Page 115 - RusRPTDec18

9.2.8 Telecoms corporate news
Russia's MobileTelesystems (MTS) mobile operator and its subsidiary MTS Bank will start to issue short-term loans to virtual credit cards to its subscribers, Kommersant daily reported on November 19. The first such offer in Russia will credit the users on a virtual account not pegged to any actual credit card or online and offline purchases. This year MTS consolidated its stake in MTS Bank seeking to improve and integrate its fintech services spectrum. Following the increase of MTS stake from 27% to 55% Fitch Ratings upgraded the long- term Issuer Default Rating of MTS Bank from 'B+' to 'BB-'. The new virtual financing will be available on a unique 16-digit token tied to a specific device and operated through MTS mobile applications. The virtual card can also be added to Apple Pay and Samsung Pay services, as well as pay on physical contactless payment terminals and NFC-compatible ATMs. The limit on such short-term loans will be set at RUB150,000. Previously other major operators Vimplecom (in partnership with Alfa Bank) and MegaFon also launched virtual payment services, but it did not provide crediting options, Kommersant reminds.
9.2.10 Utilities corporate news
Russian hydropower holding and one of the largest renewable energy investors RusHydro said it would cut in 2018 investment programme by 22% from RUB124.5bn to RUB96.7bn, Interfax reported on November 8 citing the company's Eurobond presentation. Total investment programmed for 2018- 2022 is planned at RUB362bn ($5.34bn), down from the RUB443bn previously approved for 2019-2023
Rosseti has released its 9mo18 IFRS results. Total revenues increased 9.6% y/y to RUB 719.6bn, with the key driver being electricity distribution revenues while grid connection revenues slid due to the decline at FSK in 9mo18. Total costs increased 13% y/y. Thus, EBITDA (on the company's calculation) printed at RUB 222.1bn, up 4% y/y. Net income reached RUB 88.7bn, implying a 9.4% y/y increase.Overall, reported net income growth was good. At the same time, the key takeaway is that, given management’s stance to increase dividends in absolute terms, rather than focus on a nominal payout, at net income growth of 9.4% could imply potential dividends for 2018 of RUB 0.01/share for the common shares and RUB 0.05/share for the preferreds, translating into dividend yields of 1.7% and 3.3%, respectively. That is significantly below the current 10-year OFZ YTM of 8.5% and the next 12M average MSCI Russia dividend yield of close to 7%..
Enel Russia has raised RUB9.5bn ($143mn) from the Eurasian Development Bank (EABR) for the construction of a wind farm in the Rostov region, the company said on November 22. Enel plans to commission a 78-turbine wind farm with 90MW capacity by 2020. Enel Russia, along with RusHydro hydropower major, is one of the most visibly active utility majors in the renewable energy segment. So far the government support program for the sector enabled Enel Russia to launch projects to produce 291MW. "Securing project financing is a major milestone for the wind project and significantly lowers the risks of project delays," VTB Capital commented on November 23. However, one concern VTB has is the mismatch between the capacity bid, with which Enel won the tender, and the size of the loan, which is already 15% higher than the originally envisioned capex of the project. "It seems, taking into consideration the EUR-denominated price of the equipment and rouble
115 RUSSIA Country Report December 2018 www.intellinews.com