Maxcom Telecomunicaciones, S.A.B de C.V. - Amazon S3

Maxcom Telecomunicaciones, S.A.B de C.V.

First Quarter Results 2020

Content Recent Developments

o COVID-19: Current Economic Environment and Prospects for

Maxcom

o Follow-up on relevant tax matters

o CFE Lease Agreement - OPGW Fiber

o Changes in the Organizational Structure

o Other Relevant Events

Earnings Results Summary

Commercial Business Unit

Residential Business Unit

Wholesale Business Unit

Consolidated Revenue

Costs, Expenses and Other Items

EBITDA & Operating Income (Loss)

Comprehensive Financing Result

Taxes

Net Income (Loss)

CAPEX

Indebtedness

Stockholders' Equity

Exhibits – Non-Audited Financial Statements

First Quarter 2020 Results

COVID-19: Current Economic Environment and Maxcom´s Outlook

As everyone knows, for the past few weeks a scenario of unprecedented global crisis has developed due to COVID-19,

both as a medical/health crisis as well as an economic/financial crisis. The negative impact of COVID-19 on the global

economy will be enormous and Mexico will be no exception. First, global production chains were abruptly interrupted

and now the measures taken to reduce contagion strongly reduce the demand. The simultaneous combination of the

above produces a shock where the global supply and demand for goods and services wreaks havoc on stock markets

and oil prices, the latter affecting Mexico's public finances. The aforementioned is expected to lead to a fall in National

GDP, which could range from 6.5% in the most optimistic scenario to 12% in a lengthy crisis scenario, according to

different estimates.

In this same sense, Mexico has been affected by the reduction of its credit rating by S&P, which went to "BBB" from

"BBB+" with a negative outlook, only two notches away from losing investment grade. Meanwhile, the long-term local

currency sovereign credit rating was also downgraded to "BBB +" from "A-". Finally, S&P also lowered Pemex's credit

rating to "BBB" with a negative outlook. All of the above reflects, in part, the low confidence of the private sector and the

low investment dynamics.

In addition to the aforementioned, the current proposal of the Federal Government to face the crisis does not fight

frontally and decisively the value destruction caused by the potential closure of companies with liquidity problems and

does not provide support destined to protect formal employment, either by tax measures or reallocation of public

expenditure.

As a consequence of all the events aforementioned, the Mexican peso is in a weak position, depreciating steadily in

recent weeks. As of March 31, 2020, the depreciation of our currency against the dollar was 24.76%, thus comparing

the 1Q20 closing exchange rate of Ps.23.5122 against Ps.18.8452 of 4Q19.

Maxcom is part of an industry classified as essential for the continuity of general economic activity. Additionally,

telecommunications services are protagonists in this health contingency due to the conjunctural opportunities that arise

from the great demand that will exist for functionalities that enable the new ways of living together and doing business

such as remote work, entertainment and remote education. Furthermore, there is a need for companies to increase their

levels of cyber security and guarantee remote collaboration environments in a safe and effective way. Despite this, we

anticipate anything but a positive outlook.

This has forced us to carefully rethink the financial situation of the company to face the impacts on income and collection

that we will have during the rest of the year due to the imminent decrease in economic and commercial activity in general,

the increase in unemployment from the second quarter of the year onwards and the negative behavior in the main

macroeconomic variables already mentioned. We anticipate that these effects will impact in one way or another the

majority of our current clients and will significantly limit our capacity to grow.

Recent Developments


Additionally, we anticipate that the 24.76% devaluation of the peso against the dollar will negatively affect our operating

margins. The foregoing, considering that multiple expenditures of the Company; both operating and capital are fixed in

US dollars including, of course, the fact that the vast majority of our debt is denominated in US dollars.

Based on an adverse scenario of high uncertainty regarding its duration and effects, we have prepared a financial and

operating scenario of minimum cash consumption to responsibly face the challenges of 2020. It is important to note

that at the end of 2019 the company ended a long process of both operational and financial restructuring and that today,

despite the aforementioned adverse conditions, we are in a more solid position to face these challenges in the best

possible way. As part of these adjustments to growth expectations and income generation, we have focused our efforts

on:

Adjusting the variables that affect the working capital of the company to minimize the use of cash, foreseeing, on

the one hand, an impairment in the quality of the accounts receivable and their recovery times, but at the same

time an improvement in the conditions and terms of payments with our suppliers.

Consolidating the achievement of synergies that translate into continuous reduction of administrative and technical

expenses, always seeking to maintain optimal service levels for our clients.

Reducing CAPEX, giving priority to investments associated with new income generation.

Temporarily adjusting the cost of payroll to generate material savings in this area while striving to avoid layoffs to

the extent possible. This reduction plan only includes people who, due to their working conditions, exceed the

Company's current average salary level, with the intention of not harming those who earn lower incomes. The

salary adjustment contemplates ranges of 10%, 15% and 20% of discount on the monthly gross salary plus benefits

above the law for a period of 6 months. It is important to clarify that this reduction was concluded through an

agreement duly validated by the Procuraduría Federal de la Defensa del Trabajo (PROFEDET) to guarantee full

transparency and legal certainty for company employees.

Seek an approach and open dialogue with our financial creditors that allows us to guarantee adequate levels of

liquidity to consolidate our transformation process:

a) In this regard, Maxcom is seeking to reschedule the payments on the loan granted by Bancomext on October

14, 2015 in the amount of Ps.150 million, which presents an outstanding balance at the end of the quarter of

Ps.15 million. The terms requested are the extension of the credit until July 2021 and the deferral of the

amortizations of capital for the remainder of this year. The Company is optimistic about achieving a satisfactory

rescheduling.

b) Likewise, due to the strong impact that the devaluation of the peso against the dollar has had in the margins,

in the value of the debt and in the financial burden, as well as the evolution of the company's fiscal contingency

during the quarter, that led to the determination of a tax credit of Ps. 631 million, and depending on the

performance of the Company in the following months in the face of the previously described outlook, Maxcom

may explore alternatives to better align its financial situation with its other financial obligations in order to

ensure the continuity of the Company’s operations, seeking at all times to fulfill the financial commitments

made.

During the following weeks; and as the impact of the current crisis on our business becomes clearer, we will focus our

efforts on consolidating the implementation of all these initiatives. At the same time, we will seek to execute different

strategic alternatives that allow us to increase the company's liquidity and further improve our capital structure.


Follow-up on Relevant Tax Matters

In respect to the settlement notice of February 14, 2020 issued by the Tax Administration Service (SAT); where SAT

is demanding from to Maxcom the payment of omitted contributions in 2015 for the amount of Ps. 631 million which

includes updates, surcharges and fees, on March 30 and 31, 2020, Maxcom filed through its tax mailbox and on the

face of the Central Administration of Contentious Large Taxpayer of the SAT´s offices, a Revocation Appeal against

the settlement received, in which 11 grievances and 46 pieces of evidences were presented, in which serious violations

of the process are exposed and all the necessary evidence is provided in order to demonstrate the existence and

materiality of the services received.

Given the clear existence and materiality of the long distance services received, Maxcom maintains its position that

said settlement is inadmissible and therefore will continue to exercise the corresponding means of defense. It is worth

mentioning that the aforementioned tax credit it is not firm nor definitive, so we have not recognized a provision in this

regard in our Financial Statements.

Among the negative effects of greater impact that the SAT settlement notice has had for the Company is the suspension

of the process to obtain a credit line for Ps.200 million, which would have been used to replace the cash worn to pay

for the renewal of our point-to-multipoint frequencies on the 15 and 23 GHz bands that took place on January 9 of this

year. Although we had not secured this credit line, we were already well advanced in the negotiations for approval

when we made public the official settlement notice by the authorities, which caused the process to be interrupted until

we had an outlook of greater legal certainty by the Company.

CFE Lease Agreement - Fiber OPGW Maxcom

In follow-up to what has been widely revealed in previous quarterly reports and in the debt restructuring process as an

operational risk factor for the Company, in relation to the ordinary civil trail filed by Maxcom against the refusal of the

Federal Electricity Commission (CFE) to renew the Lease Agreement signed with said Commission on June 23, 1999,

for the lease of several parts relating to Maxcom's 476 km of dark optical fiber on the OPGW Puebla-Poza Rica route,

it is suspended until May 5 given the health contingency by COVID-19, a date that will surely be postponed for as long

as the contingency period remains.

We have recently had operational complications on the part of CFE to obtain the necessary licenses to carry out the

maintenance and repair work on our OPGW fiber, however, given the efforts we have carried out during this

contingency period, CFE has already confirmed to Maxcom that it will be able to carry out the works that are necessary

in coordination with them. Going forward, we will continue to manage what is necessary operationally, until the trial is

finally resolved.


Change in Organizational Structure

On April 22, 2020, the Board of Directors approved the resignation of Lauro Cantú Frías as General Director of the

Company, having an effective date of April 30, 2020. Likewise, the Board of Directors approved the appointment of Erik

González Laureano and Javier Ramón Guerrero as Co-CEOs of Maxcom as of May 1.

Both Erik González Laureano and Javier Ramón Guerrero are currently working at Maxcom as Vice President of

Administration and Finance and Vice President of Business Strategies, respectively.

Mr. González, 44 years old, is a Public Accountant and Bachelor of Administration from ITAM and holds a Master of

Business Administration from the Manchester Business School in the United Kingdom.

Regarding Mr. Guerrero, he is 47 years old and holds a Bachelor of Engineering in Computer Systems and a Master

of Science in Computer Technology from ITESM.

Other Relevant Events

First coupon of the New Notes 2024

On April 27, 2020, Maxcom paid US$2.3 million corresponding to the first coupon of the restructured debt maturing

in 2024. The coupon, with a rate of 8%, accrued interest for the period from October 25, 2019 to 24 April 2020.

It is worth mentioning that the restructured debt amounts to US$56.9 million.

Financial statements audited for 2019

On February 28, 2020, Maxcom received from Galaz, Yamazaki, Ruiz Urquiza, S.C. (“Deloitte”) the audited

financial statements of Maxcom Telecomunicaciones, S.A.B. de C.V. for the financial year 2019, with its

corresponding notes to the financial statements. Deloitte's opinion on Maxcom's consolidated financial statements

was without qualified. It should be mentioned that there were no changes or adjustments with respect to the figures

presented in the quarterly report corresponding to 4Q19.


As we have previously mentioned and considering the

outlook of uncertainty that we are currently experiencing

as a result of COVID-19, the Company will focus all its

efforts on continuing to reduce its costs and expenses in

order to mitigate the negative financial effects that the

health contingency may cause, as well as the impact on

the decrease in recurrent revenue. As a result of this

effort, Maxcom presented a 32% decrease in general

expenses compared to 1Q19.

In regards to the revenue mix, the Wholesale business

unit presents a decrease in its participation, from 30% in

1Q19 to 14% in this reporting quarter.

TOTAL

REV ENUE

Ps.245 million

NETWORK

OPERA TION

COST

Ps.120 million

-42% vs 1Q19

G ROSS PRO FIT

MARG IN

51%

vs 45% 1Q19

EBITDA

Ps.59 million

-19% vs 1Q19

OPERA TING

INCO ME (LOSS)

Ps.-49 million

vs Ps.-39 million

1Q19

NET INCOME

(LOSS )

Ps.-367 million

Earnings Results Summary

EBITDA for the quarter was Ps.59 million on a

consolidated basis, which represents a decrease of 19%

compared to 1Q19. The main factors that explain the

variation were:

The decrease in Commercial recurrent revenue by

Ps.25 million, largely due to the reduction in the

Government segment associated with the México

Conectado project

Traffic decrease in the Call Center segment

associated with several customers

The organic decrease in revenues from the

Residential segment for Ps. 9 million associated with

the execution of our “wind down” plan

Maxcom´s 1Q20

Performance

Regarding total cost, the Company presents a decrease

of Ps.87 million or 42% compared to the same period in

2019. This effect is a direct consequence of the decrease

in the volume of traffic from the Wholesale business unit.

Excluding the Wholesale cost, the Company presented a

decrease of Ps.12 million or 12% compared to 1Q19.

Item 1Q20 4Q19 % var

Total Revenues 245 348 (30%)EBITDA 59 58 2% EBITDA margin (%) 24% 17%Net income (loss) (367) 198 (286%)Net margin (%) (150%) 57%

Cash and financial instruments 149 313 (52%)CAPEX 219 187 17% Debt 1 1,906 1,622 18% Net debt / LTM EBITDA (X) 7.8 5.5 42%

Customers 27,782 29,996 (7%)Commercial 1,221 1,177 4% Residential 26,561 28,819 (8%)

1 Debt is considered at face value and includes interest payable as of the end of the period

MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIESFINANCIAL AND OPERATING HIGHLIGHTS

Figures in millions of pesos, except operating data

Residential8%Commercial

78%

Wholesale14%

WEIGHT (%) 1Q20

64%

50% 47% 45% 42% 41% 40%

51%

0%

10%

20%

30%

40%

50%

60%

70%

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20

GROSS MARGIN


Compared to the previous quarter, it increased 15

p.p. as a consequence of the decrease in Wholesale

revenues.

Sequentially, total revenue decreased by Ps.5 million

or 3%. This variation is explained by the decrease in

the revenue of a Call Center segment customer and

the decrease by a non-recurrent revenue registered

during 1Q19 derived from the sale of an optical

channel on two of our long-distance transport routes

for a period of 10 years. Despite the decrease in the

Call Center and Carriers segments, revenue in the

Commercial segment increased by 4% or Ps.4 million

due to non-recurrent income, which made it possible

to partially offset the reductions in the commented

segments.

Commercial Business Unit

Commercial revenue reached Ps.189 million,

representing a decrease of 19% or Ps.44 million

compared to the Ps.233 million registered during

1Q19. This is due to the fact that during 1Q19 the

Company concluded a non-recurrent sale of a surplus

of fiber optic infrastructure for a total amount of Ps.18

million. In addition to this, the Company suffered the

loss of income due to the disconnection of a client from

the Government segment associated with the México

Conectado project, as well as the decrease in traffic

from some call center customers that had an impact

on our variable revenue stream.

Participation within the total revenue mix of this

business unit totaled 78% for the quarter.

Wholesale Business Unit

During the quarter, revenue in this business unit was Ps.35 million, a decrease of 69% or Ps.76 million compared

to the same period in 2019 and 73% or Ps.93 million compared to the revenue reported in 4Q19. The decrease

in both cases is due to the revenue reduction recorded in the residential and commercial business units, which

hinder our capacity to generate the volumes we were achieving during 2019.

As a consequence of the decrease in traffic, the participation in the total revenues mix at the end of the quarter

was 14%, a figure that compares unfavorably with the 30% reported in 1Q19.

As previously mentioned, the Company maintains the

position of extending the “wind down” process as long

as the profitability of the business justifies the

extension. Management maintains stable income as

well as controlled margins. The installed customer

base at the end of the quarter is approximately 26

thousand customers.

The income generated by the business unit was Ps.20

million, increasing its participation in the revenue mix

by 1 p.p. compared to 4Q19, as a consequence of the

decrease in Wholesale revenue. This participation is

expected to continue decreasing as organic churn

reduces the number of active customers.

Comparing 1Q20 versus 1Q19, the income of this

business unit presents a decrease of Ps.9 million or

30%. Sequentially, the decrease was 10% or Ps. 2

million, in line with expected behavior.

The direct contribution margin of this business unit for

the 3 months ended March 2020 was 48% or Ps.10

million.

Residential Business Unit


Consolidated Revenue

On a consolidated basis, total revenue reported in

1Q20 amounted to Ps.245 million, a decrease of 35%

or Ps.133 million when compared to 1Q19, largely

explained by the decrease in the Wholesale activity.

Network operating costs in 1Q20 decreased by 42%

to reach Ps.120 million compared to the Ps.206 million

reported in 1Q19. The variation is explained by:

The decrease in the cost of traffic for the

Wholesale business unit. The cost recorded

during the quarter was Ps.32 million, 70% lower

than the Ps.107 million registered in the same

period of 2019

Lower costs for operating leasings

Efficiencies in links and traffic costs

Lower software maintenance cost

The net savings without considering the Wholesale

cost totaled of Ps.12 million or 12%, as a result of the

efficiencies that the Company continues to generate

in its operating processes. As mentioned above, the

Company will seek to have greater efficiencies in this

item with the intention of mitigating the negative

financial effects that the pandemic may cause.

Gross profit had a decrease of 27% or of Ps.45 million

compared to 1Q19. Sequentially, gross profit

registered a decrease of Ps.15 million or 11%.

Recurrent Commercial revenue remained at the

same level as previous quarters. The share of this

type of income was 76% of the Company's total

income. Compared to 1Q19, it had an increase in the

revenue mix of 21 p.p.

Sequentially, revenue registered a decrease of 30% or

Ps.103 million, also mainly explained by the decrease

in international traffic termination services.

Network Operating Cost

1Q20 4Q19 QoQ D% 1Q19 YoY D%Commercial Ps. 189 Ps. 194 (3%) Ps. 233 (19%)Wholesale 35 127 (73%) 111 (69%)Residential 20 23 (10%) 29 (30%)Others 1 4 (65%) 5 (75%)Total Ps. 245 Ps. 348 (30%) Ps. 378 (35%)

207

198

187

187

186

150

170

190

210

230

1Q19 2Q19 3Q19 4Q19 1Q20

RECURRENT COMMERCIAL REVENUE189

35 20

1

194

127

23

4

233

111

29

5

0

50

100

150

200

250

Commercial Wholesale Residential Others1Q20 4Q19 1Q19

373

244

(44) (9)

(76)

100

1Q19 COMMERCIAL RETAIL WHOLESALE 1Q20


EBITDA

During 1Q20 EBITDA was Ps. 59 million, which compares unfavorably against the Ps.73 million registered during

1Q19. This decrease is mainly due to the revenue reductions in the Commercial and Residential business units,

which could not be compensated with the efficiencies accounted for in costs and operating expenses.

Sequentially, EBITDA presented an increase of 2% or Ps.1 million. Despite the decrease in revenues of Ps.10

million without considering the Wholesale business unit, the continuous efforts in the execution of efficiencies

allowed the Company to maintain its profitability levels.

During 1Q20, the Company reported a total of SG&A

Expenses of Ps.67 million, 32% or Ps.32 million less

than the Ps. 98 million reported in 1Q19. On a

sequential basis, total expenses decreased 20% or

Ps.16 million.

The decrease in expenses is mainly due to the

efficiency execution effort made during the previous

quarters, mainly in:

Payroll, with a decrease of 26% or Ps.14 million

compared to 1Q19 and 5% or Ps.2 million

sequentially

Lower expense for Consultants, Fees and

Selling Expenses

Decrease in expenses due to the release of bad

debt reserves

As in the Network Cost items, the Company is

working to reduce Selling and General Expenses to

only what is strictly necessary for the proper

functioning of the network without affecting our

customers and the quality of our services.

Workforce at the end of the quarter amounted to 286

employees, a decrease of 16% or 55 people

compared to the same period of 2019 and a

sequential decrease of 2% or 7 people.

SG&A Expenses

21 73 58 50 58 59

8%

19%

16%

15%

17%

24%

0

40

80

4Q18 1Q19 2Q19 3Q19 4Q19 1Q200%

10%

20%

30%

EBIT

DA

(M

illion

s)

EBIT

DA

Mar

gin

EBITDA & EBITDA Margin

EBITDA EBITDA MARGIN


First Quarter First Quarter

of 2020 of 2019

Operating Activities 88 124

CAPEX (219) (63)

Financing Activities (33) (131)

Increase (Decrease) in Cash and Financial Instruments

(164) (71)

Cash and Financial Instruments at Beginning of Period

313 457

Cash and Financial Instruments at End of Period

149 386

Million Pesos

Operating Income (Loss)

The Company recorded an operating loss of Ps.49 million at the end of 1Q20, which compares unfavorably at

Ps.10 million or 26% with the loss of Ps.39 million registered in the same period of 2019.

On a sequential basis, the operating loss presented a considerable reduction of Ps.24 million or 33% derived

mainly from the recognition of annual cost of the Company's stock option plan for its executives for the

modifications made during 2019, which were recorded in 4Q19 for a total of Ps.14 million.

Taxes

During 1Q20, taxes of Ps.1.4 million were recorded for ISR and deferred tax. Compared to 1Q19, it represents

an increase of Ps.1 million or 169%. On a sequential basis, the Company had a decrease of Ps. 3 million or 69%.

Comprehensive Financing Result

During 1Q20, the Company recorded a comprehensive financing cost of Ps.311 million, which compares

unfavorably against the profit of Ps.30 million reported in the same period of 2019. This is mainly due to the

exchange loss of Ps. 272 million generated by the depreciation of the peso against the dollar at the end of this

reporting quarter, with an exchange rate of Ps.23.51 per dollar. Additionally, during the first quarter of 2019, the

Company made a repurchase of old notes for USD.8.9 million that generated a profit of Ps.70 million in 1Q19.

Net Income (Loss)

During 1Q20 the Company recorded a net loss of Ps.367 million, compared to a net loss of Ps.9 million recorded

in the same period of 2019. The variation is mainly explained by the extraordinary effect on the comprehensive

financing cost associated with the peso devaluation.

In addition to the aforementioned results, the Company recorded a loss for investment in associates of Ps.6 million

corresponding to the investment in Celmax, a company that was deconsolidated in 4Q19.

Capital Expenditure & Cash Flow

1Q20 1Q19 DPs. D%Interest Expense 37 60 (22) (37%)Interest (Income) (2) (5) 3 (56%)

Valuation Effects – Net 4 (49) 53 (107%)Exchange Rate (Gain) Loss – Net 272 (36) 308 (853%)

Total 311 (30) 341 (1,120%)


Indebtedness

As of March 31, 2020 and after successfully completing the debt restructuring, the Company reported a financial

debt of Ps.1,400 million at the end of the period (debt valued at face value and includes accured interest at the

end of the period). As previously mentioned, this restructuring allowed us to improve the debt profile and reduce

the interest expense burden, so the Financial Debt* to EBITDA ratio in the period was 6.2 times, while the Net

Debt to EBITDA ratio was 5.6 times.

Considering the effects of the accounting standard “IFRS 16” adoption, total debt amounted to Ps.1,906 million.

The Company's total Debt to EBITDA ratio including operating leases was 8.5 times, while Net Debt to EBITDA

ratio was 7.8 times. The increase in both ratios corresponds to the recognition of the present value of the total

operating leases and long-term contracts, that amounted to Ps. 506 million.

Stockholders´ Equity

At the end of 1Q20, the Company reported stockholders' equity of Ps. 971 million, which represents a decrease of

29% or Ps.388 million compared to that reported at the end of 2019. This is mainly explained by the net loss

registered in the period.

* Debt valued at face value plus accrued interest for the period without considering the amount of operating leases.

Capital Structure1Q20 1Q19

Subscribed and paid shares 276,471,081 144,471,081

Maxcom Financial Liabilities at March 31, 2020

Figures in Millions Pesos Dollars Total Pesos1 Due date Rate

Senior Notes 2024 - 56.9 1,336.9 October, 2024 8%2

Bancomext 15.0 - 15.0 September, 2020 9.86%3

Total financial debt 15.0 56.9 1,351.9 1 Considers the exchange rate to settle obligations at M arch 31, 2020: Ps$23.5122 per dollar

2 The Step-Up Senio r No tes bear interest (i) from the date of issuance (October 2019) until the maturity date, at the annual fixed rate of 8%

3 This loan was signed on October 2015 at 9.86% fixed interest rate

Face Value

3Q19 2Q19

Net Debt/LTM EBITDA 7.82 5.49 9.56 8.55

1Q20 4Q19


For more information contact:

Rodrigo Wright

México, D.F., México

(52 55) 4770-1170

[email protected]

About MAXCOM

MAXCOM Telecomunicaciones, S.A.B. de C.V., headquartered in Mexico City, is a facilities-based

telecommunications provider using a “smart-build” approach to deliver “last-mile” connectivity to enterprises and

residential customers in the Mexican territory. MAXCOM launched its commercial operations in May 1999 and is

currently offering local and long distance telephony services; wired, wireless and cellular data transmission and

value-added services in Mexico City metropolitan area, Monterrey, Puebla, Querétaro, León, Guadalajara, San Luis

Potosí, Tehuacán and Toluca, and on a selected basis in several cities in Mexico. The information contained in this

press release is the exclusive responsibility of Maxcom Telecomunicaciones, S.A.B. de C.V. and has not been

reviewed by the Mexican National Banking and Securities Commission (CNBV) or any other authority. The

registration of the securities described in this press release before the National Registry of Securities (Registro

Nacional de Valores) held by the CNBV, shall it be the case, does not imply any certification as to the investment

quality of the securities or of Maxcom’s solvency. The trading of these securities by an investor will be made under

such investor’s own responsibility.

This document may include forward-looking statements that are subject to risks, uncertainties and other factors

which could cause real results, performance or achievements to be materially different from any future results,

performance or achievements expressed or implied by such forward-looking statements. Words such as “estimate,”

“project,” “plan,” “believe,” “expect,” “anticipate,” “intend,” and similar expressions may identify such forward-looking

statements. Maxcom cautions readers that any forward-looking statement in this press release or made by the

Company’s management involves risks and uncertainties that may change based on various important factors not

under Maxcom’s control. These forward-looking statements represent Maxcom’s judgment as of the date of this

press release. Maxcom disclaims any intent or obligation to update these forward-looking statements.

Unless otherwise specified, all references to “USD$” are to United States dollars and references to “Ps.” are to

Mexican pesos. Amounts presented in this quarterly report may not add up or may be slightly inconsistent due to

rounding.


As of March 31, As of December 31,2020 2019 Var $ Var %

ASSETS:CURRENT ASSETS:Cash and financial instruments 148,793Ps. 312,508Ps. (163,715)Ps. (52%) Short-term restricted cash 20 20 - -

148,813 312,528 (163,715) (52%) Accounts receivable:

Customers, net of allowance 103,915Ps. 175,238Ps. (71,323)Ps. (41%) Recoverable value added tax 39,873 41,884 (2,011) (5%) Other sundry debtors 5,662 89126 (83,464) (94%) Accounts receivable from related parties 269 598 (329) (55%)

149,719 306,846 (157,127) (51%)

Inventory 871Ps. 918Ps. (47)Ps. (5%) Prepaid expenses 63,035 29,079 33,956 117%

Total current assets 362,438 649,371 (286,933) (44%)

Telephone network systems and equipment, net 2,141,697Ps. 2,186,831Ps. (45,134)Ps. (2%) Intangible assets, net 358,574 370,366 (11,792) (3%) Investment in associates 3,351 9,346 (5,995) (64%) Rights of use of leased assets, net 481,853 491,480 (9,627) (2%) Long-term restricted cash - - - 100% Deposits in guarantee 7,678 7,627 51 1% Deferred taxes 3,485 4,642 (1,157) (25%) Other accounts receivable of long term 12,518 32,899 (20,381) (62%)

3,009,156 3,103,191 (94,035) (3%)

Total assets 3,371,594Ps. 3,752,562Ps. (380,968)Ps. -10%

LIABILITIESCURRENT LIABILITIES:Bank loans 15,000Ps. 22,500 (7,500) (33%) Interest payable 48,420 16,525 31,895 193% Accounts payable and accrued expenses 275,185 526,546 (251,361) (48%) Leases 87,388 87,388 - - Deferred income 52,521 47,375 5,146 11% Customer deposits 1,020 1,032 (12) (1%) Other taxes payable 22,153 25,314 (3,161) (12%)

Total current liabilities 501,687 726,680 (224,993) (31%)

LONG-TERM LIABILITIES:Step-up senior notes 1,242,714Ps. 992,828Ps. 249,886Ps. 25% Leases 418,598 424,211 (5,613) (1%) Bank loans - - - 100% Deferred income 215,317 227,149 (11,832) (5%) Labor obligations 2,655 2,524 131 5% Other long-term liabilities 19,958 20,690 (732) (4%)

Long-term liabilities 1,899,242 1,667,402 231,840 14% Total liabilities 2,400,929Ps. 2,394,082Ps. 6,847Ps. 0%

SHAREHOLDERS' EQUITYCapital stock 1,874,155Ps. 1,874,155Ps. -Ps. - Capital stock not exhibited (23,201)Ps. (23,201)Ps. -Ps. - Stock issue premium 43,698 64,080 (20,382) (32%) Junior PIK Notes 354,087 354,087 - - Deficit (910,641) (879,675) (30,966) 4% Net profit (loss) for the period (367,433) (30,966) (336,467) 1,087% Other comprehensive income - - - 100%

Controlling interest 970,665 1,358,480 (387,815) (29%) Non-controlling interest - - - 100%

Total shareholders' equity 970,665Ps. 1,358,480Ps. (387,815)Ps. (29%)

Total liabitilies and shareholders' equity 3,371,594Ps. 3,752,562Ps. (380,968)Ps. (10%)

MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IFRS)

Thousands of Mexican Pesos (''Ps.'')


2020 % 2019 % $ var % var

TOTAL REVENUES 245,333Ps. 100% 377,405Ps. 100% (132,072)Ps. (35%)

Network operating services 83,796 34% 167,720 44% (83,924) (50%) Technical expenses 35,559 14% 38,460 10% (2,901) (8%) Installation expenses 266 0% 190 0% 76 40%

Network operation cost 119,621 49% 206,370 55% (86,749) (42%)

GROSS PROFIT 125,712 51% 171,035 45% (45,323) (26%)

Selling, general and administrative expenses 66,848 27% 98,407 26% (31,559) (32%)

EBITDA 58,864 24% 72,628 19% (13,764) (19%)

Depreciation and amortization 100,382 103,315 (2,933) (3%) Other (income) expense 7,795 8,351 (556) (7%)

Operating income (loss) (49,313) (39,038) (10,275) 26%

Comprehensive (income) cost of financing:Interest expense 37,416 59,579 (22,163) (37%) Interest (income) loss, net (1,993) (4,556) 2,563 (56%) Valuation effects, net 3,506 (49,400) 52,906 (107%) Exchange (income) loss, net 271,779 (36,075) 307,854 (853%)

310,708 (30,452) 341,160 (1,120%)

Investment in associates (5,995) - (5,995) -

INCOME (LOSS) BEFORE TAXES (366,016) (8,586) (357,430) 4,163%

Taxes:Income taxes 260 527 (267) (51%) Deferred taxes 1,157 - 1,157 -

Total taxes 1,417 527 890 169%

NET INCOME (LOSS) (367,433)Ps. (9,113)Ps. (358,320)Ps. 3,932%

Other comprehensive result - (4,605) 4,605 (100%)

COMPREHENSIVE NET INCOME (LOSS) (367,433)Ps. (13,718)Ps. (353,715)Ps. 2,578%

Controlling interest (367,433) 479 (367,912) (76,808%) Non-controlling interest - (9,592) 9,592 (100%)

NET INCOME (LOSS) (367,433)Ps. (9,113)Ps. (358,320)Ps. 3,932%

Average basic shares 276,471 144,471 Average diluted shares 285,752 146,521

Earnings per basic share (1.33) 0.00 Earnings per diluted share (1.29) 0.00


3 months ended March 31 vs 3M 2019

MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IFRS)


2020 2019 $ var % var

Operating Activities: Income (loss) before taxes (366,016)Ps. (8,590)Ps. (357,426)Ps. 4,161%

Items not requiring the use of cash 389,204 57,554 331,650 576% Cash flow form income (loss) before taxes 23,188 48,964 (25,776) (53%)

Cash flow from: Accounts receivable 75,319 (46,402) 121,721 (262%) Inventory 47 452 (405) (90%) Accounts payable (51,372) 32,043 (83,415) (260%) Other assets and liabilities 41,076 88,543 (47,467) (54%)

Cash flow from operating activities 65,070 74,636 (9,566) (13%)

Net cash flow from operating activities 88,258 123,600 (35,342) (29%)

Investing Activities: Telephone network systems and equipment, net (218,899) (62,849) (156,050) 248% Subsidiary Disincorporation - - - -

Net cash flow used in investing activities (218,899) (62,849) (156,050) 248%

Financing Activities: Bank loans (7,500) (7,500) - - Senior notes - (104,559) 104,559 (100%) Debt Restructuring Expenses - - - - Leases (25,574) (23,417) (2,157) 9% Increase of non-controlling interest - - - - Capital stock - - - - Other financing activities - 4,216 (4,216) (100%)

Net cash flow from financing activities (33,074) (131,260) 98,186 (75%)

Increase (decrease) in cash and financial instruments (163,715) (70,509) (93,206) 132%

Cash and financial instruments at beginning of period 312,528 456,544 (144,016) (32%)

Cash and financial instruments at end of period 148,813Ps. 386,035Ps. (237,222)Ps. (61%)

3 months ended March 31

MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENT OF CASH FLOW (IFRS)


vs 3M 2019

First Quarter 2020 Results Important notice: In compliance with provision 4.033.01 and other applicable provisions of the internal regulations of the Mexican Stock Exchange (“MSE”), regarding the “Independent Analyst”, Maxcom

Telecomunicaciones S.A.B. de C.V. attests that its share, which is listed on the MSE (Maxcom A) and on the OTCB (MXMTY) thus the Company will not request nor has requested registration to the program “Independent Analyst”, likewise Maxcom complies with all applicable regulations of the MSE and the National Banking and Securities Commission.

Capital Additional Other TotalCapital stock paid-in Junior Accumulated comprehensive Controlling Non-controlling shareholders'stock not exhibited capital PIK Notes losses income interest interest equity

Balances as of December 31, 2018 1,533,254Ps. (12,300)Ps. 50,170Ps. -Ps. (896,015)Ps. 4,475Ps. 679,584Ps. 61,624Ps. 741,208Ps. Comprehensive net loss - - - - 479 (4,605) (4,126) (9,592) (13,718)

Balances as of March 31, 2019 1,533,254Ps. (12,300)Ps. 50,170Ps. -Ps. (895,536)Ps. (130)Ps. 675,458Ps. 52,032Ps. 727,490Ps.

Capital Additional Other TotalCapital stock paid-in Junior Accumulated comprehensive Controlling Non-controlling shareholdersstock not exhibited capital PIK Notes losses income interest interest equity

Balances as of December 31, 2019 1,874,155Ps. (23,201)Ps. 64,080Ps. 354,087Ps. (910,641)Ps. -Ps. 1,358,480Ps. -Ps. 1,358,480Ps. Stock option plan - - (20,382) - - - (20,382) - (20,382) Comprehensive net loss - - - - (367,433) - (367,433) - (367,433)

Balances as of March 31, 2020 1,874,155Ps. (23,201)Ps. 43,698Ps. 354,087Ps. (1,278,074)Ps. -Ps. 970,665Ps. -Ps. 970,665Ps.


MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (IFRS)

Maxcom Telecomunicaciones, S.A.B de C.V. - Amazon S3

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