MOSCOW, May 21, 2012 /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
March 31, 2012.
Key Financial Highlights of Q1
2012
- Consolidated revenues up 1.1% q-o-q to $3,014 million
- Consolidated OIBDA[1] down 1.3% q-o-q to
$1,259 million with 41.8% OIBDA
margin
- Consolidated net income[2] of $512 million
- Free cash-flow[3] positive with $829 million for the first three months of
2012
Key Corporate and Industry
Highlights
- Commercial launch of the 3G network in the 900 MHz range in
Moscow and the Moscow region
- Redemption of $400 million 2012
Eurobond
- Awarded first license in Russia to provide wireless communication
services in the LTE TDD (time-division duplexing) standard in the
2595-2620 MHz range in Moscow and
the Moscow region
- Signing of an agreement with Samsung Electronics to cooperate
on retail projects, equipment sales and telecommunication services
in Russia
- Annual dividend recommendation by the MTS Board of Directors of
RUB 14.71 per ordinary MTS
share (approximately $1.01 per
ADR[4]) for the 2011 fiscal year, amounting to a total
of RUB 30.4 billion (approximately
$1.04 billion or 72% of US GAAP net
income)
Commentary
Andrei Dubovskov, President and CEO of MTS, commented, "Group
revenue for the quarter increased 3% year-over-year to reach
3.01 billion US dollars. We saw
sustained growth in usage of voice and data products, although the
exchange rate volatility masked the underlying growth dynamics in
markets such as Russia and
Armenia. For the period, total
revenues in Russia increased in
ruble terms by 6% year-over-year to 78.7 billion rubles, while
mobile service revenue increased 8.6%. Key drivers included
higher usage of mobile voice and data products, and growth and
expansion in our fixed-line business unit."
Alexey Kornya, MTS Vice President
and Chief Financial Officer, said, "We witnessed significant
improvement in profitability as we continue to emphasize retention
and improve customer value. For the period, we improved Group
OIBDA at a rate significantly faster than revenue by 12%
year-over-year to $1.26 billion US
dollars. Our OIBDA margin for the period reached 41.8%, an
increase of 3.4 percentage points from Q1 2011. Overall we
are seeing success in our efforts to increase profitability in our
operations as we saw OIBDA improvement in Russia, Ukraine and Armenia. In Russia, our OIBDA margin increased from 39.1%
to 43.1Q1 2012. The improvement came on the back of a significant
reduction in dealer commissions following our shift to
revenue-sharing based commission structures, churn improvement and
on-going efforts to manage costs."
Mr. Kornya continued, "Net income increased by nearly 60%
year-over-year to $512 million.
Gains made on the bottom line tied to gross margin and OIBDA
improvement were off-set largely by an increase in D&A expenses
as we greatly expanded our networks in recent quarters. We
also benefitted from ruble appreciation for the period, which led
to a non-cash foreign currency gain of $174
million. Given the fact that we are seeing an overall
reduction of SIM-card sales and related easing of competitive
pressures in Russia, we feel
comfortable narrowing the range of our OIBDA margin guidance for
2012 to 41 - 42%."
Mr. Dubovskov added, "As has recently been announced,
Roskomnadzor disclosed the conditions for the allocation of LTE
licenses in the Russian
Federation. Obviously the clarity of the tender and
framework for development are testament to the transparency of the
Russian telecommunications market; we also share a commitment among
both the regulator and operators to continue expanding access to
telecommunications services and encourage further infrastructure
development. Leveraging our current frequencies in the 2595 to 2620
MHz band, we recently launched a test zone for LTE TDD services in
Moscow and the Moscow region. While we are focused on
an MTS-owned and operated LTE FDD network as a standard for all of
Russia, we are examining
complementary ways to ensure that we are among the first to market
for LTE products and have a network capable of handling future
growth in data."
This press release provides a summary
of some of the key financial and operating indicators for the
period ended March 31, 2012. 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/
* * *
Mobile TeleSystems OJSC ("MTS") is the leading
telecommunications group in Russia, Eastern
Europe and Central Asia,
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, Uzbekistan, Armenia and Belarus, 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.
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.
4. According to the Russian Central Bank exchange rate of
29.2447 RUB/USD as of March 23, 2012, the date when MTS management
submitted its recommendation to the Board of Directors;
actual amount will differ depending upon relative exchange rates at
on date of payment.
For further information, please contact in Moscow:
Joshua B. Tulgan
Director, Investor Relations
Acting Director, Corporate Finance
Department of Investor Relations
Mobile TeleSystems OJSC
Tel: +7-495-223-2025
E-mail: ir@mts.ru
SOURCE Mobile TeleSystems OJSC