ANNUAL INTEGRATED REPORT 2021 slide image

ANNUAL INTEGRATED REPORT 2021

100 ANNUAL INTEGRATED REPORT 2021 | AXTEL Government segment. In 2021, revenues totaled Ps. 1,336 million, compared to Ps. 1,990 million in 2020, a 33% decrease. These results are due to the termination of contracts, a decline in acquisitions and fewer non-recurring revenues, mainly with federal entities. The Company maintains its effort to seek value-added opportunities with the federal government and further diversify into projects with state and local governments. Standard Services. In 2021, revenues amounted Ps. 595 million, a 38% decrease compared to 2020. Value Added. For 2021, revenues recorded Ps. 419 million, a 25% decrease. Digital Transformation. In 2021, revenues reached Ps. 322 million, a 31% decrease,, mainly due to a decline in managed application solutions. Gross Profit Gross profit is defined as revenues minus cost of revenues. In 2021, gross profit totaled Ps. 8,251 million, a 7% decrease, in line with revenues. Gross profit margin remained constant at 72%, from 2020 to 2021. Services Unit (Alestra). Gross profit totaled Ps. 3,650 million, a 15% decline compared to 2020, mainly due to the declines in revenues previously described for both the Enterprise and Government segments, and to the lower margin of the enterprise segment. Infrastructure Unit (Axtel Networks). Gross profit was Ps. 4,601 million, flat compared to 2020. Operating expenses and other income (expenses). For 2021, operating expenses totaled Ps. 4,426 million, a 7% decrease compared to 2020, due to a 15% decrease in the Services unit operating expenses. Services Unit (Alestra). Operating expenses declined 15% compared to 2020, mainly as a result of declines in personnel, debt provision charges and maintenance expenses. Infrastructure Unit (Axtel Networks). Expenses increased 2% compared to 2020, mainly due to an increase in tower rents, partially mitigated by reductions in real estate leases and basic services. For 2021, other expenses represented Ps. 32 million, mostly related to organizational efficiencies recorded in the fourth quarter of the year; compared to other income of Ps. 2,170 million in 2020, figure that includes a Ps. 2,021 million benefit from the data center transaction in the first quarter of 2020 and a Ps. 90 million benefit from the spectrum transaction in the second quarter of the same year. EBITDA EBITDA totaled Ps. 3,793 million, 10% lower than 2020 Comparable EBITDA. For 2021 the EBITDA margin was 33.3%, lower than the 34.1% registered in 2020, as efficiencies in operating expenses did not compensate the decline in gross profit. =
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