Page 128 - RusRPTJun19

Rostelecom posted 3% y/y growth in revenues, supported by state contracts in the fixed broadband (+9%) and pay TV (+14%) segments, BCS Global Markets commented on May 15. Ebitda went up by 12% with 33.5% margin, beating the consensus estimates by 9%. BCS GM links Ebitda growth to base effects on Rostelecom's operational expense, "as in 1Q18 the company increased OpEx (including marketing) ahead of World Cup and due to video-surveillance contract; there was also a positive impact from change in corporate property tax."
"Big four" Russian mobile operators Mobile TeleSystems (MTS) posted 14% year-on-year net profit growth for the first quarter of 2019. The bottom line was supported by organic growth, the consolidation of MTS Bank, and a real estate deal in Russia for an undisclosed amount. Previously in the fourth quarter MTS posted solid results in both Russian and Ukraine, and pleased the market with dividend guidance promising over 10% dividend yield. In 1Q19 in Russia MTS posted revenue growth of 8%, out of which mobile service revenue increased 1.5%, sales of goods (incl. handset sales) were up 7%. Ebitda in Russia grew by 4% making a 47% margin. In Ukraine, revenues and Ebitda jumped by 19% in local currency terms. Overall revenues grew by 9% y/y (6pp contribution from MTS Bank consolidation), while Ebitda gained 6% to 47% margin and came in 3% above the expectations of BCS Global Market.
9.2.10 Utilities & renewables corporate news
Russian grid utility major Federal Grid Company (FDC) posted net income gain of 35% year-on-year in the first quarter of 2019, the company said. The improvement in net profit was attributed to revenues from an exchange of assets with Far Eastern Energy Management Company, which added RUB10.4bn to the bottom line. Without it, net income would have remained flat y/y at RUB20.3bn, BCS Global Markets commented on May 22. In the meantime the revenues of the company declined by 5.3% y/y. As a result, Ebitda gained 4.8% y/y, falling 3% short of BCS expectations. The revenue decline was attributed to a significant slide in (RUB3.3bn) in revenue from electricity sales, partly compensated by increased revenue from electricity transmission services (+6% y/y) thanks to 5.5% tariff hike on 1 July 2018.
Italian energy company Enel Green Power has begun construction of a 90-MegaWatt (MW) Azov wind farm, located in the Rostov region of Southern Russia, Renewable Energy World reported. The wind farm, which EGP says is the Rostov region’s first renewable facility, is owned by subsidiary Enel Russia. EGP is in charge of construction activities after having completed the development stage. The cornerstone laying ceremony for the Azov wind farm, on Thursday, was attended by Enel Russia General Director Carlo Palasciano Villamagna, the Governor of the Rostov Region Vasiliy Golubev, and Italian Ambassador to Russia Pasquale Terracciano. The wind facility will consist of 26 turbines spread across 133 hectares. Enel Russia’s investment in the Azov wind farm amounts to about $147.4mn. The project is expected to enter into service by the end of 2020 and will be able to generate about 320 GWh of clean energy each year once fully operational, avoiding the annual emission of about 260,000 tons of CO2 into the atmosphere, EGP says. Enel Russia was awarded the Azov wind farm, along with the 201-MW Murmansk wind farm, in the 2017 Russian government tender for the construction of 1.9 GW of wind capacity in the country. EGP is in charge of the development and construction of both projects. Enel Russia’s investment in the Murmansk wind
128 RUSSIA Country Report June 2019 www.intellinews.com