Page 119 - RusRPTJan22

a focus on hyper-local content that is not available on global video platforms. The company sees its Pakistani digital services revenues (including from JazzCash) more than doubling over the next three years.
The medium-term financial outlook offers positive implications for FCF, as EBITDA minus capex is set to expand. The company confirmed its dividend policy, which calls for paying out at least 50% of EFCF after licenses as long as net debt/EBITDA does not exceed 2.4. We believe the stock should be supported by the continued deconsolidation of tower assets, as there are 23.8k towers that have not yet been sold, including in Pakistan (10.2k towers, their sale is expected to be completed by the end of 2022), Ukraine (8k towers, in 2023) and Bangladesh (5.6k towers, in 2022 or 2023). Recall that VEON recently closed a deal to sell its Russian tower assets to Service-Telecom, which valued the towers at $63k apiece. We were also pleased to see that VEON is aligning its management motivation program with shareholder returns - the company announced that it was introducing performance shares with a three-year vesting period, while 50% of executives' annual short-term incentives will be in the form of shares.
9.2.10 Utilities & Renewables corporate news
Rosseti had commented on the possibility of negative dynamics in the financial results for 2021 (on an IFRS basis) due to external (macro) and internal factors. The company noted the decent dynamics of the 9mo21 results, but the impairment test is yet to be carried out. Thus, it is too early to forecast a positive profits performance in 2021. North Caucasus is negatively affecting the overall performance of the group, with the chronic underinvestment in the modernisation of the grids, high grid losses and low payment discipline. In addition, the increase in the key rate is unfavourable, as it affects the company’s cost of debt. Rosseti is also concerned about the growth in metals prices, which affects the cost of construction, and about the tariff growth being capped below CPI, as per the macro forecast. The financials are also going to be affected by the growth in FSK’s investment programme due to the BAM-2 and TransSib projects.
InterRAO is looking to export more electricity to the Baltic states.
According to Interfax, InterRAO said it is ready to increase its supply of power to the Baltic states, where prices surged after the Nordpool power supply peaked. Note that Lithuania previously blocked much of the supply from Belarus, thus limiting power volumes via Russia as well. Export remains volatile, unpredictable, unlike the generation segment. InterRAO’s main business is power generation, however export is also quite profitable now due to elevated prices in Northern Europe. Realistically, export has long been a hostage to politics, making it InterRAO’s least predictable business line
119 RUSSIA Country Report January 2022 www.intellinews.com