Russian mobile operator MegaFon announced that its consolidated revenues in Q2 2020 decreased by 8.3% year-on-year to RUB78.5 billion (USD1.1 billion), with service revenue down by 6.9% y-o-y to RUB73.4 billion and revenue from sales of equipment/accessories declining by 24.7% to RUB5.2 billion. Operating income before depreciation and amortisation (OIBDA) fell 8.4% y-o-y to RUB35.6 billion, although MegaFon highlighted that OIBDA margin remained flat at 45.4% while quarterly net profit improved 35.2% y-o-y to RUB4.0 billion. Operational CAPEX was reduced by 20.1% y-o-y to RUB13.1 billion in April-June 2020.
MegaFon noted that the revenue slump resulted from a significant drop in consumer and B2B communications spending amidst the COVID-19 pandemic, as a large number of retail stores were shut, roaming revenues plummeted due to border closures, parts of April-May were designated non-working days, and the operator offered free access to a range of services over an extended period for users in self-isolation. Fixed network revenue demonstrated slight growth of 1.0% y-o-y to RUB6.8 billion in 2Q20, driven by demand for residential broadband, information security services and cloud solutions, while MegaFon maintained its OIBDA margin primarily by reducing low-margin sales of equipment, cutting selling and marketing expenditure and reducing general expenses.