Page 95 - RusRPTAug20

quarters.
IVAS revenues grew 17% y/y to RUB4.6bn in 2Q20, with the growth rate accelerating from the previous quarter, when the respective revenues increased 11% y/y.
The FY20 guidance implies that the LFL revenue growth could be in the 'teens' and might exceed RUB100bn
9.2.8​ Telecoms corporate news
9.2.10 ​Utilities corporate news
Mobile TeleSystems​ (MTS) received the first 5G license in Russia ​for 24.25–24.65 GHz band. MTS plans to use it to offer advanced service solutions for its B2B clients. The license was granted for free and is valid for 5 years (until 16 July, 2025) and sets a requirement to launch 5G services within 2 years (by July 2022). The company will be able to start providing services when required regulatory documentation for 5G deployment in Russia is ready, an MTS spokesman told Vedomosti.
InterRAO reported its 1H20 operating and RAS results​. Electricity production was down 24.2% y/y (-22% y/y for Russian generation), while heat sendout slid 8.6% y/y (-8.4% y/y for Russian generation). This was driven by the warmer weather conditions y/y and the COVID-19 outbreak, as well as elevated water inflows in the country. The supply business faced a 3.7% y/y reduction in volumes vs. the 3.1% y/y growth in the customer base. Export volumes were down 44.7% y/y (the largest reductions in volumes was recorded to Finland and Lithuania: 71% y/y and 53% y/y, respectively) vs. the 24% y/y reduction in imports, caused by the slump in Nord Pool prices due to the warm weather and the pandemic.
InterRAO’s ​draft Strategy released​. The company targets RUB210bn of EBITDA by 2025 and RUB320bn for 2030 vs. RUB142bn for 2019. In order to achieve 50% growth in five years, and more than 100% in ten, the company plans to spend up to RUB500bn in the next five years and up to RUB1tn over the decade. M&A could account for the largest part of investments. InterRAO has opted to diversify its business, with a reduction in the international business. Export operations are to face a squeeze. The market share target in the supply business is set at 20% by 2030 (vs. 18% currently), with the supply business EBITDA growth 64%, or RUB41bn, by 2030. KOM NG, modernisation and the potential participation in the selection at the auction for capacity with a localised turbine would be the focus. The company could take part in renewables projects, distributed energy and grid power storage. The prospects for the heat business are limited. The generation business EBITDA is seen at RUB245bn by 2030 vs. RUB75bn in 2019. The dividend policy remains at least 25% of IFRS net income. The aim is to keep the base shareholder structure intact. It is not planned to cancel or divest the treasury stake. However, it could potentially be used for M&A or for a strategic investor sale. LTIP is part of the strategy, with a lock-up period of 3-5 years but no details on the size. Only top management would be part of the programme. TSR, FCF and the key target achievements have to be fulfilled. The programme could be launched by YE, with a 6-month weighted average price as the strike.
95​ RUSSIA Country Report​ August 2020 ​ ​www.intellinews.com