Page 123 - RusRPTMay19

87% y/y gain, with the remainder being mostly ad revenue. For MTS, ivi could be a valuable addition to its non-mobile portfolio of services, continuing non- core acquisitions such as ticket services Ticketland.ru and Ponominalu.ru, Sberbank believes.
Mobile TeleSystems (MTS), one of Russia’s main mobile operators, has launched a corporate venture fund targeting startups across Russia and neighboring countries. The fund expects to invest around 1bn rubles (approximately $15mn at the current exchange rate) in early-stage startups over the next two years, reports East-West Digital News (EWDN). Last year the corporation launched an in-house accelerator, MTS StartUp Hub, but startups may receive funding from the new corporate fund independently from their participation, or not, in this accelerator. Through its accelerator, equity investments and acquisitions, MTS aims to develop an ecosystem of services and products that go beyond the traditional telecom sector. Last year, for example, the operator acquired two online event ticketing companies as well as an international eSports club. It also has stakes in Ozon, one of the largest Russian e-commerce companies. As a result, MTS offers a variety of mobile applications (MTS Taxi, MTS Music, MTS Books, etc.), B2B cloud solutions, data analysis based on Big Data, cybersecurity systems and telemedicine services. MTS aims to support its startups in Russia and beyond: “We are developing a network across the world’s key centres of innovation, opening representation office there,” MTS Innovation Center’s director Vladimir Khrenkov was quoted as saying. Two other major Russian mobile operators, Beeline and MegaFon, tend to abstain from venture investments, which they find too risky. Rather, they tend to develop partnerships and in-house innovation, Vedomosti learned from these companies. Last year, no fewer than 27 corporations completed 77 investment deals involving startups in Russia — three times as much as in 2017, according to RVC data cited by Vedomosti.
9.2.10 Utilities corporate news
RusHydro’s board has approved its 2019-24 capex plans. On Friday 29 March, the Board of Directors of RusHydro approved the updated investment programme for 2019-24. According to the company, the total capex for this period could print at RUB439.1bn (including VAT), with RUB233.8bn being allocated to the company’s Russian Far East operations. Moreover, the approved investment plan states that the company aims to renew as much as 5GW of capacity by 2029 and commission 1.5GW of new capacity in 2019-24. Our View: During its CMD in February and the FY18 results release, RusHydro provided its forecast of RUB382.8bn in capex for 2019-23, so the approved RUB439.1bn of capex up to 2024 looks in line. That suggests an additional RUB56.3bn of investment, which is similar to the RUB59.7bn that RusHydro was expecting for 2023. At the same time, we are more conservative on the capex outlook, seeing annual capex (excluding VAT) at close to RUB100bn. Nevertheless, our forecast includes RUB141bn (including VAT) of modernisation capex for 2020-23, with RusHydro not accounting for it at the moment (expecting it close to RUB140-150bn). We believe that the capex growth associated with modernisation will be favourable for the company’s investment case, creating value with a guaranteed return attached to it.
Utility Enel Russia has released its 1Q19 results, beating analysts estimates
(which were at the top of the consensus range). With a 29% y/y improvement in the bottom line, the company appears poised to reaffirm its status as the highest dividend yield payer in the sector, capable of delivering yet another 12%+ yield for FY19 on top of the 13.1% payable in the coming months on the back of FY18. Our unchanged 12- month Target Price of RUB1.24 implies an ETR of 31%: Buy reiterated.
123 RUSSIA Country Report May 2019 www.intellinews.com