MTS group Q1 revenue grows 7.9%, driven by Russia

23 May 2016

Russian and CIS region operator Mobile TeleSystems (MTS) has posted consolidated group revenues of RUB108.1 billion (USD1.616 billion) for the first three months of 2016, an increase of 7.9% compared to the same period of last year, whilst Russian Q1 turnover grew 6.5% to RUB96.3 billion, or 89.1% of the total. Adjusted group EBITDA remained stable year-on-year at RUB41.3 billion in January-March 2016 whilst Russian EBITDA improved by 1.1% to RUB38.6 billion. Consolidated net profit increased by 33.3% y-o-y to RUB14.5 billion in 1Q16. The group’s active subscriber base grew 3.8% in twelve months to 108.3 million at 31 March 2016. MTS reiterated its group guidance for 2016: revenue growth of above 4%; adjusted EBITDA growth of minus 2% to positive 1%; and reduction of annual group CAPEX to RUB85 billion.

In divisional highlights, Russian mobile revenues grew 6.6% in Q1 2016, with underlying mobile service revenue improving 1% to RUB71.1 billion, while Russian mobile customers increased by 3.7%, with smartphone penetration reaching 50.3% at end-March. Fixed line business saw a 0.3% improvement in revenues to RUB15.4 billion in the quarter. In Ukraine, MTS (under the Vodafone brand) achieved 5% revenue growth in 1Q16 to UAH2.8 billion (USD110 million) driven by mobile data services adoption as its 3G network expanded to 19 Ukrainian regional centres, whilst the company also reported strong take-up of revised, rebranded international voice calling tariffs. In contrast, MTS in Armenia suffered 16% y-o-y revenue decline in Q1 due to macroeconomic factors affecting service usage such as international calling and roaming. Similarly, MTS Turkmenistan’s revenue fell 6% on macroeconomic-driven factors and a slight user base decline.

Russia, Mobile TeleSystems (MTS), Vodafone Ukraine