Cesar Medina: Thank you.
Daniel Hajj Aboumrad: Thank you.
Operator: Thank you. Our next question is from Andreas [indiscernible] from BTG. Andreas, please go ahead. Your line is open.
Unidentified Analyst: Hello, thank you for taking my question. I would like to ask question related to margins in Mexico. Last year, we saw good expansions across the year and this year has been quite volatile in the first quarter, posting a margin — quite a large margin contraction and happening again this quarter. So what’s your view on the level of — sustainable level of margins in Mexico going forward? That will be my first question. Thank you.
Carlos Garcia Moreno: We’re checking a little bit. I mean, I have here the — I have the adjusted margins I think, but maybe you have to look at the adjusted margins because we have done from time to time some tower sales. So that has had an impact on the margin. So if you look at adjusted margins in 3Q ’22 where it was 41.0%. In second quarter of ’23, it was 40.9%. And we did have a reduction from 40.9% to 40.0% in this quarter. But they’ve been — I don’t see a lot of volatility. I think margins have stayed in the 40% to 41% range, adjusted margin for the last five quarters.
Daniel Hajj Aboumrad: Yeah. And the growth is 5.9%, second quarter 5.1% and this quarter 3.6%. So, it’s more or less the growth is there and it’s not — I don’t think it’s volatile. It’s more or less following the increase on revenues.
Unidentified Analyst: Understood. And what should we think going forward given the possible increase in minimum wages or gain of 20% on your labor costs and the possibility to see the labor week to reduce by one day. How should we — could we — could this impact the operations in Mexico?
Daniel Hajj Aboumrad: Well, we already have that increase at the beginning of the year. So it’s part of the cost that we’re having. And as I told you, we have been focusing a lot on taking care about the cost to have a very good cost control in all the operations. So it’s not only in Mexico, the increase in salaries. It’s all around Latin America. And we’re focusing on that being more efficient, being more digital. I see this number, I think, in America Movil in ’19 — in 12/19, we have 190 — let me tell you, we have 94,000 people, in ’20 186,000, in ’21 181,000, in ’22 178,000 and in August we have 176,000 people. So the reduction — we are not hiring people. We’re being more efficient and we’re training more our people. So all of that is giving us that control of the costs. So the reduction and retraining the people is being for the last four years.
Carlos Garcia Moreno: And I’d just like to stress again that regarding Mexico and sometimes other countries. It’s important to normalize from the effect of extraordinary things like the sales towers, okay, because they have been important in Mexico over last year. They’ve been important this year. And I think you have to correct for that, because of — that the volatility in the margins you’re referring to has to do with the tower.
Unidentified Analyst: Understood. Thank you very much.
Daniel Hajj Aboumrad: Thank you.
Operator: Thank you. Our next question is from Alejandro Azar from GBM. Alejandro, please go ahead. Your line is open.
Alejandro Azar: Hi. Good morning, Daniel, Carlos. I’m sorry I joined a little bit late, but I was wondering if you guys mentioned something about the Verizon earnout that I believed the deadline was September of this year. Could you give us some color on that if it’s possible? Thank you.
Carlos Garcia Moreno: Hello. We did get a payment for the earnout. It was MXN3.5 billion — MXN3.3 billion in the quarter. It’s part of the MXN5.5 billion that we mentioned here in the cash flow. There was a slide there that we will be happy to provide you the slide.
Alejandro Azar: Thank you.
Carlos Garcia Moreno: We mentioned in the free cash flow
Alejandro Azar: Thank you.
Carlos Garcia Moreno: Thank you.
Operator: Thank you. Our next question is from Phani Kanumuri from HSBC. Phani, please go ahead. Your line is open.
Phani Kanumuri: Thanks everyone for taking my question. My first question is on Brazil. It seems that you’re growing very well in Brazil and the ARPU is up nearly 12%.
Daniel Hajj Aboumrad: We don’t hear — can you speak a little bit louder, we can’t hear you, please. Yes, a little bit louder.
Phani Kanumuri: Can you hear me now?
Daniel Hajj Aboumrad: Yes.
Phani Kanumuri: Okay. My first question is regarding Brazil. It seems that you’re doing really well in Brazil and your mobile ARPU is up nearly 12% year-on-year in the third quarter. Is it driven more by price increases or more by volume increases? And how do you expect this trend to go going forward? That’s my first question.
