FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2024

NOTE 22 – FINANCIAL INSTRUMENTS

Categories of financial assets and financial liabilities

The following tables set out, for financial assets and liabilities as of December 31, 2024 and 2023 their category of financial instrument and the details of profits and losses generated according to each category.


				Fair value
				accounted		accounted
				through		through other
		Amortized		profit or		comprehensive
As of December 31, 2024		cost		loss		income		Total
Assets
Cash and cash equivalents		276,530		111,711		—		388,241
Investments		25,164		15,797		—		40,961
Trade receivables		361,537		—		—		361,537
Other receivables		19,976		4,264		—		24,240
Total		683,207		131,772		—		814,979
Liabilities
Trade payables		562,462		—		—		562,462
Borrowings		3,510,186		—		—		3,510,186
Leases liabilities		259,758		—		—		259,758
Other liabilities		19,857		1,517		—		21,374
Total		4,352,263		1,517		—		4,353,780


			Fair value
				accounted		accounted
				through		through other
		Amortized		profit or		comprehensive
As of December 31, 2023		cost		loss		income		Total
Assets
Cash and cash equivalents		336,023		88,333		—		424,356
Investments		32,163		297,095		—		329,258
Trade receivables		353,564		—		—		353,564
Other receivables		57,406		27		5,276		62,709
Total		779,156		385,455		5,276		1,169,887
Liabilities
Trade payables		950,222		—		—		950,222
Borrowings		5,652,100		—		—		5,652,100
Leases liabilities		235,438		—		—		235,438
Other liabilities		38,102		4,231		—		42,333
Total		6,875,862		4,231		—		6,880,093

Gains and losses by category – Year 2024


	Net gain/(loss)	Of which interest
Financial assets at amortized cost	(44,244)	48,775
Financial liabilities at amortized cost	1,990,591	(162,873)
Financial assets at fair value through profit or loss	(55,384)	—
Financial liabilities at amortized cost through profit or loss	(496)	—
Total	1,890,467	(114,098)

Gains and losses by category – Year 2023


	Net gain/(loss)	Of which interest
Financial assets at amortized cost	167,847	65,929
Financial liabilities at amortized cost	(2,013,473)	(58,808)
Financial assets at fair value through profit or loss	235,771	170,840
Financial liabilities at amortized cost through profit or loss	(82,697)	—
Total	(1,692,552)	177,961

Gains and losses by category – Year 2022


		Net gain/(loss)		Of which interest
Financial assets at amortized cost		48,188		37,757
Financial liabilities at amortized cost		169,877		(137,470)
Financial assets at fair value through profit or loss		(79,275)		(6,064)
Financial liabilities at fair value through profit or loss		(45,770)		—
Total		93,020		(105,777)

Fair value hierarchy and other disclosures

The Company presents the judgments and estimates made to determine the fair values of the financial instruments that are recognized and measured at fair value in its recast consolidated financial statements.

The measurement at fair value of the financial instruments of Telecom are classified according to the three levels set out in IFRS 13:

-	Level 1: Fair value determined by quoted prices (unadjusted) in active markets for identical assets or liabilities.

-	Level 2: Fair value determined based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (e.g., as prices) or indirectly (e.g., derived from prices).

-	Level 3: Fair value determined by unobservable inputs where the reporting entity is required to develop its own assumptions.

Financial assets and liabilities recognized at fair value as of December 31, 2024 and 2023, and the level of hierarchy are listed below:


As of December 31, 2024		Level 1		Level 2		Total
Assets
Current Assets
Mutual Funds (1) (2)		113,621		—		113,621
Government bonds (1) (2)		13,887		—		13,887
Other receivables: Compensation received for company acquisitions (3)		—		1,316		1,316
Non-current Assets
Other receivables: Compensation received for company acquisitions (3)		—		2,948		2,948
Total assets		127,508		4,264		131,772
Liabilities
Current Liabilities
Other liabilities: Debt for acquisition of NYSSA (3)		—		784		784
Non-current Liabilities
Other liabilities: Debt for acquisition of NYSSA (3)		—		733		733
Total liabilities		—		1,517		1,517


As of December 31, 2023	Level 1	Level 2	Total
Assets
Current Assets
Mutual Funds (1) (2)	38,314	—	38,314
Government bonds (1) (2)	347,113	—	347,113
Other receivables: DFI (4)	—	4,115	4,115
Other receivables: Indemnification assets (3)	—	27	27
Non-current Assets
Other receivables: DFI (4)	—	1,161	1,161
Total assets	385,427	5,303	390,730
Liabilities
Current Liabilities
Other liabilities: Debt for acquisition of NYSSA (3)	—	1,506	1,506
Non-current Liabilities
Other liabilities: Debt for acquisition of NYSSA (3)	—	2,725	2,725
Total liabilities	—	4,231	4,231

(1)	The Mutual funds are included in Cash and cash equivalents and Investments. The Government bonds are included in Cash and cash equivalents and Investments.

(2)	The fair value is based on information obtained from active markets and corresponds to quoted market prices as of year-end. A market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

(3)	The fair value was determined by the variation between the quoted values of certain public securities in foreign currency and Argentine pesos.

(4)

The fair value of financial instruments that are not negotiated in active markets is determined using valuation techniques. These valuation techniques maximize the use of market observable information, when available, and rely as little as possible on specific estimates of the Company. The techniques used for the measurement of financial instruments, are detailed below: a) DFI for forward purchases of US dollars and RMB, corresponds to the variation between the market prices at the end of the fiscal year and the time of agreement and; b) DFI interest rate swap corresponds to the present value of estimated future cash flows based on observable yield curves obtained in the market.

During the years ended December 31, 2024 and 2023, there were no transfers between Levels of the fair value hierarchy.

Additionally, the methods and assumptions used to estimate the fair values of each class of financial instrument are as follows:

Trade receivables and Other receivables: Carrying amounts are considered to approximate fair value due to the short term nature of these receivables. Noncurrent trade receivables have been recognized at their amortization cost, using the effective interest method and are not significant.

Trade payables and Other liabilities: The carrying amount of trade payables and other liabilities to approximates its fair value due to the short term nature of these debts. Noncurrent trade payables and other liabilities have been discounted.

Borrowings

As of December 31, 2024, fair value of borrowings is as follows:


		Carrying Value		Fair Value

Notes		2,940,467		2,740,233
Other borrowings		569,719		570,963
		3,510,186		3,311,196

As of December 31, 2023, fair value of borrowings is as follows:


		Carrying Value		Fair Value

Notes		3,468,020		3,214,025
Other borrowings		2,184,080		2,200,601
		5,652,100		5,414,626

The fair value of the loans was assessed as follows:

The fair value of Notes traded in active markets was measured based on quoted market prices at the end of the reporting period. As a result, its valuation classifies as Level 1.

The fair value of Notes that are not traded in an active market was measured based on quotes provided by first-tier financial entities, so their valuation qualifies as Level 2.

Fort the rest of the borrowings, the fair values were calculated based on cash flows discounted using a current lending rate, so as they are classified as level 3.

Hedge accounting

Derivatives are used by Telecom and its subsidiaries to manage their exposure to exchange rate and interest rate risks.

The position of DFIs in the consolidated statements of financial position and amounts recognized in Consolidated Income Statements and Consolidated Statements of Comprehensive Income, are detailed below:


	As of December 31,
		2024	2023
Other receivables current - DFI: SOFR		—	4,115
Other receivables noncurrent - DFI: SOFR		—	1,161
Total assets		—	5,276


	Years ended December 31,
		2024	2023	2022

		Profit (loss)
Foreign currency exchange effect		3,653	21,067	(12,860)
Interests on borrowings		(3,350)	(3,299)	(1,216)
Financial results		303	17,768	(14,076)
DFI effects classified as hedges		(7,212)	3,487	5,027
Other comprehensive income (loss)		(7,212)	3,487	5,027

●

Interest rate swaps – cash flow hedges

In August 2024, the Company cancelled the several DFI agreements, to hedge the fluctuation of SOFR from the IFC loan signed on June 28, 2022, for its total amount, for the period beginning February 15, 2023 to August 15, 2025. The agreements entered into covered a total amount of US$184.5 million. The interest rates were set at 3.605%, 3.912% and 3.895%, respectively.

In September 2022, the several DFI agreements were finalized to hedge the fluctuation of LIBOR from the IFC loan amounting to US$400 million and from the IIC loan amounting to US$100 million. The mentioned agreements hedged a total amount of US$440 million. Such DFI allows fixing the variable rate in a range between 2.085% and 2.4525% nominal annual rate.

●

Exchange rate Hedges

During year ended December 31, 2024, Telecom Argentina entered into several DFI agreements to hedge the fluctuation of the exchange rate from its loan portfolio amounting to US$50 million fixing the average exchange rate in 1,004 Argentine pesos/US$, expiring between July and August 2024.

During year ended December 31, 2023, Telecom Argentina entered into several DFI agreements to hedge the fluctuation of the exchange rate from its loan portfolio amounting to US$752 million fixing the average exchange rate in 279.8 Argentine pesos/US$, expiring between February 2023 and November 2023. Additionally, entered into one DFI agreement to RMB20 million fixing the average exchange rate in 37 Argentine pesos/RMB, $, expiring in May 2023 and July 2023.

During year ended December 31, 2022, Telecom Argentina entered into several DFI agreements to hedge the fluctuation of the exchange rate from its loan portfolio amounting to US$262 million fixing the average exchange rate in 166.1 Argentine pesos/US$, expiring between February 2022 and June 2023. Additionally, on December 2022, entered into one DFI agreement to RMB15 million fixing the average exchange rate in 27.8 Argentine pesos/RMB, expiring in January 2023.

Offsetting of financial assets and financial liabilities

Telecom and its subsidiaries offset the financial assets and liabilities to the extent that such offsetting is provided by offsetting agreements and provided that Telecom has the intention to make such offsetting. The main financial assets and liabilities offset correspond to transactions with other national and foreign operators including interconnection, carriers and Roaming (being offsetting a standard practice in the telecommunications industry at the international level that Telecom and its subsidiaries applies regularly). Offsetting is also applied to transactions with agents.

The following table presents financial assets and liabilities that are offset as of December 31, 2024 and 2023:


	As of December 31, 2024
	Trade	Other		Other
	receivables	receivables	Trade payables	liabilities
Current and noncurrent assets (liabilities) - Gross value	381,583	28,573	(582,508)	(25,707)
Offsetting	(20,046)	(4,333)	20,046	4,333
Current and noncurrent assets (liabilities) – Carrying Value	361,537	24,240	(562,462)	(21,374)


	As of December 31, 2023
	Trade	Other		Other
	receivables	receivables	Trade payables	liabilities
Current and noncurrent assets (liabilities) - Gross value	372,905	65,025	(969,564)	(44,649)
Offsetting	(19,341)	(2,316)	19,342	2,316
Current and noncurrent assets (liabilities) – Carrying Value	353,564	62,709	(950,222)	(42,333)