MTS beats Q1 forecasts despite profit decline – Mobile World Live

MTS beats Q1 forecasts despite profit decline

19 MAY 2015

Russia’s Mobile TeleSystems (MTS) reported a 14 per cent year on year decline in Q1 2015 net income to RUB10.9 billion ($221.30 million), which just beat analyst expectations.

The company, Russia’s largest mobile player with 74.5 million subscribers, said it was largely hit by a RUB3.5 billion ($70.69 million) loss based on a revaluation of its foreign currency denominated debt, and further losses of RUB1.7 billion ($34.36 million) from cash held in distressed Ukrainian banks.

The rouble, which has been impacted by western sanctions on Moscow due to the Ukrainian conflict, has also had a negative effect on handset sales and the profitability of roaming services, which further had a hit on the company’s revenue growth and led to declines in core profit margin in Q1, noted Reuters.

Overall revenue rose 2.7 per cent year on year to RUB100.2 billion ($2.2 billion).

Data traffic revenue in MTS’ core Russian market grew by 26 per cent year on year (to RUB18.1 billion), while total handset sales increased by 1.2 per cent.

Andrei Dubovskov, president and CEO at MTS, was defiant, claiming the company continues to benefit from growing smartphone penetration, strong unit sales in lower value handsets and increased data usage in all of its customer segments.

“Even in conditions of greater macroeconomic uncertainty, the Russian telecoms sector continues to present growth opportunities, but only operators with the right business model will be able to realise them,” he said.

Its operation in Armenia saw a revenue decline of 1.3 per cent, while Turkmenistan and Ukraine grew by 9.4 per cent and 9 per cent respectively.

In Q4 2014 MTS resumed operations in Uzbekistan. It reported a 324 per cent quarter on quarter rise in Q1 2015 revenue.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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