Page 19 - bne_Tech_12_2018

Fintech
December 2018 www.intellinews.com I Page 19
Russia's Qiwi payment system beats expectations in 3Q18
IntelliNews Pro
Russia's payment system Qiwi surprised analysts on the upside by posting an increase in revenues of 62% y/y to RUB5.2bn ($79mn) in the third quarter of 2018, beating consensus estimates
by 10%. . Qiwi’s adjusted Ebitda was up 23% y/y to RUB1.6bn and was 13% above consensus expectations.
Qiwi previously posted strong second-quarter results, but the margins continued to be pressured by new projects Sovest, Tochka and Rocketbank. In the third quarter, however, "Ebitda dynamics improved from previous quarters due to the growth of the high margin Payment Services business and a better performance from Tochka," VTB Capital commented on November 15.
In the segment breakdown, Payment Services growth has accelerated, with the E-commerce and Money Remittances verticals as the main drivers. In addition, Qiwi's board said it could review the previously announced suspension of dividend payments in 1Q19.
"The reported improvement in adjusted net income dynamics supports our expectations of a turnaround in Qiwi's profitability, which we think will help the stock to re-rate," VTB commented, reiterating a Buy recommendation on Qiwi at an unchanged 12-month target price of $25 implying an estimated total return (ETR) of 79%.
In October Qiwi announced the launch of a multi- banking platform based on its instalment card Sovest and signed a partnership agreement with Tatarstan-based AK Bars Bank, one of Russia's top 20 banks.
"We see this news as an important product development, which is likely to help Qiwi reduce the credit risks related to Sovest and add a lower- risk, commission-based business to the Sovest platform," VTB Capital wrote on the partnership with AK Bars on October 22. BCS Global Markets did not believe that the partnership in itself will sufficiently boost Qiwi's financials, but welcomed the development.