Page 100 - RusRPTMar20

Yandex and Sberbank​.
Mail.ru Group is looking for a new partner for ESforce, ​its esport asset, according to RBC. In November 2019, Mail.ru Group completed a transaction around e-sport assets with Modern Pick. The deal included the transfer of 51% of Mail.ru's ESforce to Modern Pick. Mail.ru Group got almost 20% of Modern Pick at closing, with the ultimate long-term size of the stake dependent on a number of operational KPIs for the combined company set for 2022 (could increase or decrease from the initial level). Mail.ru continued to hold a 49% stake in ESforce after the transaction (see our Mail.ru Group – New departure for ESports exposure?, of 16 July 2019). According to Mail.ru Group’s 3Q19 press release, Slightly Mad Studios (which develops racing video games) had signed a purchase agreement to ‘transfer substantial shares’ to Modern Pick. However, Slightly Mad Studios was ultimately acquired by Codemasters. And RBC names a failure to acquire Slightly Mad Studios by Modern Pick as a possible reason for the break-up of the Mail.ru/Modern Pick transaction
9.2.8​ Telecoms corporate news
Russian “big four” mobile operator ​MobileTelesystems​ (MTS) signed a six-year loan deal with VTB Bank for RUB30bn ($470mn), ​the company said on February 10. MTS plans to use the proceeds from the loan to repay an outstanding loan with maturity in 2020. “MTS is improving its debt profile maturity and decreasing refinancing risks,” BCS Global Markets commented on the deal, noting that short-term debt was in focus as it amounted to 26% of total debt and was just 53% covered by cash as of 9M19. Nevertheless, BCS GM does not expect any risks of redemption of MOBTEL 20 bonds (YTM 1.93%) in June 2020, “given the company’s good access to capital markets and bank loans”. Another issue, MOBTEL 23 (YTM 2.78%), trades almost on the ‘BBB-’ rated curve and “does not offer any investment opportunities,” BCS GM believes.
Russian internet major ​Mail.ru​ reported 4Q19 financial results, showing 19% year-on-year revenue growth in the quarter ​and 22% y/y growth to RUB87bn for 2020 overall, the company reported on February 27. Ad revenues remained the key source of top line growth (25% gain), while smaller services started to kick in as well (63% growth overall, including Youla classifieds platform, which doubled revenue y/y to RUB2.1bn). As followed by bne IntelliNews,​ Mail.ru’s margins were under pressure in the past quarters due to investments across various segments, such as gaming, foodtech, delivery services, transportation solutions, and others. In 4Q19 Ebitda remained suppressed inching by 1% y/y (10% in 2019 overall to RUB29.8bn; 34% margin) due to top-line growth deceleration, higher agent & partner fees, staff costs. Net income declined 18% (up by 4% in 2019 to Rb15.6bn) due to an increase in interest expense.
9.2.10 ​Utilities corporate news
Russian power company Enel Russia has held a strategy day, presenting its outlook on the 2020-22 financials. ​The period is one of the most challenging in the company’s 25-year history, as it fights back against profit pressures after losing its coal-fired power plant. As we anticipated, the company shielded investors from bottom line volatility by offering a fixed 3-year dividend of RUB 3bn annually (an 8.3% yield to the current price). While this
100​ RUSSIA Country Report​ March 2020 ​ ​www.intellinews.com