By Olga Razumovskaya
MOSCOW--Mobile TeleSystems (MBT) said Tuesday its net profit
fell 14.3% in the first quarter after Russia's leading
telecommunications company was hit by forex and Ukraine-related
losses.
MTS said it earned 10.9 billion rubles ($220.7 million) in the
first three months of 2015. The company gained RUB6.7 billion from
the resumption of operations in Uzbekistan, but the loss of
deposits with insolvent Ukrainian banks trimmed the final profit
figure by RUB1.7 billion.
MTS's revenue for the first quarter increased by 2.7% to
RUB100.2 billion as the company's business in Ukraine stabilized
and revenues from data services improved.
The company's adjusted operating income before depreciation and
amortization, or Oibda, declined by 2% on year in the first quarter
to RUB41.3 billion after it was hit by Russia's double-digit
inflation rate.
MTS said it sees "significant macroeconomic instability" in its
main markets, particularly Russia and Ukraine, which could
negatively impact the company's performance in the future. But the
company said it sticks to its previous full-year revenue forecast,
which envisages a 2% increase. MTS also sees revenue at its Russian
unit growing by more than 3%.
The company's Chief Executive Andrei Dubovskov said that under a
so-called conservative forecast, MTS full-year 2015 Oibda margin is
expected to grow by more than 40% and full-year capital expenditure
is seen at RUB85 billion.
Despite economic headwinds, MTS bets on cheaper lending. The
company's chief financial officer Alexei Kornya said he sees
borrowing costs decreasing as the Bank of Russia is set to cut
rates further.
The company's Oibda now also incorporates MTS performance in
Belarus as in the first quarter the company started reporting
earnings under International Financial Reporting Standards. Before
switching to IFRS, MTS reported results in accordance with US
Generally Accepted Accounting Principles, or GAAP.
Write to Olga Razumovskaya at olga.razumovskaya@wsj.com
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