MOSCOW, August 18, 2015 /PRNewswire/ --
Mobile TeleSystems PJSC
("MTS" - NYSE: MBT), the leading
telecommunications provider in Russia and the CIS, today announces its
unaudited IFRS financial results for the three months ended
June 30,
2015.
Key Financial Highlights of Q2 2015
- Consolidated group revenue increased 3.9% y-o-y to RUB 102.7 bln
- Total revenue in Russia rose
4.4% y-o-y to RUB 94.3 bln
- Mobile service revenue in Russia improved 2.8% y-o-y to RUB 72.7 bln
- Data traffic revenue in Russia
grew 23.4% y-o-y to RUB 18.9 bln
- Handset sales increased 26.7% y-o-y to RUB 7.6 bln
- Group OIBDA down 2.1% to RUB 42.7
bln
- OIBDA in Russia rose 2.2%
y-o-y to RUB 41.2 bln
- MTS reaffirms its Group guidance:
- Group revenue growth of more than 2%
- Revenue growth in MTS Russia more than 3%
- Group OIBDA margin of more than 40%
- MTS revises its FY2015 CAPEX guidance to RUB 92 bln to reflect planned investments in 3G
network development in Ukraine
Key Corporate and Industry Highlights
- Signed a USD 200 mln equivalent
term loan facility agreement with China Development Bank
Corporation ("CDB") in renminbi and US dollars
- Completed dividend payment of RUB
19.56 per ordinary MTS share (RUB
39.12 per ADR), or a total of RUB
40.419 bln based on the full-year 2014 financial
results
- Semi-annual dividend recommendation by the MTS Board of
RUB 5.61 per ordinary MTS share
(RUB 11.22 per ADR), or a total of
RUB 11.592 bln based on H1 2015
financial results
- Signed binding agreements to acquire 100% of the shares of
NVision Group JSC, the developer and owner of the MTS billing
system and one of the largest system integrators and complex IT
solutions providers in Russia, for
a total enterprise value up to RUB 15
billion, including debt
Commentary
Mr. Andrei Dubovskov, MTS
President and CEO, commented, "In Q2 2015, we delivered Group
revenue growth of 3.9% to RUB 102.7
bln. Data adoption continues to drive growth in Russia and other markets, while recent changes
in our approach to distribution have helped boost handset revenue.
Adjusted OIBDA fell year-over-year to RUB
42.7 bln. Our OIBDA margin came in at 41.6%. This reduction
from last year is due largely to a lower contribution from our
Ukraine business given the
cessation of operations in Crimea, ongoing turbulence in the East
of Ukraine and hryvna devaluation,
as well as to costs related to our re-launch in Uzbekistan."
Mr. Vasyl Latsanych, MTS Vice
President for Marketing, said, "For the quarter, total revenue in
Russia grew to RUB 94.3 bln rubles or 4.4% year-over-year. Our
service revenue grew by 2.8% year-over-year to RUB 72.7 bln driven by a 23.4% increase in data
traffic revenues and strong subscriber additions. The growth was
boosted by rising smartphone penetration, which reached nearly 45%
of the active base. In spite of a slowdown in retail markets, we
saw a surge in sales of smartphones in our retail stores following
our decision to reduce to further drive data penetration. This
initiative is a part of our efforts to enhance our mobile market
share by driving foot-traffic to our stores in light of the recent
changes in the mobile retail landscape in Russia."
Mr. Alexey Kornya, MTS Vice
President for Finance and Investments, said, "In Russia, OIBDA came
in at RUB 41.2bln, or 2.2% above Q2
2014. Quarter-over-quarter, OIBDA increased 8.1%, or over twice the
pace of revenue growth. While stronger roaming revenues and
increase in prices of international calling did contribute to the
growth, we also saw OIBDA expansion due to lower dealer commissions
as we implement our new retail strategy. Another factor pressuring
margins is our increase in handset sales, which translated to a 0.9
percentage point decline in OIBDA margin year-over-year. Group net
profit improved during the quarter by 57% to RUB 17.1 bln. Our bottom line was boosted by
revenue and OIBDA dynamics, as well as a non-cash RUB 3.6 bln FOREX gain on the value of our
non-ruble denominated debt."
Mr. Andrei Dubovskov concluded,
"As our Q2 results clearly demonstrate, we were able to sustain the
market-leading pace of service revenue growth by increasing
high-quality customer additions in our controlled sales channel in
spite of changes in distribution in Russia. Given the solid performance in the
first half of the year, we believe we are fully on track to meet
our annual guidance of the Group revenue growth of at least 2%,
revenue growth in Russia of at
least 3% and Group OIBDA margin of at least 40%. While we do see
upside to revenue performance, we believe it is prudent to
reiterate the guidance in light of the uncertain macroeconomic
environment and sustained currency volatility in our markets of
operation."
Additional Information
MTS continues to see sustained macroeconomic volatility in its
markets of operations that may impact the financial and operational
performance throughout the Group.
MTS affirms that the alleged activities related to MTS's
business in Uzbekistan have been
referenced in a civil forfeiture complaint, filed by US Department
of Justice (DOJ) in the U.S. District Court, Southern District of
New York (Manhattan), directed at certain assets of an
unnamed Uzbek government official. The Complaint alleges among
other things that MTS and certain other parties made corrupt
payments to the unnamed Uzbek official to assist their entrance and
operations in the Uzbekistan
telecommunications market. The Complaint is solely directed towards
assets held by the unnamed Uzbek official, and none of MTS's assets
are affected by the Complaint.
As MTS disclosed in March 2014,
both the US Securities and Exchange Commission (SEC) and DOJ are
currently conducting an investigation related to MTS's former
operations in Uzbekistan. As
previously disclosed, the Company has received requests for
documents and information from both the SEC and DOJ and continues
to cooperate with these investigations in good faith.
This press release provides a summary of some of the key
financial and operating indicators for the period ended
June 30, 2015. For full
disclosure materials, please visit
http://www.mtsgsm.com/resources/reports/.
* * *
Learn more about MTS. Visit the official blog of the Investor
Relations Department at http://www.mtsgsm.com/blog/ and follow us
on Twitter: JoshatMTS
* * *
Mobile TeleSystems PJSC ("MTS") is the leading
telecommunications group in Russia
and the CIS, offering mobile and fixed voice, broadband, pay TV as
well as content and entertainment services in one of the world's
fastest growing regions. Including its subsidiaries, the Group
services over 100 million mobile subscribers. The Group has been
awarded GSM licenses in Russia,
Ukraine, Turkmenistan, Armenia, Belarus, Uzbekistan, a region that boasts a total
population of more than 230 million. Since June 2000, MTS' Level 3 ADRs have been listed on
the New York Stock Exchange (ticker symbol MBT). Additional
information about the MTS Group can be found at
http://www.mtsgsm.com
* * *
Some of the information in this press release may contain
projections or other forward-looking statements regarding future
events or the future financial performance of MTS, as defined in
the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. You can identify forward looking
statements by terms such as "expect," "believe," "anticipate,"
"estimate," "intend," "will," "could," "may" or "might," and the
negative of such terms or other similar expressions. We wish
to caution you that these statements are only predictions and that
actual events or results may differ materially. We do not undertake
or intend to update these statements to reflect events and
circumstances occurring after the date hereof or to reflect the
occurrence of unanticipated events. We refer you to the documents
MTS files from time to time with the U.S. Securities and Exchange
Commission, specifically the Company's most recent Form 20-F. These
documents contain and identify important factors, including those
contained in the section captioned "Risk Factors" that could cause
the actual results to differ materially from those contained in our
projections or forward-looking statements, including, among others,
the severity and duration of current economic and financial
conditions, including volatility in interest and exchange rates,
commodity and equity prices and the value of financial assets; the
impact of Russian, U.S. and other foreign government programs to
restore liquidity and stimulate national and global economies, our
ability to maintain our current credit rating and the impact on our
funding costs and competitive position if we do not do so,
strategic actions, including acquisitions and dispositions and our
success in integrating acquired businesses, potential fluctuations
in quarterly results, our competitive environment, dependence on
new service development and tariff structures, rapid technological
and market change, acquisition strategy, risks associated with
telecommunications infrastructure, governmental regulation of the
telecommunications industries and other risks associated with
operating in Russia and the CIS,
volatility of stock price, financial risk management and future
growth subject to risks.
For further information, please contact in Moscow:
Joshua B. Tulgan
Director, Corporate Finance & Investor Relations
Mobile TeleSystems PJSC
Tel: +7-495-223-2025
E-mail: ir@mts.ru