================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of April, 2005
GRUPO IUSACELL, S.A. de C.V.
-----------------------------------------------
(Translation of registrant's name into English)
Montes Urales 460
Col. Lomas de Chapultepec, Deleg. Miguel Hidalgo
11000, Mexico D.F.
------------------------------------------------
(Address of principal executive office)
Indicate by check mark whether the registrant files or will fill annual reports
under cover of Form 20-F or Form 40-F: Form 20-F [X] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g-3-2(b) under the Securities and Exchange Act of
1934. Yes [ ] No [X]
================================================================================
Documents Furnished By the Registrant
1. Press Release of the Registrant dated April 22, 2005
FIRST QUARTER 2005 RESULTS 2
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GRUPO IUSACELL, S.A. DE C.V.
Date: April 22, 2005 /s/ Fernando Cabrera
-----------------------
Name: Fernando Cabrera
Title: Attorney in fact
/s/ Jose Luis Riera
-----------------------
Name: Jose Luis Riera
Title: Attorney in fact
FIRST QUARTER 2005 RESULTS 3
[LOGO OF IUSACELL] INVESTOR CONTACTS
Pensamos en ti
Jose Luis Riera K.
Chief Financial Officer
5109-5927
J. Victor Ferrer V.
Finance Manager
5109-5273
vferrer@iusacell.com.mx
FIRST QUARTER 2005 RESULTS
MEXICO CITY, April 22, 2005 - Grupo Iusacell, S.A. de C.V. (NYSE: CEL) (BMV:
CEL) (Iusacell or the Company) today announced unaudited financial results for
the first quarter 2005/1/.
Grupo Iusacell showed a 21.6% increase in revenues, from Ps. 1,096 million in
the first quarter of 2004 to Ps. 1,333 million in the first quarter of 2005.
During the same period, operating income before depreciation and amortization
increased 92.9%, to Ps. 267 million, in comparison with the Ps. 138 million
recorded in the same period the year before.
Grupo Iusacell closed the first quarter of 2005 with 1.55 million subscribers.
Highlights:
Million of Pesos/2/, except percentages
1Q 1Q Change
2004 2005 %
-------- -------- --------
Revenue (net of commissions) 1,096 1,333 21.6%
Total Cost 711 659 -7.3%
Total Operating Expenses 247 407 64.9%
Operating Income before Depreciation and
amortization 138 267 92.9%
Net Loss (361) (365) 1.0%
----------
/2/ Constant March 31,2005 pesos.
The 21.6% increase in revenues was primarily due to: (1) an increase in postpaid
revenues as a result of an increase in minutes of use per subscriber, (2) an
increase in revenues from airtime and value-added services, (3) a net increase
of approximately 255,000 subscribers as compared to the first quarter of 2004,
and (4) revenues derived from exchange of capacity services provided to Unefon.
--------
/1/ Unless otherwise noted, all monetary figures are expressed in Mexican pesos
as of March 31, 2005 in accordance to Mexican GAAP. The symbols "Ps$" and "US$"
refer to Mexican pesos and U.S. dollars, respectively.
FIRST QUARTER 2005 RESULTS 4
Our total costs for the first quarter of 2005 decreased by 7.3% to Ps. 659
million compared to the Ps. 711 million recorded for the same period in the
prior year. This decrease was primarily due to a reduction in the cost of
handset subsidies resulting from a change in accounting policy regarding the
recognition of postpaid subsidies, as more fully explained below.
Operating expenses during the first quarter of 2005 were Ps. 407 million, an
increase of 64.9% as compared to the first quarter of 2004. This increase was
mainly due to (1) an increase in personnel expenses due to the establishment of
regional sales and customer service structures in line with our strategy of
providing the best service to our clients, (2) an increase in advertising costs
due to the launching of new products and special promotions, (3) an increase in
external personnel expenses related to the opening of new distribution channels,
and (4) an increase in doubtful receivables reserves.
Iusacell recorded an operating income before depreciation and amortization in
the first quarter of 2005 of Ps. 267 million, a 92.9% increase as compared to
the Ps. 138 million recorded in the first quarter of 2004. This increase was
primarily due to the increase in revenues and decrease in costs described above.
The net loss of Ps. 365 million recorded in the first quarter of 2005
represented a slight increase when compared to the net loss of Ps. 361 million
recorded in the same period the year before. This increase was primarily due to
a Ps. 179 million increase in comprehensive financing cost due to a reduction in
net monetary gain and a foreign exchange loss, offset by an increase in the
operating incomer berfore depreciation and amortization and a reduction in the
depreciation and amortization.
During the first quarter of 2005, the Company made investments of approximately
US$15 million, used primarily to expand the coverage and capacity of its 3-G
network.
RECENT EVENTS
CHANGES IN ACCOUNTING POLICIES
Beginning with the first quarter of 2005, the Company has made the following
changes to its accounting policies:
1. Sales commissions not directly related to the activation of handsets are
reclassified, and are now presented as a deduction in gross revenues instead of
being recorded as sales expenses as was previously done. The purpose of this
change is to match revenues directly with the costs that give rise to such
revenues.
2. Income from the sale of fixed assets is reclassified and is now presented
after operating income before depreciation and amortization. We consider that
this item should not affect operating income as it is derived from an activity
that is not part of the Company's core business.
3. The net cost of the handset subsidy (which is sales price, less cost of
sale, commissions related to the activation and other costs) is presented as a
single item, with the following alternatives:
i. The subsidy for postpaid handsets is deferred at the time of activation and
is amortized on a straight-line based on the life of the contract with the
client. In the past, the subsidy was recognized in the income statement at the
time the handset was delivered to the client.
ii. The policy related to the subsidy for prepay handsets has not changed, it
continues being recognized in the income statement at the time the handset is
delivered to the client .
FIRST QUARTER 2005 RESULTS 5
Iusacell received from the Mexican Federal Telecommunicactions Commission
(COFETEL) the results of the auction of PCS frequencies
Grupo Iusacell, through its subsidiary Iusacell PCS de Mexico, was allocated by
the COFETEL 10 MHZ in the PCS regions 2, 3, 5, 6, 7, 8 and 9.
DEBT RESTRUCTURING
The Company continues negotiations with several of its creditors, seeking to
obtain a comprehensive restructuring agreement as soon as possible.
* * * * * * * * * *
ABOUT IUSACELL
Grupo Iusacell, S.A. de C.V. (Iusacell, NYSE and BMV: CEL) is a wireless
cellular and PCS service provider in Mexico encompassing a total of
approximately 92 million POPs, representing approximately 90% of the country's
total population. Independent of the negotiations towards the restructuring of
its debt, Iusacell reinforces its commitment with customers, employees and
suppliers and guarantees the highest quality standards in its daily operations
offering more and better voice communication and data services through
state-of-the-art technology, such as its new 3G network, throughout all of the
regions in which it operate.
LEGAL DISCLAIMER
Grupo Iusacell, S.A. de C.V. quarterly reports and all other written materials
may from time to time contain statements about expected future events and
financial results that are forward-looking and subject to risks and
uncertainties. For those statements, the Company claims the protection of the
safe harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Discussion of factors that may affect future
results is contained in our filings with the Securities and Exchange Commission.
Attached are the Consolidated Income Statements of each of Grupo Iusacell, S.A.
de C.V. and Grupo Iusacell Celular, S.A. de C.V. for the three-month March 31,
2005, and the Consolidated Balance Sheet of Grupo Iusacell, S.A. de C.V. and
Grupo Iusacell Celular, S.A. de C.V. at March 31, 2005.
FIRST QUARTER 2005 RESULTS 6
GRUPO IUSACELL CONSOLIDATED BALANCE SHEET
COMPARISON OF FIRST QUARTER 2005 WITH FIRST QUARTER 2004
(figures in thousands of constant March 31, 2005 Pesos)
GROWTH
1Q04 1Q05 1Q05 / 1Q04
----------------------- --------------------- -----------
ASSETS
Current Assets
Cash and marketable securities 3,224 0% 3,289 0% 2.0%
Accounts receivable, net 596,526 5% 343,882 3% -42.4%
Related parties 92,382 1% 112,378 1% 100.0%
Recoverable taxes and other 246,985 2% 488,235 5% 97.7%
Inventories 295,576 2% 154,533 1% -47.7%
TOTAL CURRENT ASSETS 1,234,693 10% 1,102,317 10% -10.7%
Property and equipment, net 7,813,248 64% 6,859,353 63% -12.2%
Excess of cost of investments in subsidiaries
over book value, net 1,979,139 16% 1,810,908 17% -8.5%
Other assets 1,138,988 9% 1,063,352 10% -6.6%
TOTAL ASSETS 12,166,068 100% 10,835,930 100% -10.9%
LIABILITIES AND
SHAREHOLDERS'EQUITY
Current Liabilities
Accrued liabilities 1,679,358 14% 2,962,757 27% 76.4%
Related parties 54,180 0% 241,731 2% 346.2%
Accounts payable 588,862 5% 299,230 3% -49.2%
Short-term debt 9,239,930 76% 8,849,659 82% -4.2%
TOTAL CURRENT LIABILITIES 11,562,330 95% 12,353,377 114% 6.8%
Noncurrent liabilities 96,872 1% 25,241 0% -73.9%
TOTAL LIABILITIES 11,659,202 96% 12,378,618 114% 6.2%
Minority interest -43,256 0% -89,934 -1% 107.9%
Shareholders' Equity
Capital stock 7,872,256 65% 7,878,374 73% 0.1%
Legal reserve 22,125 0% 22,125 0% 0.0%
Capital contributions 1,549,145 13% 1,549,145 14% 0.0%
Net income (loss) -361,126 -3% -364,846 -3% 1.0%
Accumulated earnings from prior years -8,761,772 -72% -10,767,046 -99% 22.9%
Excess from restatement of shareholders's
equity 229,494 2% 229,494 2% 0.0%
TOTAL SHAREHOLDERS' EQUITY 550,122 5% -1,452,754 -13% -364.1%
TOTAL LIABILITIES AND
SHAREHOLDERS'S EQUITY 12,166,068 100% 10,835,930 100% -10.9%
FIRST QUARTER 2005 RESULTS 7
GRUPO IUSACELL CONSOLIDATED INCOME STATEMENT
COMPARISON OF FIRST QUARTER 2005 WITH FIRST QUARTER 2004
(figures in thousands of constant March 31, 2005 Pesos)
GROWTH
1Q04 1Q05 1Q05 / 1Q04
----------------------- --------------------- -----------
REVENUE
Service 1,201,338 109.6% 1,434,320 107.6% 19.4%
Commissions (105,250) -9.6% (101,341) -7.6% -3.7%
NET REVENUE 1,096,088 100.0% 1,332,979 100.0% 21.6%
Cost of services 459,006 41.9% 583,048 43.7% 27.0%
Handsets subsidy 252,048 23.0% 76,132 5.7% -69.8%
TOTAL COSTS 711,054 64.9% 659,180 49.5% -7.3%
GROSS PROFIT 385,034 35.1% 673,799 50.5% 75.0%
Sales & advertising expenses 173,730 15.9% 281,098 21.1% 61.8%
General and administrative expenses 72,890 6.7% 125,701 9.4% 72.5%
TOTAL OPERATING EXPENSES 246,620 22.5% 406,799 30.5% 64.9%
OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION 138,414 12.6% 267,000 20.0% 92.9%
Depreciation and amortization 517,674 47.2% 384,997 28.9% -25.6%
OPERATING LOSS (379,260) -34.6% (117,997) -8.9% -68.9%
(Profit) loss from fixed assets sales (99,216) -9.1% 169 0.0% -100.2%
Other (income) expense - 0.0% 32,396 2.4% 100.0%
Interest expense, net 256,721 23.4% 265,370 19.9% 3.4%
Foreign exchange loss (gain) (54,565) -5.0% 19,728 1.5% -136.2%
Gain from monetary position (179,302) -16.4% (83,110) -6.2% -53.6%
INTEGRAL FINANCING COST 22,854 2.1% 201,988 15.2% 783.8%
LOSS BEFORE TAXES (302,898) -27.6% (352,550) -26.4% 16.4%
Equity participation in net loss
(income) of subsidiaries 25 0.0% - 0.0% -100.0%
Taxes 57,913 5.3% 13,678 1.0% -76.4%
LOSS BEFORE MINORITY INTEREST (360,836) -32.9% (366,228) -27.5% 1.5%
Minority interest 290 0.0% (1,382) -0.1% -576.6%
NET LOSS (361,126) -32.9% (364,846) -27.4% 1.0%
FIRST QUARTER 2005 RESULTS 8
GRUPO IUSACELL CELULAR CONSOLIDATED BALANCE SHEET
COMPARISON OF FIRST QUARTER 2005 WITH FIRST QUARTER 2004
(figures in thousands of constant March 31, 2005 Pesos)
GROWTH
1Q04 1Q05 1Q05 / 1Q04
----------------------- --------------------- -----------
ASSETS
Current Assets
Cash and marketable securities 2,288 0% 1,532 0% -33.0%
Accounts receivable, net 588,736 6% 344,543 4% -41.5%
Related parties 265,880 2% 287,904 3% 8.3%
Recoverable taxes and other 247,454 2% 426,204 4% 72.2%
Inventories 295,576 3% 154,533 2% -47.7%
TOTAL CURRENT ASSETS 1,399,934 13% 1,214,716 13% -13.2%
Property and equipment, net 7,006,911 66% 6,291,560 66% -10.2%
Excess of cost of investments in subsidiaries
over book value, net 1,784,825 17% 1,626,000 17% -8.9%
Other assets 466,287 4% 440,385 5% -5.6%
TOTAL ASSETS 10,657,957 100% 9,572,661 100% -10.2%
LIABILITIES AND SHAREHOLDERS'EQUITY
Current Liabilities
Accrued liabilities 627,569 6% 1,343,156 14% 114.0%
Related parties 85,165 1% 242,744 3% 185.0%
Accounts payable 492,647 5% 271,760 3% -44.8%
Short-term debt 4,847,226 45% 4,642,492 48% -4.2%
TOTAL CURRENT LIABILITIES 6,052,607 57% 6,500,152 68% 7.4%
Noncurrent liabilities 690 0% 479 0% -30.6%
TOTAL LIABILITIES 6,053,297 57% 6,500,631 68% 7.4%
Minority interest -43,256 0% -89,934 -1% 107.9%
Shareholders' Equity
Capital stock 17,559,214 165% 17,559,214 183% 0.0%
Legal reserve 31,266 0% 31,266 0% 0.0%
Capital contributions 108,191 1% 108,191 1% 0.0%
Net income (loss) -271,117 -3% -323,284 -3% 19.2%
Accumulated earnings from prior
years -12,004,893 -113% -13,438,678 -140% 11.9%
Excess from restatement of
shareholder's equity -774,745 -7% -774,745 -8% 0.0%
TOTAL SHAREHOLDERS' EQUITY 4,647,916 44% 3,161,964 33% -32.0%
TOTAL LIABILITIES AND
SHAREHOLDERS'S EQUITY 10,657,957 100% 9,572,661 100% -10.2%
FIRST QUARTER 2005 RESULTS 9
GRUPO IUSACELL CELULAR CONSOLIDATED INCOME STATEMENT
COMPARISON OF FIRST QUARTER 2005 WITH FIRST QUARTER 2004
(figures in thousands of constant March 31, 2005 Pesos)
GROWTH
1Q04 1Q05 1T05 / 1T04
----------------------- --------------------- -----------
REVENUE
Service 1,241,850 109.3% 1,456,771 107.5% 17.3%
Commissions (105,250) -9.3% (101,341) -7.5% -3.7%
NET REVENUE 1,136,600 100.0% 1,355,430 100.0% 19.3%
Cost of services 465,594 41.0% 722,748 53.3% 55.2%
Handsets subsidy 252,048 22.2% 76,132 5.6% -69.8%
TOTAL COSTS 717,642 63.1% 798,880 58.9% 11.3%
GROSS PROFIT 418,958 36.9% 556,550 41.1% 32.8%
Sales & advertising expenses 173,280 15.2% 280,816 20.7% 62.1%
General and administrative expenses 69,569 6.1% 121,188 8.9% 74.2%
TOTAL OPERATING EXPENSES 242,849 21.4% 402,004 29.7% 65.5%
OPERATING INCOME BEFORE DEPRECIATION AND
AMORTIZATION 176,109 15.5% 154,546 11.4% -12.2%
Depreciation and amortization 477,332 42.0% 348,428 25.7% -27.0%
OPERATING LOSS (301,223) -26.5% (193,882) -14.3% -35.6%
(Profit) loss from fixed assets sales (71,613) -6.3% 169 0.0% -100.2%
Other (income) expense - 0.0% 32,399 2.4% 100.0%
Interest expense, net 95,722 8.4% 110,138 8.1% 15.1%
Foreign exchange loss (gain) (21,091) -1.9% 9,495 0.7% -145.0%
Gain from monetary position (85,684) -7.5% (34,928) -2.6% -59.2%
INTEGRAL FINANCING COST (11,053) -1.0% 84,705 6.2% -866.4%
LOSS BEFORE TAXES (218,557) -19.2% (311,155) -23.0% 42.4%
Equity participation in net loss (income)
of subsidiaries 25 0.0% - 0.0% -100.0%
Taxes 52,245 4.6% 13,511 1.0% -74.1%
LOSS BEFORE MINORITY INTEREST (270,827) -23.8% (324,666) -24.0% 19.9%
Minority interest 290 0.0% (1,382) -0.1% -576.6%
NET LOSS (271,117) -23.9% (323,284) -23.9% 19.2%
FIRST QUARTER 2005 RESULTS 10