Page 168 - RusRPTApr21

business through digital assets,” Forbes Russia quoted Ilya Pushkin, the managing partner of Nechaev’s fund, as saying,
9.2.8 Telecoms corporate news
Veon is in talks to acquire OTM adtech company in Russia. According to Vedomosti’s sources, Veon already filed for antitrust approval, which the agency confirmed. Veon is considering acquiring more than 51% for OTM; the price tag has not been disclosed. OTM was created in 2010, offers services of programmatic ad buying, and owns Videonow and VideoTarget digital ad networks (the latter may not be part of the deal). Vedomosti estimates revenue of the entities that are reportedly part of the deal at Rb0.54bn in 2019 (based on SPARK-Interfax data) and the total revenue of OTM, including entities not part of the deal, at Rb0.9bn.
Mobile TeleSystems (MTS) posted 4Q20 IFRS. The results were solid, while the company pointed to an increase in DPS and a new buyback.
· Revenue grew 7% y/y (to Rb133.7bn) on the back of 6% increase in mobile service revenue in Russia (ARPU +7%, subscribers – 1%) – acceleration from 3% in 3Q20 due to seasonally low pressure from a drop in roaming revenue. Other driver – growth in handset and software sales (+17%). Bank revenue grew 2%.
· Adj. EBITDA grew 1% y/y (to Rb52.5bn; 39% margin) – around flat like-for-like, considering cRb1bn one-off provision in the telecom segment in 4Q19 – due to a one-off provision in the telecom segment (details were not disclosed)
· Net income stood at Rb13.1bn (10% margin) – a 2.4x jump y/y due to the comparison base factor (in 4Q19, MTS booked a one-off loss on the sale of the business in Ukraine) and thanks to lower interest expenses
· FCF in 2020 under MTS’ methodology was Rb62bn (includes deals, does not include lease spend) – compared to Rb50-55bn annual spend on regular dividends. FCF levered, on our estimates, was Rb38bn, down 26% y/y due to the deconsolidation of the Ukrainian business and higher Capex – Rb97bn (+17% y/y)
· Guidance 2021: at least +4% revenue and EBITDA, CapEx of Rb100-110bn (+3-13% y/y), with the CapEx increase due to FX, the competitive environment and new initiatives.
Conference
· A new share buyback will likely be announced this year
· Dividends – management plans to recommend the BoD increase
DPS y/y in 2021 (i.e., above Rb29.5/share; 9% yield), as the number of shares outstanding declined after the buyback and MTS’s financial situation is solid
· Possibility of adding video to experiment for “free access” to
Call – Focus Points:
168 RUSSIA Country Report April 2021 www.intellinews.com