MOSCOW, August 18, 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 June
30, 2016.
Key Financial Highlights of Q2
2016
- Consolidated group revenue increased by 5.3% y-o-y to
RUB 108.1 bln
- Total revenue in Russia rose
by 3.3% y-o-y to RUB 97.4 bln
- Mobile service revenue in Russia increased by 0.1% y-o-y to RUB 72.8 bln
- Sales of goods in Russia
increased by 38.7% y-o-y to RUB 10.6
bln
- Active subscriber base increased by 3.5% for the Group to 109.0
mln
- MTS's proprietary retail network in Russia increased to 5,838 stores
- Revenue in Ukraine increased
by 13.5% y-o-y to UAH 2.7 bln
- YTD Free Cash Flow reached nearly RUB
24.0 bln
- Total Group debt fell to RUB
274.5[1] bln as Net Debt/LTM Adjusted OIBDA
remained stable at 1.1x
(Logo:
http://photos.prnewswire.com/prnh/20121115/AQ14468LOGO )
Key Corporate and Industry Highlights
- Paid out in dividends RUB 28.0
bln or RUB 14.01 per ordinary
MTS share (RUB 28.02 per ADR) based
on FY2015 results
- The Board of Directors recommended that the Extraordinary
General Meeting of shareholders approve semi-annual dividends of
RUB 11.99 per ordinary MTS share
(RUB 23.98 per ADR), or a total of
RUB 24.0 bln, based on H1 2016
financial results
- MTS through its subsidiary, Dega Retail Holding Limited,
repurchased USD 267 mln of Loan
Participation Notes due in 2020 (issued in 2010 in the amount of
USD 750,000,000 at 8.625%) through a
tender offer
- Sold 50.01% stake in the telecommunications operator Universal
Mobile Systems (UMS) to the State Unitary Enterprise Centre of
Radio Communication, Radio Broadcasting and Television of The
Ministry of Development of Information Technologies and
Communications of the Republic of Uzbekistan
Commentary
Mr. Andrei Dubovskov, President
and CEO of MTS, commented, "For the period, we are pleased to
report strong topline growth of 5.3% as total Group revenue
increased to RUB 108.1 bln. Factors
that have allowed us to build on our successful 3D strategy and set
the pace for the market include: strong retail sales; stable
service revenue despite on-going weaker usage in certain mobile
market segments; growth in B2C home Internet and pay-tv markets;
and growth in Ukraine through the
steady adoption of 3G data services.
--------------------------------------------------
[1] Net of financial leasing and unamortized debt
issuance cost adjustment, as of June 30,
2016
Macroeconomic factors and competitive issues continue to impact
our performance in many ways, in particular voice and messaging
usage in roaming, but in sum, our group revenue performance
currently out-paces the market."
Mr. Dubovskov continued, "OIBDA performance was slightly weaker
in Q2 than anticipated as we witnessed a 4.3% decline in OIBDA for
an OIBDA margin of nearly 38%. Our guidance for the year was
predicated on changes in the retail environment, but we continue to
see strong competitor activity in this space. Retail competition
impacts both the gross margin and OIBDA directly, but it also has a
sustained impact on effective pricing. These factors, combined with
the continued macroeconomic volatility throughout our markets,
dampened our performance for the period."
Mr. Vasyl Latsanych, Vice
President, Strategy and Marketing, commented, "Total revenue in
Russia increased by 3.3% to
RUB 97.4 bln. Our mobile business
revenue grew slightly during the period as we see a continuation of
trends that had previously defined our growth: stronger data usage
due to both the growth of customer usage and migration to data
plans, as smartphone penetration reached over 51%; 3.2% growth in
subscribers as we focus more on sales through our proprietary
retail channels; and higher handset sales as we continue to
implement our retail strategy of upgrading existing feature phone
users, as well as attracting new active voice and data users."
Mr. Latsanych continued, "In our fixed-line business, revenue
decreased by 2.8% to RUB 15.3 bln. We
see continuous growth from our B2C broadband and pay-TV markets, as
market shares in Moscow in both
home internet and pay-tv rose. However, overall B2B and B2G
spending has fallen due to macroeconomic factors, which reduces
overall voice calling. In Ukraine,
revenue for the period increased by 13.5% to UAH 2.7 bln. Key
drivers include an increase of subscribers and data consumption,
which is rising as we have rolled out 3G to all major population
centers throughout Ukraine. Among
our foreign subsidiaries, revenue in Armenia declined 18.6% year-over-year, while
in Turkmenistan, we saw a 7.5%
decline. Both markets remain exposed to macroeconomic trends, which
continue to weaken voice and data usage."
Alexey Kornya, Vice President,
Finance, Investments and M&A, added, "We witnessed a decline in
year-over-year group OIBDA of 4.3% to RUB
40.9 bln. While the decline we have seen in the contribution
from our foreign subsidiaries has stabilized, Russia witnessed OIBDA decline due to factors
we have long identified as having a negative impact on our OIBDA,
including higher retail expenses and also roaming costs in light of
higher currency volatility. Overall, for the first half of 2016, we
are only down 2.2% on OIBDA, which is close to our previous
guidance of minus 2%."
Mr. Kornya continued, "Group net profit for the period decreased
year-over-year to RUB 9.1 bln.
Primary this decline was attributable to a number of factors,
including OIBDA trends; the accelerated realization of RUB 3.1 bln in interest expense due to our
repurchase of USD 267 mln of our 2020
Eurobond notes; and a smaller non-cash FOREX gain compared to Q2
2015 of RUB 1.0 bln for the period,
due to relative ruble weakness vis-à-vis our non-ruble denominated
debt."
"Free cash flow to date amounted to 24.0 billion rubles, an
increase of 22% year-over-year for the period. CAPEX equaled nearly
RUB 40.0 bln, lower than in H1 2015,
but in line with our guidance of RUB 85
bln for the year. Spending is lower in each of our markets
as we focus on incremental investments in our more developed data
markets and have completed our launch of our core 3G network in
Ukraine.
"Recently, we paid out dividends of RUB
28.0 bln or RUB 14.01 per
share. The Board of Directors also recommended that an
Extraordinary General Meeting of Shareholders approve a semi-annual
dividend payment of close to RUB 24.0
bln or RUB 11.99 per share,
which would satisfy our commitment to deliver RUB 25 - 26 per share in dividends over the
course of calendar year 2016.
"By the end of the period, total debt stood at RUB 274.5 bln[2], which is trending
lower due to our on-going debt repayments as well as financial
policies. Our net debt/LTM Adjusted OIBDA remained stable at a
manageable 1.1x, a comfortable level for the Company and very low
in relation to our peers. Virtually our entire 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. Adding to this, we
repurchased USD 267 mln of our 2020
Eurobonds in Q2 to take advantage of a strong market and our
favorable liquidity position to provide hedges against currency
volatility and balance sheet flexibility. We remain focused on
sustaining a strong balance sheet and identifying further ways to
optimize our debt portfolio."
2016 Outlook
In accordance with IFRS 5 disclosure requirements, from Q3
2016 the Group shall present financial results in a manner that
enables users of the financial statements to evaluate the effects
of discontinued operations. Results of discontinued operations
shall be excluded from the results of continuing operations and
presented separately as a single amount in the statement of
comprehensive income.
Group Revenue: For 2016, MTS amends its Group revenue
outlook to 2-3% growth, due to disposal of UMS LLC and expected
full deconsolidation of UMS's financial results in Q3 2016 and
other factors:
- Subscriber growth in Russia;
- Rising data usage and sustained data adoption in Russia and Ukraine;
- Increased sales of handsets in Russia; and
- Rising share in Moscow B2C
broadband/pay-TV markets.
Group OIBDA: MTS is compelled to revise its
outlook on adjusted Group OIBDA growth to -4% due primarily to the
sale of UMS LLC as well as other factors:
- Sustained competitive pressures in the Russian distribution
market and the Company's strategic efforts to sustain market
share;
- The build-out of 3G in Ukraine
and non-market factors impacting our profitability;
- Developments in foreign subsidiaries; and
- Macroeconomic developments and currency volatility throughout
our markets of operation.
Group CAPEX: MTS affirms its Group CAPEX guidance
of RUB 85 bln
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:
--------------------------------------------------
[2] Net of financial leasing and unamortized
debt issuance cost adjustment, as of June
30, 2016
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,
9935476
From Russia + 7 495 545
0588
From the UK: + 44(0)20 3427 1906
From the US: + 1 646 254 3361
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 9935476
From the UK: +44(0)20 3427 0598 PIN 9935476
This press release provides a summary of some of the key
financial and operating indicators for the period ended
June 30, 2016. For full disclosure
materials, please visit
http://www.mtsgsm.com/resources/reports/.
Financial Summary
RUB mln Q2'16 Q2'15 y-o-y Q1'16 q-o-q
Revenues 108,136 102,691 5.3% 108,090 stable
OIBDA 40,885 42,722 -4.3% 41,279 -1.0%
- margin 37.8% 41.6% -3.8% 38.2% -0.4%
Operating profit 20,053 22,501 -10.9% 21,031 -4.6%
- margin 18.5% 21.9% -3.4% 19.5% -1.0%
Net profit 9,056 17,074 -47.0% 14,507 -37.6%
- margin 8.4% 16.6% -8.2% 13.4% -5.0%
Russia Highlights
RUB mln Q2'16 Q2'15 y-o-y Q1'16 q-o-q
Revenues[3] 97,435 94,336 3.3% 96,302 1.2%
- mobile 72,786 72,749 0.1% 71,132 2.3%
- fixed 15,263 15,706 -2.8% 15,369 -0.7%
- integrated services 1,258 - n/a 2,492 -49.5%
- sales of goods 10,552 7,607 38.7% 10,700 -1.4%
OIBDA 39,706 41,245 -3.7% 38,583 2.9%
- margin 40.8% 43.7% -2.9% 40.1% 0.7%
Net profit 10,788 18,746 -42.5% 15,000 -28.1%
- margin 11.1% 19.9% -8.8% 15.6% -4.5%
Ukraine Highlights
UAH mln Q2'16 Q2'15 y-o-y Q1'16 q-o-q
Revenues 2,745 2,419 13.5% 2,761 -0.6%
OIBDA 827 942 -12.2% 803 3.0%
- margin 30.1% 38.9% -8.8% 29.1% 1.0%
Net profit 222 214 3.7% 275 -19.3%
- margin 8.1% 8,8% -0.7% 10.0% -1.9%
--------------------------------------------------
[3] Revenue, net of intercompany between mobile,
fixed and integrated services
Armenia Highlights
AMD mln Q2'16 Q2'15 y-o-y Q1'16 q-o-q
Revenues 15,040 18,479 -18.6% 14,151 6.3%
OIBDA 5,944 8,491 -30.0% 5,618 5.8%
- margin 39.5% 45.9% -6.4% 39.7% -0.2%
Net profit/(loss) (1,991) 4,078 n/a 239 n/a
- margin n/a 22.1% n/a 1.7% n/a
Turkmenistan Highlights
TMT mln Q2'16 Q2'15 y-o-y Q1'16 q-o-q
Revenues 66 71 -7.5% 67 -1.7%
OIBDA 22 27 -17.2% 24 -7.5%
- margin 33.4% 37.4% -4.0% 35.5% -2.1%
Net profit 10 13 -29.1% 11 -15.8%
- margin 14.4% 18.8% -4.4% 16.8% -2.4%
Uzbekistan Highlights
UZS mln Q2'16 Q2'15 y-o-y Q1'16 q-o-q
Revenues 92,372 37,398 147.0% 85,241 8.4%
OIBDA 9,770 (22,235) n/a 5,731 70,5%
- margin 10.6% n/a n/a 6.7% 3.9%
Net loss (10,771) (28,123) n/a (12,507) n/a
- margin n/a n/a n/a n/a n/a
Belarus Highlights
BYR bln Q2'16 Q2'15 y-o-y Q1'16 q-o-q
Revenues 1,619 1,302 24.3% 1,489 8.7%
OIBDA 757 673 12.4% 681 11.1%
- margin 46.8% 51.7% -4.9% 45.7% 1.1%
Net profit 466 368 26.6% 397 17.2%
- margin 28.8% 28.2% 0.6% 26.7% 2.1%
CAPEX Highlights
RUB mln FY 2015 6M 2016
Russia[4] 79,619 35,306
- as % of rev 20.4% 18.2%
Ukraine[5] 12,427 3,155
- as % of rev 44.1% 20.8%
Armenia 1,371 281
- as % of rev 15.2% 6.6%
Turkmenistan 500 63
- as % of rev 9.8% 2.3%
Uzbekistan 2,195 867
- as % of rev 47.6% 20.1%
Group 96,111 39,671
- as % of rev 22.3% 18.3%
* * *
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 http://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 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: 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.
Attachments to the Second 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 profit
or loss. 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) Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Operating profit 22,501 27,319 18,876 21,031 20,053
Add: Loss from impairment
of goodwill in Armenia - - 3,516 - -
Adjusted operating profit 22,501 27,319 22,392 21,031 20,053
Add: D&A 20,221 20,700 21,103 20,248 20,832
Adjusted OIBDA 42,722 48,019 43,495 41,279 40,885
--------------------------------------------------
[4] 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
[5] Excluding purchase of 3G
license in Ukraine in the amount
of RUB 7.0 bln in 2015
Russia (RUB mln) Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Operating profit 23,728 27,275 23,481 21,599 21,954
Add: D&A 17,517 17,252 17,634 16,984 17,752
OIBDA 41,245 44,527 41,115 38,583 39,706
Ukraine (RUB mln) Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Operating profit 1,190 1,675 1,158 795 627
Add: D&A 1,107 1,358 1,390 1,557 1,530
OIBDA 2,297 3,032 2,548 2,351 2,157
Armenia (RUB mln) Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Operating profit/ (loss) 412 680 (3,122) 120 136
Add: Loss from impairment
of goodwill in Armenia - - 3,516 - -
Adjusted operating profit 412 680 394 120 136
Add: D&A 525 626 656 737 681
Adjusted OIBDA 937 1,306 1,050 857 817
Turkmenistan (RUB mln) Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Operating profit 237 326 330 278 209
Add: D&A 165 203 209 232 207
OIBDA 402 529 538 510 416
Uzbekistan (RUB mln) Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Operating loss (1,373) (1,404) (1,163) (607) (447)
Add: D&A 917 1,275 1,228 760 667
OIBDA (455) (128) 65 154 220
OIBDA margin can be reconciled to our operating margin as
follows:
Group Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Operating margin 21.9% 23.7% 16.7% 19.5% 18.5%
Add: Loss from impairment
of goodwill in Armenia - - 3.1% - -
Adjusted operating margin 21.9% 23.7% 19.8% 19.5% 18.5%
Add: D&A 19.7% 18.0% 18.6% 18.7% 19.3%
Adjusted OIBDA margin 41.6% 41.7% 38.4% 38.2% 37.8%
Russia Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Operating margin 25.2% 26.2% 22.9% 22.4% 22.5%
Add: D&A 18.6% 16.6% 17.2% 17.6% 18.2%
OIBDA margin 43.7% 42.8% 40.1% 40.1% 40.8%
Ukraine Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Operating margin 20.2% 22.5% 16.7% 9.9% 8.8%
Add: D&A 18.8% 18.2% 20.0% 19.5% 21.4%
OIBDA margin 38.9% 40.7% 36.7% 29.4% 30.1%
Armenia Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Operating margin 20.1% 26.9% n/a 5.6% 6.6%
Add: Loss from impairment
of goodwill in Armenia - - 155.0% - -
Adjusted operating margin 20.1% 26.9% 17.4% 5.6% 6.6%
Add: D&A 25.7% 24.8% 28.9% 34.2% 32.9%
Adjusted OIBDA margin 45.8% 51.7% 46.3% 39.7% 39.5%
Turkmenistan Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Operating margin 22.0% 24.3% 23.4% 19.4% 16.8%
Add: D&A 15.4% 15.1% 14.8% 16.2% 16.6%
OIBDA margin 37.4% 39.4% 38.1% 35.6% 33.4%
Uzbekistan Q2'15 Q3'15 Q4'15 Q1'16 Q2'16
Operating margin - - n/a n/a n/a
Add: D&A - - 61.1% 34.1% 31.9%
OIBDA margin - - 3.2% 6.9% 10.5%
***
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 Mar 31, As of June 30,
RUB mln 2016 2016
Current portion of LT debt and of finance
lease obligations 46,273 49,586
LT debt 259,968 225,569
Finance lease obligations 10,650 10,297
Total debt 316,891 285,452
Less:
Cash and cash equivalents 44,389 24,956
ST investments 30,961 27,978
LT deposits 28,886 30,409
Effects of hedging of non-ruble denominated
debt 14,636 12,369
Net debt 198,019 189,740
Free cash-flow can be reconciled to our consolidated statements
of cash flow as follows:
For the six For the six
months ended months ended
RUB mln June 30, 2015 June 30, 2016
Net cash provided by operating activities 72,016 63,674
Less:
Purchases of property, plant and equipment (40,921) (25,545)
Purchases of intangible assets[6] (12,720) (14,126)
Proceeds from sale of property, plant and
equipment 1,326 1,300
Investments in associates - (1,326)
Free cash flow 19,701 23,977
LTM Adjusted OIBDA can be reconciled to our consolidated statements
of operations as follows:
Six months Six months Twelve months
ended ended June 30, ended
RUB mln Dec 31, 2015 2016 June 30, 2016
A B C = A + B
Net operating profit 46,195 41,084 87,279
Add: Impairment of goodwill in
Armenia 3,516 - 3,516
Add: D&A 41,803 41,080 82,883
LTM ADJUSTED OIBDA 91,514 82,164 173,678
--------------------------------------------------
[6] 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 and purchase of 3G license in
Ukraine in the amount of
RUB 7.0 bln in 2015
***
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 June 30,2016 AND As of December 31,2015
(Amounts in millions of RUB)
As of June 30, As of December 31,
2016 2015
NON-CURRENT ASSETS:
Property, plant and equipment 288 402 302 662
Investment property 359 364
Intangible assets 110 609 109 064
Investments in associates 8 545 9 299
Deferred tax assets 8 816 9 287
Other non-financial assets 682 480
Other investments 34 386 34 667
Accounts receivable (related parties) 3 513 3 335
Other financial assets 17 773 25 203
Total non-current assets 473 085 494 361
CURRENT ASSETS:
Inventories 12 813 14 510
Trade and other receivables 37 252 34 542
Accounts receivable (related parties) 2 447 6 326
Short-term investments 27 978 49 840
VAT receivable 7 041 9 815
Income tax assets 3 655 5 190
Assets held for sale 461 549
Advances paid and prepaid expenses, other
current assets 5 665 4 781
Cash and cash equivalents 24 956 33 464
Total current assets 122 268 159 017
Total assets 595 353 653 378
EQUITY:
Equity attributable to equity holders 145 216 160 115
Non-controlling interests 6 218 8 256
Total equity 151 434 168 371
NON-CURRENT LIABILITIES:
Borrowings 234 634 292 168
Deferred tax liabilities 29 094 27 346
Provisions 2 221 2 565
Other financial liabilities 554 676
Other non-financial liabilities 4 182 4 342
Total non-current liabilities 270 685 327 097
CURRENT LIABILITIES:
Borrowings 49 009 53 701
Provisions 5 691 7 863
Trade and other payables 82 981 57 756
Accounts payable (related parties) 1 702 1 809
Income tax liabilities 1 045 831
Other financial liabilities 7 991 9 778
Other non-financial liabilities 24 815 26 172
Total current liabilities 173 234 157 910
Total equity and liabilities 595 353 653 378
MOBILE TELESYSTEMS
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED June 30, 2016 AND 2015
(Amounts in millions of RUB except per share amount)
Three Three
months months
Six months ended Six months ended ended ended
June 30, June 30,
June 30, 2016 June 30, 2015 2016 2015
Net operating revenue
Service revenue 195 007 188 831 97 680 95 021
Sales of goods 21 219 14 042 10 456 7 669
216 226 202 873 108 136 102 690
Operating expenses
Cost of services (68 374) (63 400) (33 776) (31 028)
Cost of goods (20 053) (11 729) (10 307) (7 043)
Selling, general and administrative expenses (47 579) (44 745) (23 912) (22 449)
Depreciation and amortization expense (41 080) (40 669) (20 832) (20 221)
Other operating income/(expenses) 482 (611) (17) (94)
Operating share of the profit of associates 1 462 1 643 761 646
Provision for cash balances deposited in distressed
Ukrainian banks - (1 698) - -
Operating profit 41 084 41 664 20 053 22 501
Currency exchange gain 3 270 107 997 3 616
Other (expenses)/income:
Finance income 3 005 4 763 1 309 2 437
Finance costs (16 057) (12 609) (9 323) (6 561)
Other expenses (1 294) (599) (608) (594)
Total other expenses, net (14 346) (8 445) (8 622) (4 718)
Profit before tax 30 008 33 326 12 428 21 399
Income tax expense (6 720) (6 649) (3 457) (4 711)
Profit for the period 23 288 26 677 8 971 16 688
Loss for the period attributable to non-controlling
interests 275 1 284 85 386
Profit for the period attributable to owners of the
Company 23 563 27 961 9 056 17 074
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or
loss
Exchange differences on translating foreign operations (9 603) (12 042) (1 429) (3 085)
Net fair value loss on financial instruments (1 736) (3 402) (131) (811)
Other comprehensive loss (11 339) (15 444) (1 560) (3 896)
Total comprehensive income for the period 11 949 11 233 7 411 12 792
Less comprehensive loss for the period attributable to the
non-controlling interests 921 1 604 233 860
Comprehensive income for the period attributable to owners
of the Company 12 870 12 837 7 644 13 652
Weighted average number of common shares outstanding, in 1 989 1 988
thousands - basic 1 989 067 1 988 730 424 730
Earnings per share attributable to the Group - basiс: 11,85 14,06 4,55 8,59
Weighted average number of common shares outstanding, in 1 990 1 989
thousands - diluted 1 989 510 1 989 951 174 951
Earnings per share attributable to the Group - diluted: 11,84 14,05 4,55 8,58
MOBILE TELESYSTEMS
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED June 30, 2016 AND 2015
(Amounts in millions of RUB)
Six months ended Six months ended
June 30, 2016 June 30, 2015
Profit for the period 23 288 26 677
Adjustments for:
Depreciation and amortization 41 080 40 669
Finance income (3 005) (4 763)
Finance costs 16 057 12 609
Income tax expense 6 720 6 649
Currency exchange gain (3 270) (107)
Change in fair value of financial instruments 179 (91)
Amortization of deferred connection fees (491) (569)
Share of the profit of associates (442) (839)
Inventory obsolescence expense 621 86
Allowance for doubtful accounts 1 131 1 483
Change in provisions 6 317 4 752
Other non cash items (793) (294)
Movements in operating assets and liabilities:
Increase in trade and other receivables (7 458) (4 824)
Decrease/(increase) in inventory 950 (2 516)
Decrease/(increase) in VAT receivable 461 (1 599)
Decrease in advances paid and prepaid expenses 843 3 113
(Decrease)/Increase in trade and other payables and other current liabilities (3 337) 2 103
-
Dividends received 1 181 1 471
Income taxes paid (2 960) (4 207)
Interest received 2 081 2 062
Interest paid (net of interest capitalised) (15 479) (9 849)
Net cash provided by operating activities 63 674 72 016
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (25 545) (40 921)
Purchases of intangible assets (net of purchases of 3G licences in Ukraine and
4G licenses in Russia) (14 126) (12 720)
Purchases of 4G licenses in Russia/3G licences in Ukraine (2 598) (7 044)
Proceeds from sale of property, plant and equipment and assets held for sale 1 300 1 326
Purchases of short-term investments (4 891) (28 790)
Proceeds from sale of short-term investments 22 040 4 422
Purchase of other investments (2 591) (39 867)
Proceeds from sale of other investments 2 97
Investments in associates (1 326) -
Net cash used in investing activities (27 735) (123 497)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash flows under capital transactions with related parties 3 063 4 252
Loan principal paid (26 035) (9 009)
Proceeds from loans 1 036 43 818
Repayment of notes (17 904) (479)
Notes and debt issuance cost paid - (1 213)
Finance lease principal paid (168) (224)
Dividends paid - (82)
Cash outflow under credit guarantee agreement related to foreign-currency
hedge (1 034) -
Other financing activities - 5
Net cash (used in)/provided by financing activities (41 042) 37 068
Effect of exchange rate changes on cash and cash equivalents (3 405) (2 924)
NET DECREASE IN CASH AND CASH EQUIVALENTS: (8 508) (17 337)
CASH AND CASH EQUIVALENTS, at beginning of the period, including cash and cash
equivalents within assets held for sale of 156 as of January 1, 2015 33 464 61 566
CASH AND CASH EQUIVALENTS, at end of the period 24 956 44 229
Less cash and cash equivalents within assets held for sale - (109)
CASH AND CASH EQUIVALENTS, at end of the period 24 956 44 120