synergies. Which will also be observed that the dynamic of cost adjustment is in many cases different over time than that of the increase in revenues. We can observe a positive evolution of handset cost with a positive margin contribution, which was mainly affected by a lower salar due to the increasing consumption of durable goods, register, and at aggregate level in the economy, and also cost management has delivered good result, commission, and advertising to lower charges for agent commission as a consequence of the same channels of organization. On the other hand, other costs register a decrease mainly as a reduction in operating leases, was implemented due to the application of IFRS 16. This effect has been partially offset by a lower decrease in labor costs, as a less decrease in recurrent labor costs as a result of the lower number of federal employees, as well as increases in salaries to unionize and earn access relief. Was partially offset by nonrecurring labor costs. In the case of bad debt expenses, increased year over year but show a better evolution when analyzing quarter over quarter figures. The final outcome 160 basis point reduction in EBITDA in real terms when compared with the 9 months period of 2018. With, as we mentioned, reduced federal savings and 1 off in commission and advertising and labor costs. Let's move on to Slide 16, where we can verify that the company's current operating operating income totaled almost ARS44.4 billion The decrease in both commercial and unit that resulted higher than that of EBITDA can be explained by the increase in the position and amortization and disposal of an environment of PP and E intangibles or right of use. Which increased almost 15% of real terms year on year. In addition to higher depreciation and amortization due to the expression of nonmonetary assets, the application of IFRS 16 since 2019 has been cale impact of more than ARS 2,100,000,000, mainly because of the aforementioned increase in depreciation and amortization in real terms, operating margins reached 9% of consolidated earnings. Moreover, the company released an ordinary loss before the impact of MXN 165,000,000 in 9 months 2019, improving 99.3% versus of same period last year, mainly reflecting lower net losses from FX results, measured in real terms. As we observe, the final results performance over the 1st 9 months of 2019 We can verify that the company has reduced the lower negative FX results measured in real terms in 9 months 2019 for ARS8.8 billion due to the presentation of the Argentine peso against the U. S. Dollar of 63% versus an inflation of 38% during the same period. While negative FX results, measures and returns were registered in 9 months 2018 for 56,700,000,000 related to the presentation of the Argentine peso against the U. S. Dollar of 121 percent versus an inflation of 32 in the same period. This cash was studied in lower FX losses for more than ARS 47,800,000,000 partially offset by higher negative net interest and lower risk sum of ARS 4,800,000,000, down from ARS 8,400,000,000 compared with the previous year. Meanwhile, the company reduced our net loss attributable to the controlling company of ARS 12,700,000,000 with the period, essentially due to recognition of the risk payment by inflation for the calculation of income tax. Please turn to Slide 17 where we can highlight the company's continuous investment efforts to improve the network and quality of services. During the 1st 9 months of 2019, Telecom has invested more than ARS 46.9 billion, being this amount 4% higher real terms than the same period last year. The consolidated amount of capital expenditure increased to 28% of total revenues from the 20 for registering the same period last year. Thank you to account the chemical CapEx breakdown, an important amount of the chemical CapEx was allocated to the network and technology. Being the access network, 1 of the most important components, represented all the 5% of network and technology CapEx. The remaining of technical CapEx was mainly comprised of installation and customer premise equipment and of investment done over our international operations in Paraguay and Uruguay. It is worth to highlight that during the 1st 9 months of 2019, Telecom continued working in the improvement of mobile network deploying more than 300 new sites. Additionally, around 50 sites were upgraded to new technologies, respect to no more than 450 sites was increased, another 1850 sites were refined to 4 digit technology. On the fixed network side, intensive work has been performed over the HFC network and in new one dealer capacity to the network footprint and enable new DOCSIS 3.1 counters. Finally, The IP technology product was enabled in the amber and La Pla diarrhea with the objective of facilitating the converters and broader migration of the corporate network. Concluding and as a remark, previously, in our calls, conference call session. One of the advantages of the company's CapEx plan is that the investments are performed in a very modular way. They are not huge projects involving large log of investments. In this sense, the company has the ability to react to changes in the economy context avoiding to harm its operational performance, competitiveness, or its casting operations capacity. In fact, the maintenance covers for the company is around $300,000,000, meaning that taking a conservative approach, the return for additional investment of this Rafold is significant and will generate important improvement over the long term EBITDA. Let's move to slide 18 where we can find a summary of our international operations in Paraguay. Currently, nuclear's operation are focused on the deployment of HIT's fiber optic network in the biggest city of Paraguay. The promotion of the use of mobile financial services in the country and the transformation of the satellite TV service with higher competitive products. In defense, Telecom business in Paraguay keeps growing Nuclear, the company's subsidiaries of our district, around $122,000,000 51 1,000,000 in revenues and EBITDA in the 9 months this year, respectively. This implies EBITDA margin of 38.8 percent, improving 320 basis points compared with the same period last year. Both and services accounted for 40% of the revenues followed by VOICE with 26% data with 15% and GDS services was 8%. As of September 13, 2019, mobile customers totaled $2,300,000, which represents a market share of 31.5%. Moreover, the clients of personalization data a mobile finance, financial service that our subsidiary provides reached 158,000, up for 100 for 9000 in the previous quarter. Finally, fixed services subscribers amounted 29,000 with a market share of 10%. The fixed network deployment in the main city of Paraguay has been increasing rapidly during 2019. Almost triple named the number of homes as of 2018. It is expected that these lines of business will continue to perform at the additional cost of this year. Additionally, Nokia's flow subscribers totaled 5,400,000 increasing 32% compared with the second quarter of 2019. Please now let me pass the call to Gabrielle who will cover the final part of our presentation that will cover the company financial management. Thank you so much. Turning to Slide 19, we present some pro form a key figures for the fiscal years of 2018 2019 in constant measuring unit. Company revenues achieved more than pesos to 113,000,000,000 for the last 12 months as of September 30, 2019. Meanwhile, EBITDA amounted almost ARS 68,700,000,000 for the same period. EBITDA margin for the last 12 months period as of September 30, 2019, was 32.2%. Regarding our gross debt, as of the end of September 30, 2019, it amounted more than ARS 146.2 billion but as the company holds an important cash and equivalents and investment position, net debt reaching approximately 1 105.4000000000, up 1% in real terms when compared with September 30, 2018. In fact, net debt to EBITDA ratio remains in level of 1.5 times. Lastly, on Slide 24, we can analyze the breakdown on the financial debt. The total debt outstanding of the company as of September 30, 2019, considering the new debt operations and cancellations in the period amounting to almost $2,500,000,000. As we mentioned in our last call, on July 18, 2019, the company successfully completed and internationally notes issuance for the total amount of CHF 400,000,000 and maturing 2026. Part of the proceeds of the issuance were allocated to their financing of liabilities in order to optimize the maturity schedule of the company. In this sense, $100,000,000 were allocated to partially prepay the term loan agreement due 2022 and $34,000,000 in total were allocated for a tender offer of which outstanding 6.5 percent Class A nodes due 2021. As we're starting, the company is always working and looking for the best opportunities to improve it capital structure and maturity schedule that recognize its solid credit metrics. As mentioned in previous calls, we do important to emphasize the manageable debt for file that the company has as well as the diversified source of funds currently available, such as vendor financing, local, international bank lines, and funding from multilateral credit agencies. The company looks for a permanent optimization for the term, rate and structure of its financial liabilities. Having concludes with the presentation. But before going to the Q And A session, let me pass the call to Solange for a final remark. Thank you, Manuel. With this, now we are more than pleased to answer any questions you may have. However, before we start, we would like to remind you the way you to correctly address your questions in the Q And A session. Remember that we should wait until we open the refer today, and then send a message to Aria Telecom Argentina to the Q And A menu, identifying yourself and stated that you have a question. We'll let you know what is your time to speak and we'll rehire you so you can proceed with your question. Hello. We are just open for any questions you may have. So please let us know if you have questions or if not, the call. We will wait for for your answer in the following Well, considering that there are no questions. So what We will thank you for participating in our conference call. I'm pleased to not hesitate in contacting our Investor Relations department for any further inquiries you may have. Good morning to all. Have a nice day, and we hope to meet you again soon.