MOSCOW, May 19, 2016 /PRNewswire/ --
Mobile TeleSystems PJSC
("MTS" NYSE: MBT; MOEX:
MTSS), the leading telecommunications provider in
Russia and the CIS, today
announces its unaudited IFRS financial results for
the three months ended March 31,
2016.
(Logo:
http://photos.prnewswire.com/prnh/20121115/AQ14468LOGO )
Key Financial Highlights of Q1
2016
- Consolidated group revenue increased 7.9% y-o-y to RUB 108.1 bln
- Total revenue in Russia rose
6.5% y-o-y to RUB 96.3 bln
- Mobile service revenue in Russia improved 1% y-o-y to RUB 71.1 bln
- Sales of goods in Russia
increased 71% y-o-y to RUB 10.7
bln
- Active subscriber base grows 3.8% for the Group to 108.3
mln
- Group adjusted OIBDA remains stable on y-o-y basis at
RUB 41.3 bln
- OIBDA in Russia improved
slightly by 1.1% y-o-y at RUB 38.6
bln
- MTS reiterates its Group guidance for 2016:
- Group revenue growth of more than 4%
- Group adjusted OIBDA growth of -2 to +1%
- Reduction of Group CAPEX to RUB 85
bln
Key Corporate and Industry Highlights
- Entered the tower infrastructure market with the intention to
develop a new business direction to managing existing tower
infrastructure.
- The Board of Directors recommended that an annual general
meeting of shareholders approve annual dividends of RUB 14.01 per ordinary MTS share (RUB 28.02 per ADR) or a total of RUB 28.0 bln based on the full-year 2015
financial results.
- The Board of Directors confirmed the Company's new dividend
policy, which implies a target payout of RUB
25.0 - 26.0 per ordinary MTS share (RUB 50.0 - 52.0 per ADR) per calendar year. The
policy guarantees a minimum payout of RUB
20.0 per ordinary MTS share (or RUB
40.0 per ADR). The new policy will be in effect from 2016 -
2018.
- The Board of Directors tasked management to propose a share
buyback program and allocate up to RUB 30
bln over three years.
- MTS PJSC took possession of shares representing 3.3% of charter
capital with an intention to cancel the shares.
Commentary
Mr. Andrei Dubovskov, President
and CEO, commented, "We are pleased to announce the beginning of
another successful year for MTS. Group revenue increased nearly 8%
to over RUB 108 bln as we continue to
execute on our 3D strategy. We continue to see sustained demand for
data throughout our key markets, which continues to drive growth in
both Russia and Ukraine. Macroeconomic factors and competitive
issues continue to impact our performance in many ways, but in sum,
our group revenue performance continues to pace the market."
Mr. Dubovskov continued, "Despite continued macroeconomic
volatility and increased competition, Group Adjusted OIBDA was
roughly stable year-over-year at RUB 41.3
bln. While we see weakness in a number of our foreign
subsidiaries due to macroeconomic issues or strategic developments,
year-over-year growth in Russia
OIBDA drove the group performance."
Mr. Vasyl Latsanych, Chief
Marketing Officer, commented, "For the year, total revenue in
Russia increased by 6.5% to
RUB 96.3 bln. Our mobile business
revenue grew 6.6% as we see a continuation of trends that had
previously defined our growth, in particular stronger data usage
due to both the growth of customer usage and migration to data
plans as smartphone penetration increased to 50.3%. The
implementation of our retail strategy in Russia in the face of increased competitor
behavior has led to higher handset sales and a 3.7% growth in
subscribers as we focus more on sales through our proprietary
retail channels."
Mr. Latsanych continued, "In our fixed-line business, revenue
increased slightly by 0.3% to RUB 15.4
bln. Growth continues to be driven by our increasing market
share in B2C markets, in particular in Moscow where our broadband and pay-tv market
shares continue to increase."
"In Ukraine, revenue for the period improved by nearly 5% to UAH
2.8 bln. The obvious driver is data consumption, which is rising as
we have rolled out 3G to 19 regional centers in Ukraine. We see strong take-up of traditional
voice tariffs now being offered under the Vodafone brand with
revised pricing on international calling."
"Among our foreign subsidiaries, we note that revenue in
Armenia fell year-over-year by
over 16% as macroeconomic factors continue to impact usage of
services such as international calling and roaming. In Turkmenistan, revenue also declined roughly 6%
due to a slight decline in the active user base and
macroeconomic-driven factors. In Uzbekistan, however, we continue to see strong
revenue growth as we further develop our business in the
market."
Mr. Alexey Kornya, Vice
President, Finance and Investments and Chief Financial Officer,
further commented, "Group net income for the period increased 33.3%
year-over-year to RUB 14.5 bln. In
addition to OIBDA trends, primary factors here include a non-cash
FOREX gain for the period of RUB 2.3
bln, due to ruble appreciation vis-à-vis our non-ruble
denominated debt and the fact that we had reserves related to cash
balances held in distressed banks in Ukraine in Q1 2015."
"Free cash flow for the period amounted to RUB 20.5 bln, an increase of 37% year-over-year
for the period. CAPEX spending of RUB 18
bln, or 28% lower than Q1 in 2015, was a key factor, as cash
flows from operations was relatively stable. As we guided in March,
we aim to reduce overall CAPEX spending this year to RUB 85 bln, which will support free cash flow
this year."
"In Q1, the Board of Directors confirmed the Company's new
dividend policy and recommended dividend payments for 2015 fiscal
year. Under the new dividend policy, management sets a target
payout of RUB 25.0 - 26.0 per
ordinary MTS share (RUB 50.0 - 52.0
per ADR) per calendar year and guarantees a minimum payout of
RUB 20.0 per ordinary MTS share (or
RUB 40.0 per ADR). As part of the
company's long-stated ambition to equalize semi-annual payments,
the Board recommended a dividend payment of 14.01 rubles per share
(or 28.02 per ADR) based on full-year 2015 financial results. In
accordance with the new dividend policy, the Board will review
proposals for an interim dividend in Fall 2016, which combined with
our upcoming proposed payment would translate to 25 to 26 rubles
per share."
"Likewise, the Board has tasked management to consider the
advisability of a share repurchase program as an additional way to
create further shareholder value. As part of such a program, the
Group could allocate up to RUB 30 bln
to be spent over the next three years on the repurchase of
shares."
"By the end of the period, total debt stood at RUB 317 bln, a significant decrease from Q4 2015,
but largely due to ruble appreciation in relation to our non-ruble
denominated debt as well as some amortized payments in Q1. Our net
debt/LTM Adjusted OIBDA declined slightly to 1.1x, a comfortable
level for the Company and very low in relation to our peers. We
remind investors that 97% of our non-ruble debt position is
currently covered by a combination of hedges, short-term deposits
and stable long-term investments, all of which are denominated in
US dollar or Euro."
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.
Conference Call
The conference call will start today at:
18:00 hrs (Moscow time)
16:00 hrs (London time)
11:00 hrs (US Eastern time)
To take part in the conference call, please dial one of the
following telephone numbers and quote the confirmation code,
1448760
From Russia + 7 495 213
0978
From the UK: + 44(0)20 3427 1906
From the US: + 1212 444 0896
The conference call will also be available at:
http://www.mtsgsm.com/news/reports/ via audio webcast.
A replay of the conference call will be available for seven days
on the following telephone numbers:
From the US: +1 347 366 9565 PIN 1448760
From the UK: +44(0)20 3427 0598 PIN 1448760
This press release provides a summary of some of the key
financial and operating indicators for the period ended
December 31, 2015. For full disclosure
materials, please visit
http://www.mtsgsm.com/resources/reports/.
Financial Summary
RUB mln Q1'16 Q1'15 y-o-y Q4'15 q-o-q
Revenues 108,090 100,182 7,9% 113,325 -4,6%
Adjusted OIBDA 41,279 41,309 -0,1% 43,495 -5,1%
- margin 38,2% 41,2% -3,0pp 38,4% -0,2pp
Operating profit 21,031 19,163 9,7% 18,876 11,4%
- margin 19,5% 19,1% 0,4pp 16,7% 2,8pp
Net profit 14,507 10,887 33,3% 7,135 103,3%
- margin 13,4% 10,9% 2,5pp 6,3% 7,1pp
Russia Highlights
RUB mln Q1'16 Q1'15 y-o-y Q4'15 q-o-q
Revenues[1] 96,302 90,423 6,5% 102,537 -6,1%
- mobile 71,132 70,521 0,9% 74,928 -5,1%
- fixed 15,369 15,319 0,3% 15,513 -0,9%
- integrated services 2,492 n/a n/a 876 184,5%
-sales of goods 10,700 6,258 71,0% 13,840 -22,7%
OIBDA 38,583 38,171 1,1% 41,116 -6,2%
- margin 40,1% 42,2% -2,1pp 40,1% 0,0pp
Net profit 15,000 9,109 64,7% 11,817 26,9%
- margin 15,6% 10,1% 5,5pp 11,5% 4,1pp
Ukraine Highlights
UAH mln Q1'16 Q1'15 y-o-y Q4'15 q-o-q
Revenues 2,761 2,631 4,9% 2,405 14,8%
Adjusted OIBDA 803 1,238 -35,1% 885 -9,3%
- margin 29,1% 47,0% -17,9pp 36,8% -7,7pp
Net profit 275 1,096 -74,9% 412 -33,3%
- margin 10,0% 41,6% -31,6pp 17,1% -7,1pp
Armenia Highlights
AMD mln Q1'16 Q1'15 y-o-y Q4'15 q-o-q
Revenues 14,151 16,921 -16,4% 16,481 -14,1%
Adjusted OIBDA 5,618 8,147 -31,0% 7,629 -26,4%
- margin 39,7% 48,1% -8,4pp 46,3% -6,6pp
Net profit/(loss) 239 2,420 -90,1% (17,119) n/a
- margin 1,7% 14,3% -12,6pp n/a n/a
Turkmenistan Highlights
TMT mln Q1'16 Q1'15 y-o-y Q4'15 q-o-q
Revenues 67 72 -6,4% 75 -10,3%
OIBDA 24 26 -7,7% 28 -16,0%
- margin 35,5% 36,0% -0,5pp 37,9% -2,4pp
Net profit 11 12 -5,8% 15 -25,7%
- margin 16,8% 16,7% 0,1pp 20,3% -3,5pp
Uzbekistan Highlights
UZS mln Q1'16 Q1'15 y-o-y Q4'15 q-o-q
Revenues 85,241 19,292 341,8% 82,384 3,5%
OIBDA 5,731 (38,819) n/a 2,583 121,9%
- margin 6,7% n/a n/a 3,1% 3,6pp
Net loss (12,507) (41,853) n/a (22,071) n/a
- margin n/a n/a n/a n/a n/a
Belarus Highlights
BYR bln Q1'16 Q1'15 y-o-y Q4'15 q-o-q
Revenues 1,489 1,174 26,8% 1,542 -3,4%
Adjusted OIBDA 681 640 6,4% 700 -2,8%
- margin 45,7% 54,5% -8,8pp 45,4% 0,3pp
Net profit 397 478 -17,0% 513 -22,6%
- margin 26,7% 40,7% -14,0pp 33,3% -6,6pp
CAPEX Highlights
RUB mln FY 2015 3M 2016
Russia[2] 79,619 16,490
- as % of rev 20.4% 17.1%
Ukraine[3] 12,427 1,590
- as % of rev 44.1% 19.9%
Armenia 1,371 99
- as % of rev 15.2% 4.6%
Turkmenistan 500 34
- as % of rev 9.8% 2.4%
Uzbekistan 2,195 157
- as % of rev 47.6% 7.1%
Group 96,111 18,371
- as % of rev 22.3% 17.1%
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
Learn more about MTS. Visit the official blog of the Investor
Relations Department at www.mtsgsm.com/blog/ and follow us on
Twitter: JoshatMTS
Mobile TeleSystems PJSC ("MTS" - NYSE:MBT; MOEX:MTSS) is the
leading telecommunications group in Russia, Central and Eastern Europe. We provide wireless
Internet access and fixed voice, broadband and pay-TV to over 100
million customers who value high quality of service at a
competitive price. Our wireless and fixed-line networks deliver
best-in-class speeds and coverage throughout Russia, Ukraine, Armenia, Turkmenistan, Uzbekistan and Belarus. To keep pace with evolving customer
demand, we continue to grow through innovative products,
investments in our market-leading retail platform, mobile payment
services, e-commerce and IT solutions. For more information, please
visit: 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.
Attachments to the First Quarter 2016
Earnings Press Release
Attachment A
Non-IFRS financial measures. This presentation includes
financial information prepared in accordance with International
Financial Reporting Standards, or IFRS, as well as other
financial measures referred to as non-IFRS. The non-IFRS financial
measures should be considered in addition to, but not as a
substitute for, the information prepared in accordance with IFRS.
Due to the rounding and translation practices, Russian ruble and
functional currency margins, as well as other non-IFRS financial
measures, may differ.
Operating Income Before Depreciation and Amortization (OIBDA)
and OIBDA margin. OIBDA represents operating income before
depreciation and amortization. OIBDA margin is defined as OIBDA as
a percentage of our net revenues. OIBDA may not be similar to OIBDA
measures of other companies, is not a measurement under IFRS and
should be considered in addition to, but not as a substitute for,
the information contained in our consolidated statement of
operations. We believe that OIBDA provides useful information to
investors because it is an indicator of the strength and
performance of our ongoing business operations, including our
ability to fund discretionary spending such as capital
expenditures, acquisitions of mobile operators and other
investments and our ability to incur and service debt. While
depreciation and amortization are considered operating costs under
IFRS, these expenses primarily represent the non-cash current
period allocation of costs associated with long-lived assets
acquired or constructed in prior periods. Our OIBDA calculation is
commonly used as one of the bases for investors, analysts and
credit rating agencies to evaluate and compare the periodic and
future operating performance and value of companies within the
wireless telecommunications industry. We use a term Adjusted for
OIBDA and operating income when there were significant excluded one
off effects. OIBDA can be reconciled to our consolidated
statements of operations as follows:
Group (RUB mln) Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Operating profit 19,163 22,501 27,319 18,876 21,031
Less: Gain from reentrance
in Uzbekistan - - - -
Add: Provision for cash
balances deposited in
distressed Ukrainian banks 1,698 - - - -
Add: Loss from impairment
of goodwill in Armenia - - - 3,516 -
Adjusted operating profit 20,861 22,501 27,319 22,392 21,031
Add: D&A 20,448 20,221 20,700 21,103 20,248
Adjusted OIBDA 41,309 42,722 48,019 43,495 41,279
Russia (RUB mln) Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Operating profit 21,091 23,728 27,275 23,481 21,599
Add: D&A 17,080 17,517 17,252 17,634 16,984
OIBDA 38,171 41,245 44,527 41,115 38,583
Ukraine (RUB mln) Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Operating profit 693 1,190 1,675 1,158 795
Add: Provision for cash
balances deposited in
distressed Ukrainian banks 1,698 - - - -
Adjusted operating profit 2,391 1,190 1,675 1,158 795
Add: D&A 1,344 1,107 1,358 1,390 1,557
Adjusted OIBDA 3,735 2,297 3,032 2,548 2,351
Armenia (RUB mln) Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Operating profit/ (loss) 436 412 680 (3,122) 120
Add: Loss from impairment
of goodwill in Armenia - - - 3,516 -
Adjusted operating profit 436 412 680 394 120
Add: D&A 623 525 626 656 737
Adjusted OIBDA 1,059 937 1,306 1,050 857
Turkmenistan (RUB mln) Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Operating profit 252 237 326 330 278
Add: D&A 205 165 203 209 232
OIBDA 458 402 529 538 510
Uzbekistan (RUB mln) Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Operating loss (2,134) (1,373) (1,404) (1,163) (607)
Add: D&A 1,209 917 1,275 1,228 760
OIBDA (925) (455) (128) 65 154
OIBDA margin can be reconciled to our operating margin as
follows:
Group Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Operating margin 19.1% 21.9% 23.7% 16.7% 19.5%
Add: Provision for cash
balances deposited in
distressed Ukrainian banks 1.7% - - - -
Add: Loss from impairment
of goodwill in Armenia - - - 3.1% -
Adjusted operating margin 20.8% 21.9% 23.7% 19.8% 19.5%
Add: D&A 20.4% 19.7% 18.0% 18.6% 18.7%
Adjusted OIBDA margin 41.2% 41.6% 41.7% 38.4% 38.2%
Russia Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Operating margin 23.3% 25.2% 26.2% 22.9% 22.4%
Add: D&A 18.9% 18.6% 16.6% 17.2% 17.6%
OIBDA margin 42.2% 43.7% 42.8% 40.1% 40.1%
Ukraine Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Operating margin 8.8% 20.2% 22.5% 16.7% 9.9%
Add: Provision for cash
balances deposited in
distressed Ukrainian banks 21.5% - - - -
Adjusted operating margin 30.2% 20.2% 22.5% 16.7% 9.9%
Add: D&A 17.0% 18.8% 18.2% 20.0% 19.5%
Adjusted OIBDA margin 47.3% 38.9% 40.7% 36.7% 29.4%
Armenia Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Operating margin 19.8% 20.1% 26.9% n/a 5.6%
Add: Loss from impairment
of goodwill in Armenia - - - 155.0% -
Adjusted operating margin 19.8% 20.1% 26.9% 17.4% 5.6%
Add: D&A 28.3% 25.7% 24.8% 28.9% 34.2%
Adjusted OIBDA margin 48.1% 45.8% 51.7% 46.3% 39.7%
Turkmenistan Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Operating margin 19.8% 22.0% 24.3% 23.4% 19.4%
Add: D&A 16.1% 15.4% 15.1% 14.8% 16.2%
OIBDA margin 36.0% 37.4% 39.4% 38.1% 35.6%
Uzbekistan Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
Operating margin - - - n/a n/a
Add: D&A - - - 61.1% 34.1%
OIBDA margin - - - n/a 6.9%
***
Attachment B
Net debt represents total debt less cash and cash
equivalents and short-term investments and long-term deposits. Our
net debt calculation is commonly used as one of the bases for
investors, analysts and credit rating agencies to evaluate and
compare our periodic and future liquidity within the wireless
telecommunications industry. The non-IFRS financial measures should
be considered in addition to, but not as a substitute for, the
information prepared in accordance with IFRS.
Net debt can be reconciled to our consolidated statements of
financial position as follows:
As of Dec 31, As of Mar 31,
RUB mln 2015 2016
Current portion of LT debt and of finance
lease obligations 54,346 46,273
LT debt 282,435 259,968
Finance lease obligations 11,231 10,650
Total debt 348,012 316,891
Less:
Cash and cash equivalents 33,464 44,389
ST investments 49,840 30,961
LT deposits 30,677 28,886
Effects of hedging of non-ruble denominated
debt 18,174 14,636
Net debt 215,857 198,019
Free cash-flow can be reconciled to our consolidated statements
of cash flow as follows:
For the three For the three
months ended months ended
RUB mln Mar 31, 2015 Mar 31, 2016
Net cash provided by operating activities 39,115 39,076
Less:
Purchases of property, plant and equipment (21,886) (13,656)
Purchases of intangible assets[4] (3,539) (4,715)
Proceeds from sale of property, plant and
equipment 1,291 1,153
Investments in associates - (1,326)
Free cash flow 14,981 20,532
LTM Adjusted OIBDA can be reconciled to our consolidated statements
of operations as follows:
Nine months Three months Twelve months
ended ended Mar 31, ended
RUB mln Dec 31, 2015 2016 Mar 31, 2016
A B C = A + B
Net operating profit 68,696 21,031 89,727
Add: Impairment of goodwill in
Armenia 3,516 - 3,516
Add: D&A 62,024 20,248 82,272
LTM ADJUSTED OIBDA 134,236 41,279 175,515
Attachment C
Definitions
Subscriber. We define a "subscriber" as an organization or
individual, whose SIM-card:
shows traffic-generating activity or
accrues a balance for services rendered or
is replenished or topped off
Over the course of any three-month period, inclusive within the
reporting period, and was not blocked at the end of the period.
MOBILE TELESYSTEMS
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
AS OF MARCH 31,2016 AND AS OF DECEMBER 31,2015
(Amounts in millions of RUB)
As of March 31, As of December 31,
2016 2015
NON-CURRENT ASSETS:
Property, plant and equipment 292 949 302 662
Investment property 363 364
Intangible assets 107 925 109 064
Investments in associates 8 938 9 299
Deferred tax assets 8 668 9 287
Other non-financial assets 503 480
Other investments 32 884 34 667
Accounts receivable (related parties) 3 424 3 335
Other financial assets 20 228 25 203
Total non-current assets 475 882 494 361
CURRENT ASSETS:
Inventories 12 583 14 510
Trade and other receivables 36 060 34 542
Accounts receivable (related parties) 5 975 6 326
Short-term investments 30 961 49 840
VAT receivable 9 792 9 815
Income tax assets 4 468 5 190
Assets held for sale 826 549
Advances paid and prepaid expenses, other
current assets 4 080 4 781
Cash and cash equivalents 44 389 33 464
Total current assets 149 134 159 017
Total assets 625 016 653 378
EQUITY:
Equity attributable to equity holders 165 415 160 115
Non-controlling interests 7 568 8 256
Total equity 172 983 168 371
NON-CURRENT LIABILITIES:
Borrowings 269 256 292 168
Deferred tax liabilities 28 036 27 346
Provisions 2 713 2 565
Other financial liabilities 654 676
Other non-financial liabilities 4 234 4 342
Total non-current liabilities 304 893 327 097
CURRENT LIABILITIES:
Borrowings 45 663 53 701
Provisions 10 373 7 863
Trade and other payables 56 301 57 756
Accounts payable (related parties) 1 558 1 809
Income tax liabilities 1 379 831
Other financial liabilities 8 054 9 778
Other non-financial liabilities 23 812 26 172
Total current liabilities 147 140 157 910
Total equity and liabilities 625 016 653 378
MOBILE TELESYSTEMS
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(Amounts in millions of RUB except per share amount)
Three months ended Three months ended
March 31, 2016 March 31, 2015
Service revenue 97 327 93 810
Sales of goods 10 763 6 372
108 090 100 182
Cost of services (34 598) (32 372)
Cost of goods (9 746) (4 686)
Selling, general and administrative expenses (23 667) (22 295)
Depreciation and amortization expense (20 248) (20 448)
Other operating income/expense 499 (516)
Operating share of the profit of associates 701 996
Provision for cash balances deposited in distressed
Ukrainian banks - (1 698)
Operating profit 21 031 19 163
Currency exchange gain or (loss) 2 273 (3 509)
Other (expenses)/income:
Finance income 1 696 2 326
Finance costs (6 734) (6 048)
Other expenses (686) (5)
Total other expenses, net (5 724) (3 727)
Profit before tax 17 580 11 927
Income tax expense (3 263) (1 938)
Profit for the period 14 317 9 989
Loss for the period attributable to non-controlling
interests 190 898
Profit for the period attributable to owners of the
Company 14 507 10 887
Other comprehensive income/(loss)
Items that may be reclassified subsequently to
profit or loss
Exchange differences on translating foreign
operations (8 174) (9 364)
Net fair value (loss)/gain on financial instruments (1 605) (2 591)
Other comprehensive (loss)/income (9 779) (11 955)
Total comprehensive income/(loss) for the period 4 538 (1 966)
Less comprehensive loss for the period attributable
to the noncontrolling interests 688 744
Comprehensive income/(loss) for the period
attributable to owners of the Company 5 226 (1 222)
Weighted average number of common shares
outstanding, in millions - basic 1 988 711 1 988 730
Earnings per share attributable to the Group -
basic: 7,29 5,47
Weighted average number of common shares
outstanding, in millions - diluted 1 990 178 1 989 951
Earnings per share attributable to the Group -
diluted: 7,29 5,47
MOBILE TELESYSTEMS
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(Amounts in millions of RUB)
Three months ended Three months ended
March 31, 2016 March 31, 2015
Profit for the period 14 317 9 989
Adjustments for:
Depreciation and amortization 20 248 20 448
Finance income (1 696) (2 326)
Finance costs 6 734 6 048
Income tax expense 3 263 1 938
Currency exchange (gain)/loss (2 273) 3 509
Change in fair value of financial instruments (118) -
Amortization of deferred connection fees (281) (287)
Share of the profit of associates (63) (793)
Inventory obsolescence expense 231 30
Allowance for doubtful accounts 398 711
Change in provisions 3 579 2 002
Other non cash items (754) (180)
Movements in operating assets and liabilities::
Increase in trade and other receivables (5 431) (2 884)
Decrease/(increase) in inventory 1 624 (123)
Increase in VAT receivable (200) (247)
Decrease in advances paid and prepaid expenses 535 986
Increase in trade and other paybles and other current liabilities 3 312 2 540
Dividends received 661 576
Income taxes paid (1 338) (1 679)
Interest received 1 324 1 194
Interest paid (net of interest capitalised) (4 996) (2 337)
Net cash provided by operating activities 39 076 39 115
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (13 656) (21 886)
Purchases of intangible assets (net of purchases of 3G licences in Ukraine and
4G licenses in Russia) (4 715) (3 539)
Purchases of 4G licenses in Russia/3G licences in Ukraine (2 570) (7 044)
Proceeds from sale of property, plant and equipment and assets held for sale 1 153 1 291
Purchases of short-term investments (801) (21 390)
Proceeds from sale of short-term investments 16 152 1 353
Purchase of other investments (31) (39 831)
Proceeds from sale of other investments - 97
Investments in associates (1 326) -
Net cash used in investing activities (5 794) (90 949)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash flows under capital transactions with related parties - 363
Loan principal paid (18 549) (6 429)
Proceeds from loans 213 43 498
Repayment of notes (505) -
Notes and debt issuance cost paid - (1 112)
Finance lease principal paid (104) (143)
Cash outflow under credit guarantee agreement related to foreign-currency
hedge (1 034) -
Other financing activities 2 -
Net cash provided by financing activities (19 977) 36 177
Effect of exchange rate changes on cash and cash equivalents (2 380) (2 133)
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS: 10 925 (17 790)
CASH AND CASH EQUIVALENTS, at beginning of period 33 464 61 566
CASH AND CASH EQUIVALENTS, at end of period 44 389 43 776
[1] Revenue, net of
intercompany between mobile, fixed and integrated
services
[2] Excluding costs of
RUB 3.4 bln related to the
acquisition of a 4G license in Russia in 2015 and RUB
2.6 bln in 2016
[3] Excluding purchase of
3G license in Ukraine in the
amount of RUB 7.0 bln in
2015
[4] Excluding purchases of
3G license in Ukraine in the
amount of RUB 7.0 bln in Q1 2015 and
4G licenses in Russia in the
amount of RUB 2.6 bln in Q1
2016
SOURCE Mobile TeleSystems (MTS)