Monday, 26 June 2017

MegaFon demonstrates outstanding financial performance

MegaFon
Wednesday 05 March 14

Open Joint Stock Company “MegaFon”, a leading Russian universal telecommunications operator, announces its audited consolidated financial results[1] for the full year ended 31 December 2013. Key highlights of the Full Year 2013 • Consolidated revenue grew by 9.1% year-on-year (y-o-y)[2], to RUR 297,229 million • OIBDA increased by 13.2% y-o-y, to RUR 132,592 million • OIBDA margin increased to 44.6% versus 43.0% in 2012 • Net Profit increased by 16.3% y-o-y, to RUR 51,608 million • CAPEX amounted to RUR 47,144 million, a 4.2% increase y-o-y • Free Cash Flow totaled RUR 82,293 million, representing 16…

Open Joint Stock Company “MegaFon”, a leading Russian universal telecommunications operator, announces its audited consolidated financial results[1] for the full year ended 31 December 2013.

Key highlights of the Full Year 2013
• Consolidated revenue grew by 9.1% year-on-year (y-o-y)[2], to RUR 297,229 million
• OIBDA increased by 13.2% y-o-y, to RUR 132,592 million
• OIBDA margin increased to 44.6% versus 43.0% in 2012
• Net Profit increased by 16.3% y-o-y, to RUR 51,608 million
• CAPEX amounted to RUR 47,144 million, a 4.2% increase y-o-y
• Free Cash Flow totaled RUR 82,293 million, representing 16.3% growth y-o-y
• Net Debt as of 31 December 2013 was RUR 103,235 million
• The number of active mobile subscribers as of 31 December 2013 was 70.1 million[3],
an increase of 8.5% y-o-y

Key highlights of the Fourth Quarter 2013
• Consolidated revenue grew by 11.4% y-o-y, to RUR 79,732 million
• OIBDA declined by 2.9% y-o-y to RUR 30,522 million
• OIBDA margin decreased to 38.3% versus 43.9% in Q4 2012
• Net Profit decreased by 45.7% y-o-y to RUR 10,082 million
• CAPEX amounted to RUR 23,853 million, a 47.8% increase y-o-y
• Free Cash Flow amounted to RUR 8,824 million

Corporate Highlights for the Fourth Quarter of 2013

• We continued our focus on mobile data growth to maintain our leadership in 4G/LTE
- Effective 1 October 2013 we completed the acquisition of a 100% interest in Scartel/Yota[4] (“Scartel”), thereby strengthening our leading position in the 4G/LTE market in Russia
- We had launched 4G/LTE services in 49 regions in Russia as of 31 December 2013, covering c. 35.9% of the population in the country
- Our retail stores provided the widest range of innovative customized devices to stimulate data consumption, offering 29 models of smartphones, tablets, modems and routers, including 10 models of 4G/LTE enabled devices
• By the year-end 2013 we had completed construction of the communications infrastructure in the Coastal and Mountain clusters of the Olympic park in preparation for the XXII Winter Olympic and XI Paralympic Games in Sochi
- Over 680 2G/3G base stations were set up to provide quality operation over the network
- Over 270 4G base station were installed to support high-speed 4G services during the Games. The average mobile Internet speed over our 4G networks in the Bolshoi Ice Palace, which hosted the Channel One Cup in December 2013, was 35 Mb/s, with peak speed rates reaching 60 Mb/s
- Over 220 km of fiber-optic communication lines were installed

CEO Long-Term incentive plan (“LTIP”)

• On 4 March 2014, based on the Company’s strong financial performance in 2013 and in recognition of the contribution made by Ivan Tavrin, our CEO, in reaching the strategic targets set for the Company for 2013, MegaFon’s Board of Directors voted in favor of the acceleration of the vesting date of the final LTIP option granted to the CEO in 2012 from May 2015 to May 2014, so that on 1 May of this year, Mr Tavrin will be in a position to exercise all of his remaining options, which represent a 2.5% interest in the Company. At the same time the Board also voted to remove a provision of the LTIP which restricted Mr Tavrin from holding more than 5.0% of the Company prior to May 2017.

Ivan Tavrin, Chief Executive Officer of MegaFon, commented on the financial and operational results:

"We are very pleased with our results for 2013. As a result of strong operational performance we have managed to demonstrate once again outstanding financial results. MegaFon’s revenue in 2013 has grown by 9.1% y-o-y, significantly exceeding the average industry growth. Mobile data is still the biggest revenue generator and we expect this trend to continue in 2014. In 2013 the Company’s OIBDA margin amounted to 44.6%, a result which clearly reflects our efforts to improve our business efficiency.

2013 was a year of ambitious projects for MegaFon. With the acquisition of Scartel we consolidated our leading position in mobile data, which constitutes a key advantage in a highly competitive telecommunications market and which will lead to considerable cash flow savings in network rollout and maintenance. MegaFon’s industry leadership is premised on a strong technological foundation, which has allowed us to undertake successfully projects as different as the launch of the high-speed data highway ”DREAM” and the implementation of mobile number portability. Our superior network has also equipped MegaFon for large-scale undertakings such as the recent commercial launch of a LTE-Advanced network with the world's highest mobile Internet access speeds and provision of state of the art communications during the Olympic Games in Sochi. We also substantially expanded the range of our customized equipment in 2013, which facilitates our customers taking full advantage of the capabilities of our advanced network.

We are pleased to report that all of MegaFon’s stakeholders have benefited from our technological leadership which has translated into a high level of financial performance."


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