Page 92 - RusRPTJune18

March, Mail.Ru Group said it expected the revenue to grow 23–28% to 68.6–71.4bn in 2018, and EBITDA to amount to 21–22bn.
9.2.8 Telecoms corporate news
MegaFon announced on Saturday that it had signed an agreement to combine its Euroset stores with handset retailer Svyaznoy. MegaFon will get 25% plus one share in the JV, meaning it will not have to consolidate the Euroset stores it got from the split-up of the company with VEON earlier this year. Control of the JV will be with the majority shareholder of Svyaznoy, an entity called SLV, which is controlled by Oleg Malis. The joint company will have around 5,000 outlets, of which, in our understanding, around 2,000 are currently Euroset stores and the remainder Svyaznoy outlets. The parties expect the deal to close by mid-May.
MegaFon announced last Friday that it had completed the acquisition of a 100% stake in Neosprint, which holds 24 MHz in the 3.4-3.6 GHz frequency band in Moscow. The company plans to deploy the frequencies for 5G as soon as this June in stadiums during the FIFA World Cup. MegaFon will pay a total of R0.72bn for the company, with 70% due by May 7 and the remainder three months after that.
Russian mobile telecom major VEON (former VimpelCom) reported first-quarter financials with total consolidated IFRS revenues and Ebitda slipping by 1.4% and 0.8% year-on-year, respectively, to $2.3bn and $0.85bn, while beating market expectations by 1% and 7%. At the same time the company managed to improve the Ebitda margin by 0.2pp y/y to 38%, 2.2pp above the expectations. "The results are positive and suggest an improving performance in VEON's key market - Russia," Aton Equity commented on May 14. In Russia alone VEON increased the revenues by 2.9% y/y to $1.2bnm with Ebitda up by 5% to $0.4bn, making a 38% Ebitda margin.
Russian "big four" mobile operator MTS reported 3% year-on-year increase in revenues in the first quarter of 2018 to RUB107.9bn ($1.76bn), with Oibda jumping by 25% y/y to RUB52bn and net profit 24% y/y higher at RUB15.4bn. It must be noted, however, that earnings growth was boosted by a change in accounting policy. On like-for-like basis operating income before depreciation and amortization ( Oibda) expanded by 6.5% y/y to RUB44.6bn at a margin of 41%, Aton Equity estimated on May 23. Nevertheless, Oibda and bottom line beat the consensus expectations by 3% and 18% in the first quarter, respectively. Revenue growth was driven by 4.6% revenue gain in Russia thanks to a solid increase in mobile revenues (+4.4% y/y).
9.2.10 Utilities corporate news
Russian metals and energy major En+ of sanctioned billionaire Oleg Deripaska reported twofold jump in net profit to $667mn for the first quarter of 2018. The profit was reported for the last quarter before the US Department of Treasury (USDT) has imposed a new round of Russian sanctions on April 6, singling out the businesses of Deripaska, such as En+, Rusal aluminium major, EuroSibEnergo utility major, and others. Rusal, controlled by En+, reported first-quarter financials on May 11, posting the last positive numbers of the pre-sanction period: 22% net profit growth to $531mn,
92 RUSSIA Country Report June 2018 www.intellinews.com