MOSCOW, November 17, 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
September 30, 2016.
Key Financial Highlights of Q3 2016
- Consolidated group revenue decreased by 1.3% y-o-y to
RUB 112.2 bln
- Total revenue in Russia
decreased by 0.8% y-o-y to RUB 103.1
bln
- Group adjusted OIBDA down 5.1% y-o-y to RUB 45.7 bln
- OIBDA in Russia down 3.0%
y-o-y to RUB 43.2 bln
- Group net profit fell 12.8% y-o-y to RUB
12.6 bln
- Sales of goods in Russia
increased by 8.0% y-o-y to RUB 13.6
bln
- Total subscriber base increased by 2.5% to 108.8 mln
- MTS's proprietary retail network in Russia increased to 5,998 stores
- Revenue in Ukraine increased
by 11.2% y-o-y to UAH 2.9 bln
- Total Group debt fell to RUB
267.9[1] bln as Net Debt/LTM Adjusted OIBDA remained stable
at 1.1x
Key Corporate and Industry Highlights
- Paid out in dividends RUB 24.0
bln or RUB 11.99 per ordinary
MTS share (RUB 23.98 per ADR) based
on H1 2016 results. Together with the earlier payment of
RUB 28.0 bln (RUB 14.01 per ordinary share or 28.02 per ADR)
based on FY2015 results, the total dividend paid per share in
calendar year 2016 was RUB 26 per
ordinary share, which is in line with the new Company's dividend
policy
- The Board of Directors approved a Tender Offer that was
launched on October 31, with the
proposed return of a maximum of RUB
4,934,527,300 to the Company's Holders of Shares of Common
Stock and ADS Holders
- MTS's majority shareholder, Sistema, has also agreed to sell an
amount of shares proportional to its aggregate ownership upon
completion of the tender, so that the total return to all
shareholders could reach RUB 10
bln
- 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 the Development of Information Technologies and
Communications of the Republic of Uzbekistan
- The launch of the mobile app "MTS Money", which enables
customers to upload virtual banking cards, tickets for public
transportation in Moscow and
discount coupons to their NFC-enabled smartphones
- The launch of a new payment system, allowing customers to leave
their cash and bank cards at home by which MTS subscribers
will be able to make payments from their mobile accounts in a
variety of stores or cafés
- The launch of a pilot project to utilize Big Data for the
development of MTS monobrand retail chain
- Acquisition of a regional asset of SMARTS to enhance services
in Republic of Mari El through
additional spectrum of 14.8 Mhz in the 1,800 Mhz range that will
allow to develop LTE networks
- Launched the Innovation Center, a department that brings a new
approach to business development through the launch of new products
and services. The Center uses a flexible methodology for service
development (the agile-methodology). The establishment of the
Innovation Center will enable the timeline for launching new
products to be reduced by 3x-4x
- Successfully placed RUB 10 bln
exchange-traded Series 2 bond with a first coupon rate of 9.4%,
which was one of the lowest ruble-based coupon rates among
corporate borrowers on the local market in recent years
- Redeemed series 05 ruble-denominated bond, which was issued on
July 28, 2009, by repaying the
remaining portion of the instrument in the amount of RUB 1.8 bln
- MTS was the first company in the history of Russian corporate
governance to launch an online service for electronic voting for
MTS shareholders
- MTS won the Telecommunications award in the country category at
the 2016-2017 World Branding Awards
- MTS and Samsung Electronics, the world-leading company in
consumer electronics and hi-end IT, announced the signing of a
memorandum with the intention to co-operate in developing 5G
technologies. Under the strategic partnership, companies will work
on innovations aimed at implementing LTE-Advanced Pro network,
developing the standards and deployment of 5G in Russia regions
- Partnership agreement with Huawei by which Huawei will supply a
broader range of smartphones and other consumer electronics for
sale through the MTS retail network
- The launch of Wi-Fi calling in Russia enabling subscribers to make voice
calls wherever there is a Wi-Fi connection (Voice over Wi-Fi)
- MTS terminated its rating relationship with Moody's Investors
Service Ltd
Commentary
Andrei Dubovskov, President and CEO of MTS commented, "For the
period we saw a slight revenue decline of 1.3% year-over-year to
RUB 112.2 bln. Macroeconomic factors
and competitive issues continue to impact our performance in many
ways, in particular voice and messaging usage in roaming, but in
general, our revenue trends have shown relative stability in
comparison to our peers throughout our markets of operations.
Vasyl Latsanych, Vice President, Strategy and Marketing,
highlighted, "Total revenue in Russia did decline slightly by 0.8% to
RUB 103.1 bln, as the weaker economy
impacts travel and roaming usage. Nevertheless, we saw stronger
data usage due to both the growth of customer usage and the
migration to data plans as smartphone penetration reached nearly
52%, and a 2.8% growth in subscribers. In our fixed-line business,
revenue increased slightly by 0.1% to RUB
15.1 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
improved.
"In Ukraine, revenue for the period increased by 11.2% to nearly
UAH 2.9 bln. Key drivers include a 2.7% increase in 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 and Turkmenistan fell during the period. Both
markets remain exposed to macroeconomic trends, which continue to
weaken voice and data usage."
Mr. Dubovskov continued, "Adjusted OIBDA declined 5.1%
year-over-year to RUB 45.7 bln. We
already warned of weaker Adjusted OIBDA performance when we lowered
our guidance for the year, and certain factors continued to impact
us, including competition, reduced usage of services sensitive to
macroeconomic factors and a lower contribution from foreign
subsidiaries due to ruble appreciation during the period."
Commented Alexey Kornya, Vice
President, Finance, Investments and M&A, "We saw relative
strength in our Russian operations as Russia OIBDA declined 3.0%
year-over-year. As indicated by our Group adjusted OIBDA
performance, Russia showed a
relative improvement in OIBDA quarter-on-quarter as well (8.8% vs
8.0% growth) when compared to 2015. Like in previous quarters,
roaming usage and its impact on overall revenues, as well as our
retail expansion and efforts to manage the increased competition
within the marketplace, continued to pressure profitability.
Mr. Kornya continued, "In Ukraine, adjusted OIBDA improved
year-over-year to nearly UAH 1.1 bln. We continue to see
improvement in Ukraine efficiency
as we realize the scale benefits of our 3G investments in the
market through rising subscriber levels and growing revenues from
voice and data products. In our other markets, OIBDA trends in
Armenia and Turkmenistan reflect revenue dynamics, as we
see customer usage impacted by the weakened economy through a
reduction in international dialing and roaming."
"Group net profit for the period decreased slightly
year-over-year to RUB 12.6 bln. This
included a RUB 2.7 bln loss on the
disposal of UMS LLC. Other factors impacting our net profit include
OIBDA dynamics, a decrease in non-cash FOREX loss from ruble
appreciation and a stronger ruble in relation to group
currencies and key non-ruble expenses."
"Free cash flow to date amounted to RUB
48.9 bln, an increase of 67.2% year-over-year through the
first nine months. Lower CAPEX spending of RUB 58 bln year-to-date is a key factor, and we
expect more moderate CAPEX spending to continue and be in line with
our guidance of RUB 85 bln. By the
end of the period, total debt stood at RUB
267.9 bln – net of leases and debt issuance costs – 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."
Mr. Dubovskov concluded, "While our quarterly performance was
below past performance, we feel strongly that MTS is
well-positioned for the future. In our key markets, we've seen the
effects of macroeconomic weakness, especially in segments like
roaming and small business, impact our results disproportionately
to our competitors. Despite these challenges, we have been
successful in sustaining our market share.
"Overall, we saw subscriber growth in our key markets of
Russia and Ukraine. We've completed our core network
build, and we now offer LTE in every region of Russia and 3G services throughout Ukraine. In Moscow, our market share in Internet and
pay-tv is increasing. Our expansion into complementary businesses
remains promising as we have issued more than 3.2 million of MTS
Money cards. Our balance sheet remains the strongest in the
business. We've sustained current net debt/adjusted OIBDA levels
for many quarters and generate sufficient cash flow to make a
healthy return to shareholders."
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 reiterates its Group revenue
outlook at 2-3% growth, after 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 reiterates its outlook on adjusted Group OIBDA
growth rate at -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 aims to reduce FY2016 CAPEX to 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:
18:00 hrs (Moscow time)
15:00 hrs (London time)
10:00 hrs (US Eastern time)
To take part in the conference call, please dial one of the
following telephone numbers and quote the confirmation code,
8926555
From Russia: + 7 495 213
1767
From the UK: + 44(0)20 3043 2002
From the US: + 1 719 325 2229
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: +1 719 457 0820 PIN 8926555
From the
UK: +44(0)20 7660 0134 PIN 8926555
This press release provides a summary of some of the key
financial and operating indicators for the period ended
September 30, 2016. For full
disclosure materials, please visit
http://www.mtsgsm.com/resources/reports/.
Financial
Summary
|
RUB
mln
|
Q3'16
|
Q3'15
|
y-o-y
|
Q2'16
|
q-o-q
|
Revenues
|
112,182
|
113,709
|
-1.3%
|
106,055
|
5.8%
|
Adjusted
OIBDA
|
45,691
|
48,139
|
-5.1%
|
40,656
|
12.4%
|
-
margin
|
40.7%
|
42.3%
|
-1.6pp
|
38.3%
|
2.4pp
|
Operating
profit
|
24,152
|
28,714
|
-15.9%
|
20,491
|
17.9%
|
-
margin
|
21.5%
|
25.3%
|
-3.8pp
|
19.3%
|
2.2pp
|
Net profit
|
12,551
|
14,393
|
-12.8%
|
9,056
|
38.6%
|
-
margin
|
11.2%
|
12.7%
|
-1.5pp
|
8.5%
|
2.7pp
|
Russia
Highlights
|
RUB
mln
|
Q3'16
|
Q3'15
|
y-o-y
|
Q2'16
|
q-o-q
|
Revenues[2]
|
103,060
|
103,917
|
-0.8%
|
97,435
|
5.8%
|
-
mobile
|
75,885
|
77,967
|
-2.7%
|
72,786
|
4.3%
|
-
fixed
|
15,096
|
15,076
|
0.1%
|
15,263
|
-1.1%
|
- integrated
services
|
1,067
|
240
|
344.6%
|
1,258
|
-15.2%
|
- sales of
goods
|
13,625
|
12,615
|
8.0%
|
10,552
|
29.1%
|
OIBDA
|
43,193
|
44,527
|
-3.0%
|
39,706
|
8.8%
|
-
margin
|
41.9%
|
42.8%
|
-0.9pp
|
40.8%
|
1.1pp
|
Net profit
|
14,461
|
13,448
|
7.5%
|
10,788
|
34.0%
|
-
margin
|
14.0%
|
12.9%
|
1.1pp
|
11.1%
|
2.9pp
|
Ukraine
Highlights
|
UAH
mln
|
Q3'16
|
Q3'15
|
y-o-y
|
Q2'16
|
q-o-q
|
Revenues
|
2,860
|
2,572
|
11.2%
|
2,745
|
4.2%
|
Adjusted
OIBDA
|
1,070
|
1,048
|
2.1%
|
827
|
29.4%
|
-
margin
|
37.4%
|
40.8%
|
-3.4pp
|
30.1%
|
7.3pp
|
Net profit
|
448
|
569
|
-21.3%
|
222
|
101.8%
|
-
margin
|
15.7%
|
22.1%
|
-6.4pp
|
8.1%
|
7.6pp
|
Armenia
Highlights
|
AMD
mln
|
Q3'16
|
Q3'15
|
y-o-y
|
Q2'16
|
q-o-q
|
Revenues
|
15,122
|
19,296
|
-21.6%
|
15,040
|
0.5%
|
Adjusted
OIBDA
|
6,519
|
9,984
|
-34.7%
|
5,944
|
9.7%
|
-
margin
|
43.1%
|
51.7%
|
-8.6pp
|
39.5%
|
3.6pp
|
Net
profit/(loss)
|
3,678
|
4,107
|
-10.4%
|
(1,991)
|
n/a
|
-
margin
|
24.3%
|
21.3%
|
3.0pp
|
n/a
|
n/a
|
Turkmenistan
Highlights
|
TMT
mln
|
Q3'16
|
Q3'15
|
y-o-y
|
Q2'16
|
q-o-q
|
Revenues
|
64
|
75
|
-14.5%
|
66
|
-3.5%
|
OIBDA
|
22
|
29
|
-23.9%
|
22
|
0.9%
|
-
margin
|
35.0%
|
39.3%
|
-4.3pp
|
33.4%
|
1.6pp
|
Net profit
|
10
|
16
|
-38.5%
|
10
|
1.1%
|
-
margin
|
15.0%
|
20.9%
|
-5.9pp
|
14.4%
|
0.6pp
|
Belarus
Highlights
|
BYN
mln
|
Q3'16
|
Q3'15
|
y-o-y
|
Q2'16
|
q-o-q
|
Revenues
|
175
|
144
|
21.6%
|
162
|
8.2%
|
Adjusted
OIBDA
|
80
|
67
|
19.0%
|
76
|
5.8%
|
-
margin
|
45.7%
|
46.7%
|
-1.0pp
|
46.8%
|
-1.1pp
|
Net profit
|
49
|
47
|
5.2%
|
47
|
6.1%
|
-
margin
|
28.2%
|
32.6%
|
-4.4pp
|
28.8%
|
-0.6pp
|
CAPEX
Highlights
|
RUB
mln
|
FY 2015
|
|
9M 2016
|
Russia[3]
|
79,619
|
|
52,055
|
- as % of
rev
|
20.4%
|
|
17.5%
|
Ukraine[4]
|
12,427
|
|
4,343
|
- as % of
rev
|
44.1%
|
|
19.4%
|
Armenia
|
1,371
|
|
418
|
- as % of
rev
|
15.2%
|
|
6.7%
|
Turkmenistan
|
500
|
|
117
|
- as % of
rev
|
9.8%
|
|
3.0%
|
Uzbekistan
|
2,195
|
|
-
|
- as % of
rev
|
47.6%
|
|
-
|
Group[5]
|
96,111
|
|
56,935
|
- as % of
rev
|
22.3%
|
|
17.6%
|
* * *
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 and the CIS. 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: 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 Third 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 profit or loss as follows:
Group (RUB
mln)
|
Q3'15
|
Q4'15
|
Q1'16
|
Q2'16
|
Q3'16
|
Operating
profit
|
28,714
|
20,026
|
21,629
|
20,491
|
24,152
|
Add: Loss from
impairment of goodwill in Armenia
|
-
|
3,516
|
-
|
-
|
-
|
Adjusted operating
profit
|
28,714
|
23,542
|
21,629
|
20,491
|
24,152
|
Add:
D&A
|
19,425
|
19,876
|
19,488
|
20,165
|
21,539
|
Adjusted
OIBDA
|
48,139
|
43,418
|
41,117
|
40,656
|
45,691
|
Russia (RUB
mln)
|
Q3'15
|
Q4'15
|
Q1'16
|
Q2'16
|
Q3'16
|
Operating
profit
|
27,275
|
23,481
|
21,599
|
21,954
|
24,107
|
Add:
D&A
|
17,252
|
17,634
|
16,984
|
17,752
|
19,086
|
OIBDA
|
44,527
|
41,115
|
38,583
|
39,706
|
43,193
|
Ukraine (RUB
mln)
|
Q3'15
|
Q4'15
|
Q1'16
|
Q2'16
|
Q3'16
|
Operating
profit
|
1,675
|
1,158
|
795
|
627
|
1,179
|
Add:
D&A
|
1,358
|
1,390
|
1,557
|
1,530
|
1,542
|
OIBDA
|
3,032
|
2,548
|
2,351
|
2,157
|
2,722
|
Armenia (RUB
mln)
|
Q3'15
|
Q4'15
|
Q1'16
|
Q2'16
|
Q3'16
|
Operating profit/
(loss)
|
680
|
(3,122)
|
120
|
136
|
196
|
Add: Loss from
impairment of goodwill in Armenia
|
-
|
3,516
|
-
|
-
|
-
|
Adjusted operating
profit
|
680
|
394
|
120
|
136
|
196
|
Add:
D&A
|
626
|
656
|
737
|
681
|
690
|
Adjusted
OIBDA
|
1,306
|
1,050
|
857
|
817
|
886
|
Turkmenistan (RUB
mln)
|
Q3'15
|
Q4'15
|
Q1'16
|
Q2'16
|
Q3'16
|
Operating
profit
|
326
|
330
|
278
|
209
|
197
|
Add:
D&A
|
203
|
209
|
232
|
207
|
215
|
OIBDA
|
529
|
538
|
510
|
416
|
412
|
OIBDA margin can be reconciled to our operating margin as
follows:
Group
|
Q3'15
|
Q4'15
|
Q1'16
|
Q2'16
|
Q3'16
|
Operating
margin
|
25.3%
|
18.0%
|
20.4%
|
19.3%
|
21.5%
|
Add: Loss from
impairment of goodwill in Armenia
|
-
|
3.2%
|
-
|
-
|
-
|
Adjusted operating
margin
|
25.3%
|
21.1%
|
20.4%
|
19.3%
|
21.5%
|
Add:
D&A
|
17.1%
|
17.9%
|
18.4%
|
19.0%
|
19.2%
|
Adjusted OIBDA
margin
|
42.3%
|
39.0%
|
38.8%
|
38.3%
|
40.7%
|
Russia
|
Q3'15
|
Q4'15
|
Q1'16
|
Q2'16
|
Q3'16
|
Operating
margin
|
26.2%
|
22.9%
|
22.4%
|
22.5%
|
23.4%
|
Add:
D&A
|
16.6%
|
17.2%
|
17.6%
|
18.2%
|
18.5%
|
OIBDA
margin
|
42.8%
|
40.1%
|
40.1%
|
40.8%
|
41.9%
|
Ukraine
|
Q3'15
|
Q4'15
|
Q1'16
|
Q2'16
|
Q3'16
|
Operating
margin
|
22.5%
|
16.7%
|
9.9%
|
8.8%
|
16.2%
|
Add:
D&A
|
18.2%
|
20.0%
|
19.5%
|
21.4%
|
21.2%
|
OIBDA
margin
|
40.7%
|
36.7%
|
29.4%
|
30.1%
|
37.4%
|
Armenia
|
Q3'15
|
Q4'15
|
Q1'16
|
Q2'16
|
Q3'16
|
Operating
margin
|
26.9%
|
n/a
|
5.6%
|
6.6%
|
9.5%
|
Add: Loss from
impairment of goodwill in Armenia
|
-
|
155.0%
|
-
|
-
|
-
|
Adjusted operating
margin
|
26.9%
|
17.4%
|
5.6%
|
6.6%
|
9.5%
|
Add:
D&A
|
24.8%
|
28.9%
|
34.2%
|
32.9%
|
33.6%
|
Adjusted OIBDA
margin
|
51.7%
|
46.3%
|
39.7%
|
39.5%
|
43.1%
|
Turkmenistan
|
Q3'15
|
Q4'15
|
Q1'16
|
Q2'16
|
Q3'16
|
Operating
margin
|
24.3%
|
23.4%
|
19.4%
|
16.8%
|
16.7%
|
Add:
D&A
|
15.1%
|
14.8%
|
16.2%
|
16.6%
|
18.2%
|
OIBDA
margin
|
39.4%
|
38.1%
|
35.6%
|
33.4%
|
35.0%
|
***
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:
RUB
mln
|
As of June
30, 2016
|
As of
September 30, 2016
|
Current portion of LT
debt and of finance lease obligations
|
49,586
|
59,753
|
LT debt
|
225,569
|
208,682
|
Finance lease
obligations
|
10,297
|
10,115
|
Total
debt
|
285,452
|
278,550
|
Less:
|
|
|
Cash and cash
equivalents
|
24,956
|
36,489
|
ST
investments
|
27,978
|
11,689
|
LT deposits
|
30,409
|
30,275
|
Effects of hedging of
non-ruble denominated debt
|
12,369
|
11,498
|
Net
debt
|
189,740
|
188,599
|
Free cash-flow can be reconciled to our consolidated statements
of cash flow as follows:
RUB
mln
|
For the nine
months ended
September 30, 2015
|
For the nine
months ended
September 30, 2016
|
Net cash provided by
operating activities
|
100,011
|
104,900
|
Less:
|
|
|
Purchases of property,
plant and equipment
|
(56,528)
|
(36,925)
|
Purchases of
intangible assets[6]
|
(16,529)
|
(20,885)
|
Proceeds from sale of
property, plant and equipment
|
2,279
|
3,130
|
Investments in
associates
|
-
|
(1,326)
|
Acquisition of
subsidiaries, net of cash acquired
|
-
|
(5)
|
Free cash
flow
|
29,233
|
48,889
|
LTM Adjusted OIBDA can be reconciled to our consolidated
statements of operations as follows:
RUB
mln
|
Q4 2015
ended
Dec 31,
2015
|
Nine months
ended
September 30,
2016
|
Twelve months
ended
September 30,
2016
|
|
A
|
B
|
C = A + B
|
Net operating
profit
|
20,026
|
66,272
|
86,298
|
Add: Impairment
of goodwill in Armenia
|
3,516
|
-
|
3,516
|
Add:
D&A
|
19,876
|
61,192
|
81,068
|
LTM ADJUSTED
OIBDA
|
43,418
|
127,464
|
170,882
|
***
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 September
30,2016 AND As of December 31,2015
|
|
(Amounts in millions
of RUB)
|
|
|
|
|
|
|
|
|
|
|
As of September
30,
|
As of December
31,
|
|
2016
|
2015
|
NON-CURRENT
ASSETS:
|
|
|
Property, plant and
equipment
|
275 670
|
302 662
|
Investment
property
|
367
|
364
|
Intangible
assets
|
106 728
|
109 064
|
Investments in
associates
|
9 064
|
9 299
|
Deferred tax
assets
|
6 594
|
9 287
|
Other non-financial
assets
|
577
|
480
|
Other
investments
|
34 215
|
34 667
|
Accounts receivable
(related parties)
|
3 603
|
3 335
|
Other financial
assets
|
15 712
|
25 203
|
Total non-current
assets
|
452
530
|
494
361
|
|
|
|
CURRENT
ASSETS:
|
|
|
Inventories
|
13 017
|
14 510
|
Trade and other
receivables
|
32 461
|
34 542
|
Accounts receivable
(related parties)
|
3 037
|
6 326
|
Short-term
investments
|
11 689
|
49 840
|
VAT
receivable
|
7 018
|
9 815
|
Income tax
assets
|
1 233
|
5 190
|
Assets held for
sale
|
632
|
549
|
Advances paid and
prepaid expenses, other current assets
|
5 299
|
4 781
|
Cash and cash
equivalents
|
36 489
|
33 464
|
Total current
assets
|
110
875
|
159
017
|
|
|
|
Total
assets
|
563
405
|
653
378
|
|
|
|
EQUITY:
|
|
|
Equity attributable
to equity holders
|
130 572
|
160 115
|
Non-controlling
interests
|
4 569
|
8 256
|
Total
equity
|
135
141
|
168
371
|
|
|
|
NON-CURRENT
LIABILITIES:
|
|
|
Borrowings
|
217 700
|
292 168
|
Deferred tax
liabilities
|
28 418
|
27 346
|
Provisions
|
2 397
|
2 565
|
Other financial
liabilities
|
544
|
676
|
Other non-financial
liabilities
|
4 114
|
4 342
|
Total non-current
liabilities
|
253
173
|
327
097
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
Borrowings
|
59 200
|
53 701
|
Provisions
|
6 189
|
7 863
|
Trade and other
payables
|
73 154
|
57 756
|
Accounts payable
(related parties)
|
1 454
|
1 809
|
Income tax
liabilities
|
2 251
|
831
|
Other financial
liabilities
|
6 475
|
9 778
|
Other non-financial
liabilities
|
26 368
|
26 172
|
Total current
liabilities
|
175
091
|
157
910
|
|
|
|
Total equity and
liabilities
|
563
405
|
653
378
|
MOBILE
TELESYSTEMS
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
|
FOR THE THREE AND
NINE MONTHS ENDED September 30, 2016 AND 2015
|
|
(Amounts in millions
of RUB except per share amount)
|
|
|
|
|
|
|
Nine months
ended
|
Nine months
ended
|
Three months
ended
|
Three months
ended
|
|
|
|
|
|
|
September 30,
2016
|
September 30,
2015
|
September 30,
2016
|
September 30,
2015
|
Continuing
operations:
|
|
|
|
|
|
|
|
|
|
Service
revenue
|
289 437
|
288 584
|
98 728
|
101 015
|
Sales of
goods
|
34 665
|
26 735
|
13 454
|
12 694
|
|
324 102
|
315 319
|
112 182
|
113 709
|
|
|
|
|
|
Cost of
services
|
(98 342)
|
(94 175)
|
(32 377)
|
(32 489)
|
Cost of
goods
|
(32 210)
|
(23 437)
|
(12 173)
|
(11 716)
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(69 102)
|
(64 949)
|
(22 846)
|
(21 107)
|
Depreciation and
amortization
|
(61 192)
|
(57 967)
|
(21 539)
|
(19 425)
|
Other operating
income/(expense)
|
759
|
(1 721)
|
110
|
(1 141)
|
Operating share of
the profit of associates
|
2 257
|
2 525
|
795
|
883
|
Provision for cash
balances deposited in distressed Ukrainian banks
|
-
|
(1 698)
|
-
|
-
|
|
|
|
|
|
Operating
profit
|
66
272
|
73
897
|
24
152
|
28
714
|
|
|
|
|
|
Currency exchange
gains/(losses)
|
3 067
|
(3 146)
|
(205)
|
(3 306)
|
|
|
|
|
|
Other
(expenses)/income:
|
|
|
|
|
Finance
income
|
4 185
|
6 698
|
1 180
|
1 935
|
Finance
costs
|
(21 674)
|
(19 258)
|
(5 864)
|
(6 709)
|
Other
(expenses)/income
|
(787)
|
(1 647)
|
500
|
(1 047)
|
Total other
expenses, net
|
(18
276)
|
(14
207)
|
(4
184)
|
(5
821)
|
|
|
|
|
|
Profit before tax
from continuing operations
|
51
063
|
56
544
|
19
763
|
19
587
|
|
|
|
|
|
Income tax
expense
|
(11 110)
|
(11 322)
|
(4 230)
|
(4 279)
|
|
|
|
|
|
Profit for the
period from continuing operations
|
39
953
|
45
222
|
15
533
|
15
308
|
|
|
|
|
|
Discontinued
operation:
|
|
|
|
|
|
|
|
|
|
Loss from
discontinued operation, net of tax
|
(4
021)
|
(4
591)
|
(2
889)
|
(1
354)
|
|
|
|
|
|
Profit for the
period
|
35
932
|
40
631
|
12
644
|
13
954
|
|
|
|
|
|
Loss/(income) for the
period attributable to non-controlling interests
|
182
|
1 723
|
(93)
|
439
|
|
|
|
|
|
Profit for the
period attributable to owners of the Company
|
36
114
|
42
354
|
12
551
|
14
393
|
|
|
|
|
|
Other
comprehensive (loss)/income
|
|
|
|
|
Items that may
be reclassified subsequently to profit or loss
|
|
|
|
|
Exchange differences
on translating foreign operations
|
(13 137)
|
(455)
|
(3 534)
|
11 587
|
Net fair value
(loss)/gain on financial instruments
|
(1 529)
|
(2 987)
|
207
|
415
|
Other
comprehensive (loss)/income for the period
|
(14
666)
|
(3
442)
|
(3
327)
|
12
001
|
Total
comprehensive income for the period
|
21
266
|
37
189
|
9
316
|
25
955
|
Less comprehensive
loss/(income) for the period attributable to the noncontrolling
interests
|
783
|
1 249
|
(138)
|
(355)
|
|
|
|
|
|
Comprehensive
income for the period attributable to owners of the
Company
|
22
049
|
38
438
|
9
178
|
25
601
|
|
|
|
|
|
Weighted average
number of common shares outstanding, in thousands -
basic
|
1 989 289
|
1 988 732
|
1 989 728
|
1 988 734
|
Earnings per share
attributable to the Group - basiс:
|
|
|
|
|
EPS from continuing
operations
|
19,85
|
22,46
|
7,72
|
7,58
|
EPS from discontinued
operation
|
- 1,69
|
- 1,16
|
- 1,41
|
- 0,35
|
Total EPS -
basic
|
18,15
|
21,30
|
6,31
|
7,23
|
Weighted average
number of common shares outstanding, in thousands -
diluted
|
1 990 175
|
1 989 953
|
1 990 171
|
1 989 955
|
Earnings per share
attributable to the Group - diluted:
|
|
|
|
|
EPS from continuing
operations
|
19,84
|
22,45
|
7,72
|
7,58
|
EPS from discontinued
operation
|
- 1,69
|
- 1,16
|
- 1,41
|
- 0,35
|
Total EPS -
diluted
|
18,15
|
21,28
|
6,31
|
7,23
|
MOBILE
TELESYSTEMS
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
FOR THE NINE MONTHS
ENDED September 30, 2016 AND 2015
|
|
|
|
(Amounts in millions
of RUB)
|
|
|
|
|
Nine months
ended
|
Nine months
ended
|
|
September 30,
2016
|
September 30,
2015
|
|
|
|
Profit for the
period
|
35
932
|
40
631
|
|
|
|
Adjustments
for:
|
|
|
Depreciation and
amortization
|
62 869
|
61 369
|
Finance
income
|
(4 186)
|
(6 698)
|
Finance
costs
|
21 965
|
19 380
|
Income tax
expense
|
10 926
|
10 789
|
Currency exchange
(gain)/loss
|
(3 058)
|
3 238
|
Change in fair value
of financial instruments
|
(243)
|
(91)
|
Amortization of
deferred connection fees
|
(678)
|
(1 044)
|
Share of the profit
of associates
|
(1 412)
|
(912)
|
Inventory
obsolescence expense
|
877
|
131
|
Allowance for
doubtful accounts
|
1 800
|
2 080
|
Change in
provisions
|
9 341
|
6 357
|
Non-cash loss on sale
of subsidiary in Uzbekistan
|
2 726
|
-
|
Other non-cash
items
|
(2 376)
|
(541)
|
|
|
|
Movements in
operating assets and liabilities:
|
|
|
Increase in trade and
other receivables
|
(4 961)
|
(9 150)
|
Decrease/(increase)
in inventory
|
230
|
(8 076)
|
Decrease/(increase)
in VAT receivable
|
387
|
(3 326)
|
Decrease in advances
paid and prepaid expenses
|
643
|
373
|
(Decrease)/Increase
in trade and other payables and other current
liabilities
|
(5 118)
|
4 360
|
|
-
|
|
Dividends
received
|
1 688
|
2 205
|
Income taxes
paid
|
(4 565)
|
(8 034)
|
Interest
received
|
2 420
|
3 667
|
Interest paid (net of
interest capitalised)
|
(20 307)
|
(16 697)
|
Net cash provided
by operating activities
|
104
900
|
100
011
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
Acquisition of
subsidiary, net of cash acquired
|
(5)
|
-
|
Purchases of
property, plant and equipment
|
(36 925)
|
(56 528)
|
Purchases of
intangible assets (net of purchases of 3G licences in Ukraine and
4G licenses in Russia)
|
(20 885)
|
(16 529)
|
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
|
3 130
|
2 279
|
Purchases of
short-term investments
|
(6 595)
|
(28 871)
|
Proceeds from sale of
short-term investments
|
40 039
|
17 962
|
Purchase of other
investments
|
(2 721)
|
(40 439)
|
Proceeds from sale of
other investments
|
5
|
97
|
Investments in
associates
|
(1 326)
|
-
|
Disposal of
discontinued operation, net of cash disposed of
|
(378)
|
-
|
Net cash used in
investing activities
|
(28
259)
|
(129
073)
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
Cash flows under
capital transactions with related parties
|
3 063
|
(3 408)
|
Loan principal
paid
|
(33 288)
|
(10 080)
|
Proceeds from
loans
|
1 457
|
49 671
|
Repayment of
notes
|
(19 702)
|
(2 460)
|
Proceeds from
issuance of notes
|
10 000
|
-
|
Notes and debt
issuance cost paid
|
(1)
|
(1 226)
|
Finance lease
principal paid
|
(251)
|
(313)
|
Dividends
paid
|
(28 945)
|
(39 455)
|
Cash outflow under
credit guarantee agreement related to foreign-currency
hedge
|
(2 032)
|
-
|
Other financing
activities
|
1
|
(48)
|
Net cash used in
financing activities
|
(69
698)
|
(7
319)
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(3 917)
|
(36)
|
|
|
|
NET
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS:
|
3
025
|
(36
417)
|
|
|
|
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
|
36
489
|
25
149
|
[1] Net of financial leasing and unamortized debt issuance cost
adjustment, as of September 30,
2016
[2] Revenue, net of intercompany between mobile, fixed and
integrated services
[3] 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
[4] Excluding purchase of 3G license in Ukraine in the amount of RUB 7.0 bln in 2015
[5] Excluding RUB 875 mln spent on
CAPEX in Uzbekistan in 2016, which
was stated under cash flows from discontinued operations
[6] Excluding costs of RUB 2.6 bln
in 2016 and purchase of 3G license in Ukraine in the amount of RUB 7.0 bln in 2015