Monday, 21 August 2017

Rostelecom reports Q2, 1H results

Rostelecom
Thursday 22 August 13

Rostelecom, Russia’s national telecommunications operator, today announces its consolidated financial results for the second quarter and six months ending June 30th, 2013 prepared in accordance with IFRS. 1H highlights: When comparing year-on-year performance for the first half of 2013, it is important to note that substantial one-off revenues (“one-offs”) has been recorded in the first quarter of 2012. Consolidated revenue increased by 2% year…

Rostelecom, Russia’s national telecommunications operator, today announces its consolidated financial results for the second quarter and six months ending June 30th, 2013 prepared in accordance with IFRS.

1H highlights:

When comparing year-on-year performance for the first half of 2013, it is important to note that substantial one-off revenues (“one-offs”) has been recorded in the first quarter of 2012.

Consolidated revenue increased by 2% year-on-year to RUB 154.1 billion, excluding one-offs in the first quarter of 2012; reported revenue decreased by 5% year-on-year, including one-offs in the first quarter of 2012;
OIBDA1 of RUB 57.7 billion with an OIBDA margin of 37.4% (36.9% in 2012);
Net income of RUB 13.7 billion (reflects the change in Svyazinvest’s net profit recognition2);
Capital expenditure3 of RUB 31.9 billion, representing 20.7% of consolidated revenues;
Net debt4 of RUB 181.9 billion with a net debt/annualized OIBDA ratio of 1.6x as at 30 June 2013;
Net Cash from Operations of RUB 45.2 billion (up 3% y-o-y) and FCF5 of RUB 13.3 billion.

Q2 highlights:

Consolidated revenue up 1% year-on-year to RUB 77.0 billion;
OIBDA of RUB 28.8 billion with an OIBDA margin of 37.4% (36.9% in 2012);
Net income of RUB 7.3 billion (reflects the change in Svyazinvest’s net profit recognition);
Capital expenditure of RUB 7.0 billion, representing 9.1% of consolidated revenues.

Sergey Kalugin, Rostelecom’s President, commented: “In terms of our operational results, we are growing our subscriber base in some of the industry’s key growth segments – Broadband and Pay TV. There is a great deal of work to do in improving financial results of the Company, but we are pleased with the early progress we are making. The Company’s reorganization is almost completed, and in terms of our infrastructure, 3G networks have now been launched in 21 regions. We have also enhanced our management team, which is now made up of like-minded, highly successful professionals with vast experience in telecoms, finance and marketing. A number of key areas have been identified where improvements should be made if Rostelecom is to maximise its efficiency. We are finalising the details of our strategy, which will be submitted to the Board, and it will focus on accelerating the upgrade of our network infrastructure, improving customer experience and developing products that will distinguish Rostelecom from competition and deliver sustainable growth – Rostelecom now certainly has the ingredients in place to deliver this.”

Kai-Uwe Mehlhorn, Vice-President - Chief Financial Officer, noted: “The results indicate that Rostelecom is continuing to substitute its traditional income streams with some of the faster-growing market segments, such as pay TV and broadband. Due to the relatively recent launch of our 3G networks, penetration among our subscribers for mobile data services is still at a low level, and revenue from data services is limited. Management initiatives have already begun to have a positive effect on the business. However, the Company will not be able to measure the extent of this positive influence until subsequent reporting periods. 2013 is a transitional year for the Company, and according to our forecasts, we will see slight revenue growth by the year-end, with margins expected in the range of 36-39%. We are now establishing areas of future growth, but it will take some time before this growth is realised.”


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