MOSCOW, November 17, 2015 /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 September 30, 2015.
Key Financial Highlights of Q3 2015
- Consolidated group revenue increased 7.4% y-o-y to RUB 115.0 bln
- Total revenue in Russia rose
4.7% y-o-y to RUB 103.9 bln
- Mobile service revenue in Russia improved 1.0% y-o-y to RUB 78.0 bln
- Data traffic revenue in Russia
grew 20.2% y-o-y to RUB 20.6 bln
- Handset sales in Russia
increased 58.8% y-o-y to RUB 12.6
bln
- Group Adjusted OIBDA down 1.9% y-o-y to RUB 48.0 bln
- OIBDA in Russia down 2.1%
y-o-y to RUB 44.5 bln
- MTS raises its Group guidance:
- Group revenue growth of more than 4%
- Revenue growth in MTS Russia of more than 4%
- MTS reiterates its guidance:
- Group OIBDA margin of more than 40%
- FY2015 CAPEX in the amount of RUB 92
bln reflecting planned investments in 3G network development
in Ukraine
Key Corporate and Industry Highlights
- Extension of strategic partner market agreement with Vodafone
expanding the scope of new partnership in Ukraine where the companies will roll out 3G
and develop new services in the market using the Vodafone
brand
- Acquisition of the licenses to provision mobile
telecommunications services in the GSM standard, LTE standard and
its subsequent modifications in the 1710-1785 MHz and 1805-1880 MHz
ranges in Amur Region, North-Ossetia-Alania, Orenburg Region, Perm
Krai and in Komi-Perm District, for a total amount of RUB 1.91 bln through an auction held by The
Federal Service for Supervision in the Sphere of Communications,
Information Technologies and Mass Media (Roskmonadzor)
- Signing of strategic partnership agreement with Google to
promote mobile Internet technologies and Google search services in
Russia
- Redemption of the RUB 10 bln
series 02 ruble-denominated
- Repurchase of the series 08 ruble denominated bond in the
amount of RUB 12.9 bln
- Payout of the semi-annual dividends of RUB 5.61 per ordinary MTS share (RUB 11.22 per ADR), or a total of RUB 11.592 bln based on H1 2015 financial
results
Commentary
Mr. Andrei Dubovskov, MTS
President and CEO, commented, "In Q3 2015, we delivered a 7.4%
year-over-year increase in Group revenue to RUB 115.0 bln. This growth was driven by strong
data adoption across our operating markets, and in Russia, our topline was supported by
increasing smartphone sales across our retail network. Group
adjusted OIBDA was RUB 48.0 bln, a
slight decline year-over-year as a result of due to the impact of
inflationary costs, reduced profitability in our non-Russian
businesses, and the impact of our new commercial policies in
retail. However, on a quarterly basis, revenue and Adjusted OIBDA
increased by more than 12%, which allowed MTS to once again outpace
the market."
Mr. Vasyl Latsanych, MTS Vice
President for Marketing, said, "For the quarter, total revenue in
Russia increased by 4.7%
year-over-year to RUB 103.9 billion.
Growth in our mobile business revenue equaled 6.4% as data usage
continues to drive growth. Data usage continues to be a primary
driver of growth as data traffic revenue increased by more than 20%
year-over-year and smartphone penetration exceeded 47%."
Mr. Alexey Kornya, MTS Vice
President for Finance and Investments, said, "In Russia, OIBDA for
the period was RUB 44.5 bln, or 2.1%
below Q3 2014, as increased handset sales put pressure on
profitability. Group net income declined 6.6% year-over-year to
RUB 14.4 bln, due to the impact of
OIBDA dynamics and a non-cash RUB 3.3
bln FOREX loss based on the value of our non-ruble
denominated debt. Free cash flow for the first nine months amounted
to RUB 29.2 bln, and CAPEX reached
RUB 73.1 bln. We had accelerated our
network build-out to H1 2015 from H2 2015, so our run-rate is
higher compared to last year. For the full year 2015, we expect
CAPEX to be in line with our guidance of RUB
92 bln, which includes the planned construction of 3G
networks in Ukraine."
Mr. Andrei Dubovskov concluded,
"We continue to see resilient markets in our countries of operation
and deliver strong topline growth through a sustained increase in
the usage of voice and data products and vigorous sales of data
generating devices in Russia.
Strong momentum in sales allows us to raise both our Group, and
Russia, revenue guidance to more
than 4%. We also reiterate our Group OIBDA margin guidance of
more than 40% as we continue to deliver on our market-leading and
innovative commercial strategies."
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.
MTS announces that as the Company had previously disclosed, the
US Department of Justice (DOJ) and the SEC are conducting an
investigation into MTS's business activities in Uzbekistan. In addition, MTS publicly
confirmed that it had been referenced in a civil forfeiture
complaint, filed by the DOJ, directed at certain assets of an
unnamed Uzbek government official. The complaint alleges that MTS
made corrupt payments to gain access to the Uzbek
telecommunications market. The Complaint alleges among other things
that MTS and certain other parties made corrupt payments to the
unnamed Uzbek official to assist MTS entering and operating in the
Uzbekistan telecommunications
market. The Complaint is solely directed towards assets held by the
unnamed Uzbek official, and none of MTS's assets are affected by
the Complaint.
MTS has made no provision in relation to the investigation
conducted by the US Department of Justice and the SEC regarding
MTS's business activities in Uzbekistan. In accordance with IAS 37
Provisions, Contingent Liabilities and Contingent Assets, a
provision should be recognized when a legal or constructive
obligation exists and such an obligation can be reliably estimated.
MTS continues to cooperate with the authorities. At the
current stage of the investigations, MTS has no reliable basis to
predict any outcome.
This press release provides a summary of some of the key
financial and operating indicators for the period ended
September 30, 2015. For full disclosure materials,
please visit
http://www.mtsgsm.com/resources/reports/.
* * *
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: http://www.mtsgsm.com.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 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