Item

1.

Telecom Argentina S.A. announces consolidated six month period (‘1H18’) and second quarter results for fiscal year 2018 (‘2Q18’)

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As of June, 30

(in million P$, except where noted)**

2018

2017

Δ $

Δ %

Consolidated Revenues

64,179

49,705

14,474

29.1%

Operating Income before D&A

23,296

17,048

6,248

36.6%

Operating Income

13,654

9,120

4,534

49.7%

Net (Loss) Income attributable to Controlling Company

(4,912)

5,028

(9,940)

-197.7%

Shareholders’ equity attributable to Controlling Company

119,869

n.a.

-

-

Net Financial Position - (Debt) / Cash

(48,526)

n.a.

-

-

CAPEX *

14,237

10,563

3,674

34.8%

Fixed lines in service (in thousand lines)

3,679

3,861

(182)

-4.7%

Mobile customers (in thousand)

21,459

22,983

(1,524)

-6.6%

Personal (Argentina)

18,631

19,529

(898)

-4.6%

Nextel (Argentina)

447

952

(505)

-53.0%

Núcleo (Paraguay) -including Wimax customers-

2,381

2,502

(121)

-4.8%

Broadband accesses (in thousand)

4,083

3,974

109

2.7%

Cable TV Suscribers (in thousand)

3,484

3,511

(27)

-0.8%

Argentina

3,341

3,366

(25)

-0.7%

Uruguay

143

144

(1)

-0.7%

Average Billing per user (ARBU) Fixed Telephony / voice (in P$)

204.8

140.9

63.9

45.3%

Average Revenue per user (ARPU) Mobile Services - Personal (in P$)

165.0

135.3

29.7

21.9%

Average Revenue per user (ARPU) Broadband (in P$) ***

585.1

411.9

173.2

42.0%

Average Revenue per user (ARPU) Cable TV (in P$)

653.3

517.0

136.2

26.3%

1H18

1H17

Δ $

Δ %

Consolidated Revenues (MMP$)

64,179

49,705

14,474

29.1%

Net (Loss) Income attributable to Controlling Company (MMP$)

(4,912)

5,028

(9,940)

(197.7%)

(Losses) Earnings attributable to Controlling Company per Share (P$)

(2.3)

2.3

(4.6)

(Losses) Earnings attributable to Controlling Company per ADR (P$)

(11.4)

11.7

(23.1)

Operating Income before D&A *

36.3%

34.3%

Operating Income *

21.3%

18.3%

Net (Loss) Income*

-7.6%

10.2%

*As a percentage of Consolidated Revenues

Note: The average of ordinary shares outstanding considered amounted to and 2,153,688,011 as of 1H18 and 1H17

Consolidated Operating Revenues

Mobile Services

As of June 30, 2018, mobile clients amounted to 21.5 million.

In 1H18, services revenues represented P$22,398 million (+17.9% vs. 1H17). The commercial strategy was focused on promoting the consumption of mobile internet services through an integrated offer of plans suitable for all market segments.

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Mobile Services in Argentina

As of June 30, 2018, Personal reached 18.6 million subscribers in Argentina, where postpaid clients represented 37% of the subscriber base.

In 1H18, service revenues of Personal in Argentina (excluding equipment sales) amounted to P$19,386 million (+17.5% vs. 1H17), with 54.7% corresponding to mobile internet revenues (vs. 47.2% as in 1H17), as mobile internet revenues amounted to P$10,600 million (+36.3% vs. 1H17). In addition, equipment sales increased by 42.0% vs. 1H17, reaching P$4,798 million, equivalent to 19.8% of total revenues of Personal in Argentina.

The average monthly revenue per user (‘ARPU’) amounted to P$165.0 during 1H18 (+21.9% vs. 1H17).

As of June 30, 2018, Nextel reached approximately 0.4 million subscribers, where postpaid clients represented 82% of the subscriber base and prepaid clients represented the remaining 18%.

Commercial Initiatives

During the second quarter of 2018 and for mobile clients, the Company presented a special offer in international roaming for winter holidays, with the “Pack Mundo” bonus that includes free WhatsApp and data packs to navigate whenever the client is abroad.

At the same time, the promotion of the update of our clients’ devices with discounts and special financing continued, such as the offer presented on Father’s Day, and with new releases of innovative terminals, such as the Samsung S9.

As part of the mobile content and related with the new consumption modalities, the Company launched its webseries distribution platform through “Personal Play Webseries”, offering short-term premium fiction content, co-productions and other content in this format.

Regarding to actions linked to brand positioning, Personal and Huawei sponsored the launch of Personal Fest 2018, announcing a prominent line up, and the realization of the festival in the cities of Córdoba, Buenos Aires and Asunción (Paraguay).

Personal in Paraguay (‘Núcleo’)

As of June 30, 2018, Núcleo’s subscriber base reached around 2.4 million clients. Prepaid and postpaid customers represented 83% and 17%, respectively.

Núcleo generated service revenues equivalent to P$2,090 million during 1H18 (+65.0% vs. 1H17). Internet revenues amounted to P$905 million (+55.0% vs. 1H17) representing 43.3% of 1H18 service revenues (vs. 46.1% in 1H17).

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Cable TV Services

Cable TV service revenues reached P$13,872 million in 1H18 (+37.2% vs. 1H17). This increase was mainly explained by an up selling of value added services combined with price modifications. Total Cable TV subscribers totaled almost 3.5 million, while the Cable TV ARPU reached P$653.3 during 1H18, rising +26.3% vs. 1H17. Moreover, average monthly churn during 1H18 improved to 1.1%.

In the second quarter of the year, Cablevisión continued adding outstanding titles to its grid of content on demand. Among the most outstanding is: the “El Lobista” co-production, The Handmaid´s Tale and The Terror. In addition, the CINE.AR signal from the National Institute of Cinema and Audiovisuals Arts (INCAA), which broadcasts films, short films, documentaries and the latest news from the national productions, was added to Cablevisión´s high- definition grid.

On the eve of the World Cup in Russia, the Company through Personal and Cablevisión presented a value proposal for customers that included the possibility of watching through Flow the 64 matches of the tournament, without consuming the data of the Personal plan.

Fixed Telephony and Data Services

During 1H18, revenues generated by fixed telephony and data reached P$8,247 million in 1H18, +47.5% vs. 1H17. The increase in fixed telephony services was mainly explained by monthly fee price increases that came into effect for both corporate and residential fixed line customers, and additionally due to the bundled offer of packs that include voice and internet services (‘Arnet + Voz’), that aim to achieve higher levels of customer loyalty and churn reduction.

As a result, the average monthly revenue billed per user (‘ARBU’) reached P$204.8 in 1H18, +45.3% vs. 1H17.

Meanwhile, Data revenues increase (services mainly offered to Corporate customers, SMEs, Government and to other operators) was mainly driven by FX rate variations that affected those contracts that were adjusted by the $/U$S exchange rate and due to the increase in the number of clients, generated in a context that evidence the strong position of Telecom as an integrated ICT provider.

In line with the convergent proposal of services and positioning the company as an integral provider of business solutions, the union of FiberCorp, Personal and Telecom brands was presented through a communication campaign, highlighting the power of the this unification for the segment.

Likewise, as part of the actions of the corporate business, FiberCorp participated for the sixth consecutive year as sponsor and technological partner of the OSDE Open Center in Cordoba, the golf tournament that is part of the PGA Tour Latin America.

Finally, in order to keep supporting the technological and innovative developments that take place in the country, Telecom was a technological supplier of Campus Party, the meeting of innovation, science and entertainment.

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Internet Services

Internet services revenues totaled P$14,435 during 1H18, +33.2% vs. 1H17. As of June 30, 2018, total broadband accesses increased to almost 4.1 million (+2.8% vs. 1H17). Additionally, broadband ARPU amounted to P$585.1 per month in 1H18 (+42.0% vs. 1H17). Moreover, the average monthly churn rate for the period remained stable around 1.5%. On the other hand, clients with service of 20Mb or higher currently represent 29% of the total customer base as of 1H18.

Consolidated Operating Costs

Consolidated Operating Costs totaled P$50,525 million in 1H18, an increase of P$9,940 million, or +24.5% vs. 1H17 (including D&A and impairment of PP&E). Continuing with the trend observed during the lasts quarters, this overall increase is below inflation levels and moreover Revenue growth, which allowed a significant increase in the Company’s Operating Income before D&A and to improve its margin. This was a result of a higher level of efficiency in the cost structure. Higher costs are mainly associated to the effect of higher revenues, a highly competitive environment in the mobile and Internet businesses, the impact of higher direct and indirect labor costs generated by the operations in Argentina, the increase in costs of services contracted with our suppliers, higher programming and content costs due to cost from the incorporation of broadcasting signals of football matches.

The cost breakdown is as follows:

- Employee benefit expenses and severance payments totaled P$11,054 million (+21.4% vs. 1H17), mainly impacted by increases in salaries to unionized and non-unionized employees together with the associated social security contributions. Finally, total employees at the end of 1H18 amounted to 26,325 (vs. 26,992 in 1H17).

- Interconnection and transmission costs (including TLRD, Roaming, Interconnection, international settlement charges and lease of circuits) amounted to P$1,974 million, +8.1% vs. 1H17. This increase is mostly explained by higher TLRD costs.

- Fees for services, maintenance, materials and supplies amounted to P$6,239 million (+20.9% vs. 1H17), mainly due to greater fees for services, mostly related to call centers and to higher fees driven mainly by new Company projects and services linked to operational management in general. There were also higher technical maintenance costs and higher hardware and software maintenance costs due to the increase in prices, the FX fluctuations and the higher level of activity.

- Taxes and fees with regulatory authorities reached P$5,235 million (+31.1% vs. 1H17). The increase was mainly due to the growth in sales.

- Commissions and advertising (Commissions paid to agents, prepaid card commissions and others) totaled P$3,818 million (+20.9% vs. 1H17). The increase is mostly due to collections fees and higher advertising charges, offset by a decrease in CPP commissions and commercial channels.

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- Cost of handsets sold totaled P$3,596 million (+21.9% vs. 1H17), this increase was for the most part a consequence of higher costs per unit due to the rise in participation of high-end devices.

- Programming and content costs totaled P$4,529 million (+53.4% vs. 1H17), largely due to the incorporation of the cost of signals to broadcast live football matches of the first division of the Argentine Football Association.

- Depreciation, amortization and impairment of PP&E amounted P$9,642 million (+21.6% vs. 1H17). Depreciations of PP&E totaled P$7,667 million, amortizations of intangible assets reached P$1,834 million, while the losses of PP&E reached P$39 million and the impairment of PP&E P$102 million. The higher charge is mostly due to a greater amortization and depreciation of PP&E and intangibles, corresponding to higher values allocated to the aforementioned assets resulting from the acquisition method under IFRS 3.

- Other Costs totaled P$4,438 million (+26.6% vs. 1H17), of which bad debt expenses reached P$1.273 million (+37.3% vs. 1H17), and whose increase is mainly due to the impact generated by the application as of the FY2018 of IFRS 9, partially offset by greater efficiency in the delinquency management, as well as other operating costs that totaled P$3,165 million, increasing by 22.8% vs. 1H17.

Net Financial Results

The Net Financial Results (including Financial Costs on Debt and Other Financial Results, net) showed a loss of P$20,847 million, compared with a loss of P$1,422 million in 1H17. The result was mainly due to FX losses of P$19,882 million (compared with a loss of P$696 million in 1H17), mostly due to the strong depreciation of the peso during the 1H18, followed by net interest losses of P$1,001 million (representing a greater loss of P$856 million vs. 1H17), which are partially offset by gains on investments of P$655 million (that generated greater earnings of P$682 million vs. 1H17).

Consolidated Net Financial Debt

As of June 30, 2018, net financial debt position (cash, cash equivalents plus financial investments and financial NDF minus loans) totaled P$48,526 million,  increasing when compared to the consolidated net financial debt position as of December 31, 2017 (calculated as the sum of consolidated net financial debt positions of Telecom Argentina and Cablevisión, which was P$9,580 million).

in million of P$

1H17

1H18

$ Var

FX results

-$ 696

-$ 19,882

-$ 19,186

Net Interests

-$ 145

-$ 1,001

-$ 856

Gains on investments

-$ 27

$ 655

$ 682

Others

-$ 554

-$ 619

-$ 65

Total

-$ 1,422

-$ 20,847

-$ 19,425

Capital Expenditures

During 1H18, the Company invested P$14,237 million, increasing approximately 34.8% from the sum of the parts of Telecom Argentina’s and Cablevisión’s CAPEX as of 1H17, focusing on projects that maximize the network capacity and on the development of products and services that contribute to address the customer’s needs that today demand for connectivity and data availability. Moreover, transmision and transport networks has been extended to unify the differents access technologies, reconverting the copper fixed networks into fiber or coaxial-fiber  hybrid networks, in order to face the the increaseing services demand from mobile and fixed clients.  Likewise, significant

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investments have been made in the charging, billing and relationship systems with customers. In relative terms, CAPEX reached 22.2% of consolidated revenues.

In terms of infrastructure, the deployment of the 4G/LTE network continued throughout the country, reaching more than 1,400 cities, including all the capital cities of the provinces, reaching 11.1 million customers with 4G devices.

Simultaneously, anticipating the technological evolution, Personal and Nokia conducted a test of the 5G network under controlled environments, which achieved speeds of 10Gbps.

Relevant Matters

Acquisition of the entire remaining shares of the controlled company CV Berazategui S.A.

On April 4, 2018, Telecom Argentina informed that it had acquired representative shares of 30% of the social capital and votes of the company CV Berazategui S.A. (“CV Berazategui”), constituted in the Argentine Republic, for a total amount of US$ 8,968,000.-

The remaining 70% of the social capital and votes of CV Berazategui are owned by PEM S.A., company controlled by Telecom Argentina.

CV Berazategui is a licensee of Broadcasting Services provided by Subscription through Physical Link, license which was originally granted by Resolution N°630/COMFER/91, and provides the service in the Berazategui Department, Province of Buenos Aires to 21,392 Cable TV (CATV) subscribers and 7,190 broadband subscribers.

Contract with Vodafone

On June 14, 2018 Telecom Argentina announced the signature of a contract of strategic cooperation with Vodafone Sales & Services Limited (“Vodafone”), company with headquarters in the United Kingdom, which will allow Telecom Argentina to delineate its business strategies from sharing the best practices of a global reach telecommunications operator as it is Vodafone.

Merger by Absorption between Telecom Argentina S.A. (the Surviving Company) and Cablevisión S.A. (the Absorbed Company) – Resolution of the Secretary of Commerce

On June 29, 2018 Telecom Argentina was notified that the economic concentration operation which consists in the merger by absorption of Cablevisión S.A. (“Cablevisión”), as absorbed company, by Telecom Argentina, as surviving company, has been authorized by the Commerce Secretary in the terms of the item a) of the Section 13 of the Law N° 25,156 by means of the Resolution N° 374 APN-SECC#MP dated June 29, 2018, which was notified today, by which it was resolved, among others:

“SECTION 1.- (relevant part) Approve the assignment of ONE HUNDRED FORTY-THREE THOUSAND FOUR HUNDRED SIXTY-FOUR (143.464) residential clients from the internet service that is provided through the Arnet brand to the firm UNIVERSO NET S.A. implemented through FIVE (5) definitive contracts already signed (…), and in virtue of it,

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authorize in the terms of the subsection a) of the Article 13 of the Law N° 25,156 the merger operation by which TELECOM ARGENTINA S.A. absorbs CABLEVISIÓN S.A.

SECTION 2. - Accept the commitment of conduct submitted on May 21, 2018 by CABLEVISIÓN S.A., CABLEVISION HOLDING S.A., TELECOM ARGENTINA S.A. and FINTECH TELECOM LLC. (and as a continuation company of FINTECH MEDIA LLC.), which as an annex of joint signature N° IF-2018-30740468-APN-CNDC#MP forms an integral part of the majority opinion N° IF2018-30780664-APN-CNDC#MP, whereby TELECOM ARGENTINA SA “undertakes to limit until January 1, 2019, or until the possibility of requesting the registration of television by satellite subscription is enabled for all operators of ICT services, whichever comes first of these two events, the integrated marketing of the service of Television by Subscription by means of a physical link with the Mobile Communications service in all those locations where the Television by Subscription service is provided to date by means of physical link”, understood as integrated commercialization “exclusively to the joint sale of the services indicated in the previous paragraph (Television by Subscription by physical link and Mobile Communications) with a single tariff or a single invoice”, offering additionally “ to extend the term of the limitation (...) until July 1, 2019, or until the possibility of requesting the satellite subscription television registration in enabled for all operators of ICT services, whichever comes first, in those locations where they provide the service of Subscription Television to date by means of a physical link excluding Area II, as defined in the provisions of Decree No. 1461/93 as amended, and the cities of Rosario, Province of Santa Fe and Córdoba, Province of Córdoba”, clarifying that the “extension of the term offered will automatically cease, when in the same location, another provider makes an integrated offer of the Subscription Television Service through physical link with the Mobile Communications service.”

SECTION 3. - Accept the commitment of conduct submitted on May 21, 2018 by CABLEVISIÓN S.A., CABLEVISION HOLDING S.A., TELECOM ARGENTINA S.A. and FINTECH TELECOM LLC. (and as a continuation company of FINTECH MEDIA LLC.), which as an annex of joint signature N° IF-2018-0740468-APN-CNDC#MP forms an integral part of the majority Opinion N° IF2018-30780664-APN-CNDC#MP, whereby TELECOM ARGENTINA S.A. “is committed to offering the possibility that any current or new ISP can provide the retail broadband service from the leverage of the use of its copper network under ADSL technology,” stating that “this wholesale offer is open to any ISP under the same commercial conditions with the purpose of allowing them to offer products with speeds up to 6MB in all the capillarity of the cooper network of TELECOM” and that “only the 28 locations in which TELECOM divested the customers of the fixed broadband service that renders under the ARNET brand are excluded from this offer”, clarifying that “this commitment allows any ISP to offer products with speeds up to 6MB in all the capillarity of the copper network of TELECOM” and that “the ISP will be able to offer its service with the same processes, systems and technological infrastructure that TELECOM uses for its final clients (such as Dslams and international departure)”, according to the document that they have denominated as “Reference Offer of Wholesale Contract” which was attached and acts as Annex of joint signature N° IF-2018-30740468-APN-CNDC#MP to the referred Opinion.”

*******

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As of August 8, 2018, Telecom Argentina has 2,168,909,384 shares issued and 2,153,688,011 shares outstanding.

Solange Barthe Dennin

Luis F. Rial Ubago

Nahuel Monsalvo

(5411) 4968 3752

(5411) 4968 3718

(5411) 4698 4448

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06/30/18

12/31/17

Cash and cash equivalents

6,958

4,414

Financial Investments

4,925

110

Trade receivables

12,365

1,753

Other Receivables

2,993

828

Inventories

2,379

83

Total current assets

29,620

7,188

Financial Investments

3,682

-

Trade receivables

117

-

Goodwill

63,903

4,109

Property, plant and equipment (‘PP&E’)

91,585

22,080

Intangible assets

42,024

2,368

Other Receivables

1,384

531

Total non-current assets

202,695

29,088

TOTAL ASSETS

232,315

36,276

Trade payables

18,943

3,886

Financial debt

35,622

937

Salaries and social security payables

3,932

1,751

Taxes payables

2,276

1,858

Dividend Payable

-

4,078

Other liabilities

1,303

103

Provisions

455

0

Total current liabilities

62,531

12,613

Trade payables

160

-

Financial debt

28,469

9,907

Salaries and social security payables

145

-

Deferred income tax liabilities

14,880

266

Taxes payables

2

3

Other liabilities

858

134

Provisions

3,091

1,092

Total non-current liabilities

47,605

11,402

TOTAL LIABILITIES

110,136

24,015

Equity attributable to Controlling Company

119,869

11,694

Non-controlling interest

2,310

567

TOTAL EQUITY

122,179

12,261

TOTAL LIABILITIES AND EQUITY

232,315

36,276

06/30/18

12/31/17

Bank overdrafts - principal

155

-

Bank and other financial institutions loans - principal

30,035

52

Notes - principal

2,301

-

Accrued interest and related expenses

2,095

29

For purchase of equipment

1,036

852

Companies under Section 33 - Law 19,550 and related parties

-

4

Total Current Loans

35,622

937

For purchase of equipment

441

465

Notes - principal

14,411

9,325

Bank and other financial institutions loans - principal

12,224

142

Accrued interest and related expenses

1,393

(25)

Total Non Current Loans

28,469

9,907

Total Loans

64,091

10,844

Cash and cash equivalents, and Financial Investments

15,565

4,524

Net Financial Position - Cash (Debt)

(48,526)

(6,320)

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Telecom

(acquired

Company)
(1)

Adjustments
on Income of

Previous FY’s
(2)

NIIF 3

Merger

Effect

(3)

Total

indentifiable

net

assets, inc.

ASSETS
CURRENT ASSETS

Cash and cash equivalents

2,831

-

-

2,831

Trade receivables (4)

8,636

157

(656)

8,137

Other current assets (4)

6,771

-

32

6,803

Total current assets

18,238

157

(624)

17,771

NON CURRENT ASSETS

Deferred income tax assets

626

-

(624)

2

Investments

2,657

-

3

2,660

Goodwill

2

-

59,653

59,655

Property, plant and equipment (‘PP&E’) (4)

28,538

-

34,209

62,747

Intangible assets

7,096

(85)

33,175

40,186

Other non current assets (4)

431

125

(125)

431

Total non currents assets

39,350

40

126,291

165,681

Total assets

57,588

197

125,667

183,452

LIABILITIES

-

-

-

-

CURRENT LIABILITIES

Total current liabilities

21,987

-

7

21,994

NON CURRENT LIABILITIES

Deferred income tax liabilities

48

83

16,610

16,741

Other non current liabilities

11,674

-

18

11,692

Total non current liabilities

11,722

83

16,628

28,433

Total Liabilities

33,709

83

16,635

50,427

EQUITY

Capital Stock - Outstanding Shares

969

-

(15)

954

Inflation Adjustment – Outstanding Shares

2,646

-

-

2,646

Capital Stock - Treasury Shares

15

-

-

15

Inflation Adjustment – Treasury Shares

42

-

-

42

Treasury shares acquisition cost

(461)

-

-

(461)

Merger Premium

-

-

109,469

109,469

Legal reserve

734

-

-

734

Special reserve for IFRS implementation

351

-

-

351

Voluntary reserve for investments in capital stock

461

-

-

461

Reserve for future cash dividend payments

9,730

-

-

9,730

Other comprehensive income

972

-

(972)

-

Cost of equity interest increase in controlled companies

(3)

-

3

-

Retained earnings

7,630

128

-

7,758

Equity attributable to Telecom Argentina

23,086

128

108,485

131,699

Equity attributable to non-controlling interest

793

(14)

547

1,326

TOTAL EQUITY

23,879

114

109,032

133,025

TOTAL LIABILITIES AND EQUITY

57,588

197

125,667

183,452

Three month

Six month

Impact of greater asigned value over consolidated income statements

period ended

period ended

June 30, 2018

June 30, 2018

Revenues

(5)

(11)

Operating costs before D&A

(20)

(100)

Operating income before D&A

(25)

(111)

Depreciation, amortization (‘D&A’) and impairment of PP&E

(1,621)

(3,197)

Operating income

(1,646)

(3,308)

Finance results, net

9

15

Net (loss) income before income tax expense

(1,637)

(3,293)

Income tax expense

491

988

Net (loss) Income

(1,146)

(2,305)

Attributable to Telecom Argentina (Controlling Company)

(1,133)

(2,279)

Attributable to non controlling interest

(13)

(26)

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4-

Consolidated Income Statements - as reported in FFSS

06/30/18

06/30/17

Revenues

64,179

19,233

Consolidated Operating Costs

(50,525)

(13,540)

Operating income

13,654

5,693

Net Financial results and results of equity in earnings from associates

(20,756)

(816)

Net (loss) income before income tax expense

(7,102)

4,877

Income tax expense

2,230

(1,705)

Net (loss) income

(4,872)

3,172

Attributable to:

Controlling Company

(4,912)

3,139

Non-controlling interest

40

33

Operating income before D&A

23,296

7,526

As % of Revenues

36.3%

39.1%

Net Financial results

06/30/18

06/30/17

Financial expenses on debt

Interest on debt

(1,345)

(316)

Exchange differences on debt

(20,097)

(449)

Financial debt discounts

(28)

1

Other financial expenses

70

26

Total financial expenses on debt

(21,400)

(738)

Other financial results, net
Interest and gains on investments

600

100

Taxes and bank expenses

(607)

(242)

Exchanges differences on cash and cash equivalents

1,538

4

Exchanges differences from other items

(1,323)

51

Financial discounts on assets, debts and diverse

(20)

8

Results for operations with notes and bonds

655

(27)

Results from changes on fair value of financial instruments

-

(8)

Interest on provisions

(256)

(34)

Quinquennial financial costs

(29)

-

Others

(5)

(8)

Total other financial results, net

553

(156)

(20,847)

(894)

5-

Consolidated Income Statements - as reported in FFSS

Three Months Comparison

06/30/18

06/30/17

Revenues

33,481

9,800

Consolidated Operating Costs

(26,953)

(6,955)

Operating income

6,528

2,845

Finance results, net

(18,493)

(845)

Net (loss) income before income tax expense

(11,965)

2,000

Income tax expense

3,612

(720)

Net (loss) income

(8,353)

1,280

Attributable to:

Controlling Company

(8,372)

1,265

Non-controlling interest

19

15

Operating income before D&A

11,503

3,737

As % of Revenues

34.4%

38.1%

12

www.telecom.com.ar

6-

Consolidated Income Statements - Pro Forma

06/30/18

06/30/17

Δ $

Δ %

Revenues

64,179

49,705

14,474

29.1%

Consolidated Operating Costs

(50,525)

(40,585)

(9,940)

24.5%

Operating income

13,654

9,120

4,534

49.7%

Net Financial results and results of equity in earnings from associates

(20,756)

(1,344)

(19,412)

-

Net (loss) income before income tax expense

(7,102)

7,776

(14,878)

-191.3%

Income tax expense

2,230

(2,715)

4,945

-182.1%

Net (loss) income

(4,872)

5,061

(9,933)

-196.3%

Attributable to:

Controlling Company

(4,912)

5,028

(9,940)

-197.7%

Non-controlling interest

40

33

7

21.2%

Operating income before D&A

23,296

17,048

6,248

36.6%

As % of Revenues

36.3%

34.3%

Net Financial results

06/30/18

06/30/17

Δ $

Δ %

Financial expenses on debt

Interest on debt

(1,345)

(748)

(597)

79.8%

Exchange differences on debt

(20,097)

(786)

(19,311)

-

Financial debt discounts

(28)

1

(29)

-

Other financial expenses on debt

70

26

44

169.2%

Total financial expenses on debt 

(21,400)

(1,507)

(19,893)

-

Other financial results, net

Interest and gains on investments

600

801

(201)

-25.1%

Taxes and bank expenses

(607)

(525)

(82)

15.6%

Exchanges differences on cash and cash equivalents

1,538

43

1,495

-

Exchanges differences from other items

(1,323)

47

(1,370)

-

Financial discounts on assets, debts and diverse

(20)

8

(28)

-

Results for operations with notes and bonds

655

(27)

682

-

Results from changes on fair value of financial instruments

-

(8)

8

-100.0%

Interest on provisions

(256)

(198)

(58)

29.3%

Quinquennial financial costs

(29)

(23)

(6)

26.1%

Others

(5)

(33)

28

-84.8%

Total other financial results, net

553

85

468

-

(20,847)

(1,422)

(19,425)

-

7-

Consolidated Income Statements - Pro Forma

Three Months Comparison

06/30/18

06/30/17

Δ $

Δ %

Revenues

33,481

25,581

7,900

30.9%

Consolidated Operating Costs

(26,953)

(20,956)

(5,997)

28.6%

Operating income

6,528

4,625

1,903

41.1%

Finance results, net

(18,493)

(1,366)

(17,127)

-

Net (loss) income before income tax expense

(11,965)

3,259

(15,224)

-

Income tax expense

3,612

(1,161)

4,773

-

Net (loss) income

(8,353)