Page 132 - RusRPTDec20

Service approved the deal, whose completion is expected by the end of January 2021, subject to customary closing conditions. In 2019, Zarplata generated total revenue of 854mn, according to its unaudited non-IFRS internal data. Based on HeadHunter’s due diligence of Zarplata to date, Zarplata’s revenue recognition policy is similar to IFRS, however there can be no assurance that this policy was applied consistently in historical periods. Zarplata will operate separately from HeadHunter and will remain accessible at its existing web address, www.zarplata.ru. It is currently anticipated that the Zarplata management team will remain in place and will continue to be involved in further operations.
9.2.8​ Telecoms corporate news
Russian mobile majors MTS (​Mobile TeleSystems​) reported revenue growth of 5% year on year under IFRS in 3Q20​, with Russia accounting for 98-99% of total revenue and Ebitda. Adjusted Ebitda increased by 3% y/y at a margin of 45% and no major provisions for MTS Bank. Net income was up by 2% on lower interest income, but was under pressure from foreign currency loss impact and discontinued operations. As reported by ​bne IntelliNews,​ previously in 2Q20 MTS ​released solid IFRS numbers​, showing resilience to lockdown challenges and lifting inter-regional roaming fees in Russia. MTS is an anchor asset of ​AFK Sistema multi-industry investment conglomerate​.
MTS announced 2 November, that it had agreed to sell a 100% stake in NVision Group to its parent company Sistema for around RUB 401mn (​the final sum could be adjusted based on NVision’s results when the deal closes). Independent advisor KPMG provided the valuation. Sistema will assume NVision’s RUB 860mn of net debt, and Sistema plans to merge the company with its subsidiary Sitronics, which provides IT solutions for B2B/G customers. The deal includes the sale of NVision’s system integration assets. At the same time, MTS will retain the assets used to develop its product portfolio, as well as the FORIS BSS/OSS billing system that was previously part of NVision. MTS bought NVision Group from Sistema for RUB 11.2bn in 2015. An MTS representative told RBC that the difference between NVision’s current valuation (RUB 401mn) and the amount paid five years ago (RUB 11.2bn) is due to MTS retaining the billing system that formed the largest part of the asset’s value in 2015. The main goal of the acquisition of NVision in 2015 was to integrate the billing system into MTS, according to RBC. The reverse sale of the remaining part of NVision Group is taking place because the assets are not part of MTS’ product portfolio and they require additional investment. The assets are also not a priority for MTS’ strategy implementation, according to the MTS representatives quoted by RBC.
Rostelecom​’s 3Q20 numbers beat our and consensus expectations across the board​. The company also upgraded its FY20 outlook, and it now expects revenue and EBITDA to grow at least 9%. We see the results release and upgraded guidance as supportive for our BUY stance on the stock.
132 ​RUSSIA Country Report​ December 2020 www.intellinews.com