Page 112 - RUSRptOct18

The reported numbers open the possibility of downside risks to our model, and we await greater detail on recent utilisation at Ufa, Novosibirsk, and Samara. The company had previously released its 1H18 operating data, which featured 5% y/y growth in number of deliveries and a 3% y/y decline in IVF cycles. The latter has seen intensified competition YTD, and the entrance of new commercial players in Moscow that have pressured the PMC hospital. Thus, consolidated revenues added 8% y/y, while the LFL figure climbed 4% y/y. We note that three hospitals, in Ufa, Novosibirsk, and Samara, are in the ramping-up stage and still weigh on profitability. The company’s EBITDA margin was down 100bp y/y to 27%, while the net margin lost 200bp y/y to 17%. EBITDA and bottom line therefore remained flat y/y. In 1H18, capital expenditures doubled y/y to RUB 1.7bn, with the most sizable contribution to Tyumen construction, Samara completion, and the buyout of minorities in a number of assets. As net operating cash flow remained flat y/y, at RUB 1.9bn, net debt increased RUB 920mn YTD, with net debt/EBITDA of 0.7x as of June. We estimate MDMG being in a capex heavy period in the next several years and leverage staying at 2x net debt/EBITDA in 2019-20F, reflecting aggressive investments in eight greenfield hospitals.
Russian billionaire Roman Abramovich reportedly is asking for £3bn for his UK Premier League football club Chelsea , having already declined a $2.3bn bid, Bloomberg reported citing unnamed sources. Previous unconfirmed reports already claimed that Abramovich is preparing to sell the club . In a large profile on Abramovich's history in London , unnamed associates of Russian oligarch told Bloomberg that "he won’t do it happily" as the club has for years been his obsession, as well as a way of buying his way into high English society. Abramovich bought the club in 2013 for £140mn, since then lending Chelsea more than £1.1bn after which the club has topped the Premier League five times and won the UEFA Champions League. The oligarch's UK investor visa is currently under scrutiny amid worsened UK-Russia relations. In response Abramovich sought and gained an Israeli passport. Recent reports also indicated that Abramovich is restructuring his major assets to shield them from possible US sanctions . In August Abramovich cut his stake in Crispian Investments that holds a stake in Russian metals major Norilsk Nickel by 0.05% to 49.95%. In the meantime another of his assets, the metals and mining major Evraz , also changed its shareholder structure, dissolving the Cyprus-based Lanebook Ltd that controlled 62.74% in Evraz. Now Abramovich indirectly controls 30.52% in Evraz, Alexander Abramov, Alexander Frolov, and Evgeny Shvidler 20.92%, 10.45%, and 2.97%, respectively. Evraz has sizable US and Canada operations with 20% of the revenues coming from Evraz North America. Evraz's foreign assets overall account for 63% of the revenues. As far as Crispian Investments is concerned, it is not clear whether a change in the shareholder structure will have repercussions on shareholder conflict in Norilsk Nickel .
112 RUSSIA Country Report October 2018 www.intellinews.com