Page 183 - RusRPTMay21

New acquisition to expand Salesforce capabilities of 2 March for more details). Still, we need to see more evidence of progress in those areas to justify additional upside.
Qiwi releases unaudited 4Q20/FY20 IFRS results, holds conference call
The quarterly results released 30 March, were generally in line with consensus, with adjusted EBITDA and adjusted net profit down 10% q/q and 23% q/q, respectively, following the restrictions imposed on a significant part of Qiwi's cross-border payment services on 7 December 2020. Quarterly net profit was fully generated by the Payment Services segment, while other segments collectively posted a RUB162mn loss in 4Q20.
FY21 guidance reflects array of uncertainties
Total net revenue is expected to drop 15-25% over 2021.
Net revenue from the Payment Services segment is expected to drop 15-25% over 2021.
Adjusted net profit is expected to drop 15-30% over 2021.
The worst-case declines reflect a scenario in which Qiwi is unable to restore its currently suspended cross-border payment operations and also loses more than 50% of its sports betting-related revenue due to a new regulation expected to come into force in September.
Impact of CBR’s partial suspension of operations on 7 December 2020 remains material
The impact of the 25 days of suspension on net revenue from payments in 4Q20 is estimated at RUB500-600bn. Actual net revenue from payments in 4Q20 was RUB5.8bn, including the suspension period. CBR allowed Qiwi to resume payments to “certain key foreign merchants”, but they are “not significant” in volume. They are important to some customers, as the corresponding merchants are large global players such as Alibaba.
Betting market regulation
By September, only one payment processor should be authorized to process sports betting payments in Russia. The authorization is to be made by “the President of Russia based on a proposal made by the Government”. Qiwi and a competitor are currently bidding for this role, although Qiwi did not make any statements about the probability of being chosen as the payment processor.
At the same time, management believes that Qiwi should be able to retain the revenue generated by QIWI Wallet from the betting industry, as this does not fall under the new regulation, including betting
183 RUSSIA Country Report May 2021 www.intellinews.com