MOSCOW, November 19, 2013 /PRNewswire/ --
Mobile TeleSystems OJSC ("MTS" - NYSE:
MBT), the leading telecommunications provider in Russia and the CIS, today announces its
unaudited US GAAP financial results for the three months ended
September 30, 2013.
Key Financial Highlights of Q3
2013
- Consolidated revenues up 4% y-o-y to RUB
103 billion
- Increase in mobile service revenue in Russia of 6% y-o-y to RUB 70 billion
- Data revenue growth of 45% y-o-y to RUB
13 billion
- Consolidated OIBDA[1] up 5% y-o-y to RUB 46 billion
- Group OIBDA margin improved 0.3 pp y-o-y to 44.8%
- Consolidated net income[2] of RUB 18 billion
- Free cash-flow[3] reached RUB
72 billion for the nine months ended September 30, 2013
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1. See Attachment A for definitions and reconciliation of
OIBDA and OIBDA margin to their most directly comparable US GAAP
financial measures.
2. Attributable to the Group.
3. See Attachment B for reconciliation of free cash-flow to
net cash provided by operating activity.
Key Corporate and Industry Highlights
- Completed payment of the dividend for the fiscal year 2012,
which amounted to total of RUB 30.2
billion or RUB 14.6 per
ordinary MTS share (approximately RUB
29.2 per ADR).
- Announced partnership with Nokia Siemens Networks to jointly
develop telecommunications infrastructure and build LTE networks in
the Moscow region and Russia's Central Federal District
- EGM approved payout of semi-annual dividends of RUB 5.22 per ordinary MTS share (RUB 10.44 per ADR) amounting to the total of
RUB 10.8 billion on the basis of the
Company's H1 2013 financial and operating results
- Redeemed remaining portion of the RUB 10
billion series 01 bond
- Launched LTE networks in the Pskov Region, Tambov Region, Kirov
Region, North Ossetia-Alania, Khabarovsk Krai, Amur Krai,
Zabaikalsky Krai and Udmurtia
- Launched sales of iPhone 5s/5c in the MTS retail network
- Appointed Mr. Andrei Smelkov as
Vice President for Foreign Subsidiaries, Member of the Executive
Board
Revised Outlook for FY2013
Management reiterates Group revenue growth guidance of at least
5%; key factors may include:
- Growth in data revenues through rising penetration of
smartphones and modems
- Lower sales of handsets due to reduced sales of high-value
devices
- Absence of any 3G licenses in Ukraine
- Macroeconomic developments in core markets
Guidance for OIBDA margin reiterated at >43%, which reflects
both expected growth in service revenues as well as anticipated
cost pressures:
- Improvements in churn and increased customer loyalty
- Higher labor costs due to expansion of retail and fixed-line
networks
- Inflationary pressure in operational expenses
CAPEX guidance for FY2013 remains as percent of revenue of ≈20%
driven by:
- Launch of roll-out of LTE networks in regions throughout
Russia
- Continued build-out of our GPON network in Moscow
- Sustained improvements in our 3G networks, including the
expansion of IP-connected base stations and enablement of HSPA+
connectivity
Commentary
Andrei Dubovskov, President and CEO of MTS, commented, "In the
third quarter 2013, we witnessed a continuation of the positive
operating trends we have seen over the last quarters. Group revenue
for the period reached RUB 103.4
billion, which puts us on pace to reach our guidance of a
minimum 5% revenue growth for the year. In Russia revenue grew 4% year-on-year to
RUB 91.5 billion. Revenue was boosted
by the continued strong performance of our mobile and fixed
operations. Mobile service revenues increased by 6% year-on-year to
RUB 70.3 billion. Key growth factors
include increased data adoption and further monetization of data
traffic and messaging revenues."
Alexey Kornya, MTS Vice President
and Chief Financial Officer, said, "During the quarter, Group OIBDA
increased by 5% year-on-year up to RUB 46.3
billion for an OIBDA margin of 44.8%. Unlike the second
quarter, when one-offs increased our margin by 1.9 percentage
points, our OIBDA margin was largely unaffected by any significant
one-time gains or losses. Adjusted for this fact, our margin in the
third quarter 2013 was a little over 1.1 percentage points higher
than in the second quarter, which is a common seasonal difference
from Q2 to Q3. Group's performance during the quarter sets us on
track to realize our OIBDA guidance for the year of at least 43%.
In Russia, OIBDA grew in line with
revenue 4% year-over-year to RUB 41.5
billion. For the quarter, we delivered stable OIBDA margin
of 45.4%. Increasing data revenue combined with stable sequential
sales of handsets and accessories continue to offset inflationary
pressures, such as rising personnel costs, higher rent and network
maintenance costs."
Mr. Kornya added, "Group net income from continuing operations
registered at RUB 18.1 billion for
margin of 17.5%. Unlike the second quarter, we saw no significant
one-off effects from non-operating activities. Overall,
year-on-year net income was stable as we realized a USD 100 million non-cash FOREX gain for the
period in 2012. Adjusted for this effect, our net profit is stable
year-over-year and should be seen as very strong for the period.
Free cash flow for the first nine months was RUB 72.2 billion, or an over 51% increase
year-over-year. While we expect significant CAPEX spending in the
fourth quarter to mitigate these improvements, operating cash flow
from continuing operations for the first nine months is also up
17%. This reflects the continuing improvements in cash flow
generation we see at MTS."
This press release provides a summary
of some of the key financial and operating indicators for the
period ended September 30, 2013. For
full disclosure materials, please visit
http://www.mtsgsm.com/resources/reports/.
Mobile TeleSystems OJSC ("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 and Belarus, a region that boasts a total
population of more than 200 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 OJSC
Tel: +7-495-223-2025
E-mail: ir@mts.ru
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
SOURCE Mobile TeleSystems (MTS)