UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report
of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities
Exchange Act of 1934
For the month of May, 2022
Commission File Number: 001-15094
Mobile TeleSystems Public Joint Stock Company
(Translation of registrant’s name into English)
4, Marksistskaya Street
Moscow 109147
Russian Federation
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
MTS Reports Q1 2022
Results
| • | Q1
2022 Consolidated Group Revenue increased 8.5% year-over-year to RUB 134.4 bn. |
| • | Q1
2022 Group Adjusted OIBDA1 increased 2.0% year-over-year to RUB 56.5 bn. |
| • | Q1
2022 Group Net Profit2 amounted to RUB 3.9 bn. |
MOSCOW, May 18,
2022 — Mobile TeleSystems Public Joint Stock Company (“MTS” or “the Company”) (NYSE: MBT; MOEX: MTSS),
Russia’s largest mobile operator and a leading provider of media and digital services, announces its first-quarter 2022 financial
and operating results.
In Q1 2022, Consolidated
Group Revenue increased 8.5% year-over-year to reach RUB 134.4 bn, primarily driven by robust top-line performance in the Company’s
Telecom, Fintech, and Media3 verticals. Group Adjusted OIBDA saw moderate growth of 2.0% year-over-year to RUB 56.5 bn, primarily
driven by solid business performance in core telecom services. In Q1 2022, Group Net Profit amounted to RUB 3.9 bn.
Viacheslav Nikolaev,
President & CEO, commented: “In Q1 2022, MTS demonstrated steady execution amid an evolving external environment,
delivering solid results across many key financial indicators. Our combination of a robust, resilient core telecom business together
with emerging high-potential digital verticals has proven once again to be a firm foundation for our continued long-term development.
In the current environment, we remain laser focused on ensuring daily business continuity, maintaining ample liquidity and a strong balance
sheet, and providing reliable, uninterrupted high-quality services for our customers. I remain confident in our ability to navigate challenges
and am happy to once more reaffirm our commitment to deliver for all of our stakeholders.”
1 Adjusted
OIBDA for 1Q 2022 doesn't include a loss from impairment of non-current assets of RUB 207 mln.
2 Attributable
to owners of the Company
3 Financial
results of operating segment «Media» are presented within «Other» category in the Group’s consolidated
financial statements
Segment highlights
Telecom
| • | Russia
connectivity services revenue increased 6.7% year-over-year to reach RUB 104.8 bn. |
| • | Russia
three-month active mobile subscribers declined slightly quarter-on-quarter to 80.0 m. |
| • | Russia
sales of handsets and accessories declined 10.7% year-over-year to RUB 13.8 bn in Q1
2022. |
| • | Monthly
active MyMTS app users increased slightly to 26.2 m at the end of the reporting period. |
Fintech
| • | Fintech
revenue increased 47.5% year-over-year in Q1 2022 to reach RUB 14.9 bn. |
| • | MTS
Bank net income for Q1 2022 amounted to RUB 751 m. |
| • | MTS
Bank clients grew 17.6% year-over-year to surpass over 3.0 m at the end of the quarter. |
| • | MTS
Bank mobile app 3-month active users increased to more than 1.8 m at the end of 1Q22. |
Media
| • | Over-the-top
media subscribers surged 16.6% quarter-on-quarter standing at 4.7 m at the end of Q1
2022. |
| • | Total
media pay-TV viewers grew 8.3% quarter-on-quarter to more than 9.0 m by the end of Q1
2022. |
Ecosystem
| • | MTS
ecosystem clients reached 11.0 m at the end of Q1 2022, up 70% from the prior-year period. |
| • | Average
products per customer increased to 1.49, up from 1.34 in the prior-year period. |
Financial results
Consolidated MTS Group key figures
(RUB bn)
| |
| 1Q22 | | |
| 1Q21 | | |
| Change,
% | |
Revenue | |
| 134.4 | | |
| 123.9 | | |
| 8.5 | % |
o/w
Russia4 | |
| 130.0 | | |
| 120.8 | | |
| 7.6 | % |
Adjusted
OIBDA5 | |
| 56.5 | | |
| 55.4 | | |
| 2.0 | % |
o/w
Russia | |
| 54.9 | | |
| 54.1 | | |
| 1.5 | % |
Operating
profit | |
| 26.7 | | |
| 28.6 | | |
| -6.7 | % |
Profit
attributable to owners of the Company | |
| 3.9 | | |
| 16.2 | | |
| -76.2 | % |
Cash
CAPEX6 | |
| 37.3 | | |
| 29.3 | | |
| 27.2 | % |
Net
debt7 | |
| 431.0 | | |
| 336.3 | | |
| 28.2 | % |
Net debt
/ LTM Adjusted OIBDA | |
| 1.9 | | |
| 1.5 | | |
| 26.7 | % |
3M
2022 highlights | |
| 3M22 | | |
| 3M21 | | |
| Change,
% | |
Operating
cash flow | |
| 9.0 | | |
| 14.3 | | |
| -37.0 | % |
Free cash
flow ex-Bank & cash proceeds from sale of VF Ukraine | |
| -20.0 | | |
| 11.3 | | |
| n/a | |
Russia results (accounts for
over 96% of Group revenue)
(RUB
bn) | |
| 1Q22 | | |
| 1Q21 | | |
| Change,
% | |
Revenue | |
| 130.0 | | |
| 120.8 | | |
| 7.6 | % |
B2C | |
| 88.9 | | |
| 84.0 | | |
| 5.9 | % |
Connectivity | |
| 64.3 | | |
| 61.8 | | |
| 4.1 | % |
sales of handsets | |
| 11.4 | | |
| 13.9 | | |
| -17.6 | % |
bank revenue | |
| 12.4 | | |
| 8.1 | | |
| 53.8 | % |
other | |
| 0.7 | | |
| 0.2 | | |
| 203.6 | % |
B2B/G | |
| 27.2 | | |
| 23.3 | | |
| 17.0 | % |
Connectivity (ex bulk sms) | |
| 16.1 | | |
| 14.9 | | |
| 8.2 | % |
Marketer | |
| 5.2 | | |
| 4.2 | | |
| 24.6 | % |
sales of handsets | |
| 2.4 | | |
| 1.6 | | |
| 50.4 | % |
bank revenue | |
| 2.1 | | |
| 1.7 | | |
| 19.4 | % |
cloud&other | |
| 1.5 | | |
| 0.9 | | |
| 63.6 | % |
B2O | |
| 19.2 | | |
| 17.4 | | |
| 10.0 | % |
Eliminations | |
| -5.3 | | |
| -3.9 | | |
| 36.6 | % |
Adjusted
OIBDA5 | |
| 54.9 | | |
| 54.1 | | |
| 1.5 | % |
margin | |
| 42.2 | % | |
| 44.8 | % | |
| -2.6 | p.p |
Net profit | |
| 3.0 | | |
| 15.2 | | |
| -80.2 | % |
margin | |
| 2.3 | % | |
| 12.6 | % | |
| -10.3 | p.p |
#
of MTS Retail stores8 | |
| 5562 | | |
| 5334 | | |
| 4.3 | % |
4 Figures
for 1Q 2021 have been adjusted for separate presentation of operations in Czech Republic.
5 Adjusted
OIBDA for 1Q 2022 doesn't include a loss from impairment of non-current assets of RUB 207 mln.
6 Net of cash proceeds under
sharing agreement.
7 Excluding lease obligations.
8 Number of owned and franchised MTS stores in operation at the end
of the reporting period.
For Q1 2022, Group
Revenue increased 8.5% to RUB 134.4 bn driven primarily by growth in core connectivity services as well as bank revenue and other
sources, which more than offset a decline in sales of handsets & accessories.
Connectivity
services revenue in Russia grew 6.7% year-over-year in Q1 to RUB 104.8 bn supported by solid core telecom performance, including
both mobile and fixed-line services. Bank revenue continued to see robust year-over-year growth, up 47.7% to reach RUB 14.5 bn.
In retail, sales of handsets and accessories in Russia declined 10.7% year-over-year to RUB 13.8 bn for the quarter.
Group Adjusted
OIBDA saw moderate growth of 2.0% year-over-year to RUB 56.5 bn, with the largest contributions coming from solid business performance
in telecom services as well as improved marginality in sales of handsets and accessories.
In Q1 2022, Group
Net Profit amounted to RUB 3.9 bn. Versus the year-ago period, negative impacts were observed from increased financing costs amid
a higher interest rate environment; greater depreciation & amortization reflecting recent CAPEX intensity as well as an incomparable
base due to M&A activity; and FX effects and revaluation of securities in the current macroeconomic environment.
Q1 2022 Group
Cash Capital Expenditures amounted to RUB 37.3 bn, with an increase of 27.2% versus the year-ago quarter largely due to accelerated
purchases of network equipment in 2022.
At the end of Q1
2022, MTS’s Net Debt9 stood at RUB 431.0 bn with a net debt weighted average interest rate of 8.9%. The increase
of 2.3 p.p. from the prior quarter largely reflected the impact of a sharply higher interest rate environment in Russia on floating debt
instruments. The Group’s Net debt ex-LL9 to Last-Twelve-Months Adjusted OIBDA ratio stood at 1.9x.
9 Excluding
lease liabilities.
Shareholder returns
In May, the MTS
Board of Directors recommended that shareholders approve at the AGM scheduled for June 22 annual dividends of RUB 33.85 per ordinary
MTS share based on the Company’s full-year 2021 financial results, equivalent to a total of RUB 66.3 billion (RUB 66,334,910,976.95)
when including quasi-treasury shares owned by MTS subsidiaries. A recommended record date to receive FY 2021 dividends – July 12,
2022. The previous 3-year dividend policy completed at the end of 2021. Adoption of a new dividend policy has been postponed for the
time being.
Other country markets
Armenia
(AMD
bn) | |
| 1Q22 | | |
| 1Q21 | | |
| Change,
% | |
Revenue | |
| 11.8 | | |
| 11.5 | | |
| 3.3 | % |
OIBDA | |
| 6.4 | | |
| 5.9 | | |
| 7.9 | % |
margin | |
| 54.0 | % | |
| 51.7 | % | |
| +2.3 | p.p |
Net profit | |
| 0.55 | | |
| 1.9 | | |
| -71.2 | % |
margin | |
| 4.6 | % | |
| 16.7 | % | |
| -12.1 | p.p |
In Armenia,
revenue in Q1 2022 grew 3.3% year-over-year to reach AMD 11.8 bn reflecting increase in subscribers compared to Q1 2021. For the quarter,
Armenia OIBDA increased 7.9% to AMD 6.4 bn driven by business performance and costs reduction. In Q1 2022, mobile subscribers in Armenia
amounted to 2.2 m.
Belarus
(BYN
m) | |
| 1Q22 | | |
| 1Q21 | | |
| Change,
% | |
Revenue | |
| 351 | | |
| 314 | | |
| 11.8 | % |
OIBDA | |
| 185 | | |
| 170 | | |
| 8.8 | % |
margin | |
| 52.7 | % | |
| 54.1 | % | |
| -1.4 | p.p |
Net profit | |
| 90 | | |
| 86 | | |
| 4.7 | % |
margin | |
| 25.7 | % | |
| 27.2 | % | |
| -1.5 | p.p |
In Belarus,
which is not consolidated, revenue in Q1 2022 increased 11.8% year-over-year to reach BYN 351 m. Belarus OIBDA grew 8.8% to BYN 185 m,
driven by core business performance (growth in revenue from data transfer). Mobile subscribers in Belarus remained largely unchanged
at 5.7 m at the end of the reporting period.
Czech Republic10
(CZK
m) | |
| 1Q22 | | |
| 1Q21 | | |
| Change,
% | |
Revenue | |
| 675 | | |
| 530 | | |
| 27.4 | % |
OIBDA | |
| 2 | | |
| 31 | | |
| -93.5 | % |
margin | |
| 0.4 | % | |
| 5.8 | % | |
| -5.4 | p.p |
Net profit | |
| 38 | | |
| 27 | | |
| 40.7 | % |
margin | |
| 5.6 | % | |
| 5.1 | % | |
| +0.5 | p.p |
In Q1 2022 in Czech
Republic, revenue increased 27.4% year-over-year to reach CZK 675 m, OIBDA declined 93.5% y-o-y to CZK 2 m and net profit amounted to
CZK 38 m.
10 Nvision
Czech Republic’ tailors in-house software solutions, provides support and managed services to telecom operators, delivers electronic
and mechanical manufacturing services.
Recent company news
Corporate developments
In March, MTS announced
that President & CEO Viacheslav Nikolaev had acquired 19,983,816 ordinary shares in the Company, in addition to shares previously
acquired under MTS’s long-term incentive programs. Following share transfer, Mr. Nikolaev’s ownership stake in MTS increased
to more than 1.0% and the joint effective stake of Sistema PJSFC (“Sistema”) and its subsidiaries in MTS declined to below
50%.
***
In March, the MTS
Board of Directors confirmed the appointment of Larisa Bodyagina as Vice President for Human Resources effective April 5, 2022.
Prior to joining MTS, Larisa Bodyagina worked from 2018 as Director for Personnel & Organizational Development of Russia’s
Pyaterochka supermarket chain, part of the X5 Retail Group.
***
In March, Konstantin
Ernst informed the Company he would be stepping down from his role as Director on the MTS Board of Directors effective March 17,
2022.
***
In March, MTS established
a Corporate ESG Center to be headed by Yury Savelev. The ESG Center will oversee the Company's ESG strategy and integrate best ESG practices
across the Company's business verticals and digital ecosystem. In addition, the ESG Center will explore the development of commercial
products aimed at solving urgent social and environmental problems.
***
In March, MTS published
its audited Consolidated Financial Statements under International Financial Reporting Standards (IFRS) for the twelve months ended December 31,
2021. The document can be found at the Company’s Investor Relations website at:
http://ir.mts.ru/investors/financial-center/financial-results/
***
In April, the MTS
Board of Directors set June 22, 2022 as the date of the Company’s next Annual General Meeting of Shareholders (“the
AGM”), which will be held in absentia. The record date for the Company’s shareholders entitled to participate in the AGM
has been set for May 30, 2022.
In May, the Board
of Directors recommended that shareholders approve at the AGM scheduled for June 22 annual dividends of RUB 33.85 per ordinary MTS
share based on the Company’s full-year 2021 financial results, equivalent to a total of RUB 66.3 billion (RUB 66,334,910,976.95)
when including quasi-treasury shares owned by MTS subsidiaries. A recommended record date to receive FY 2021 dividends – July 12,
2022.
Matters submitted
to the AGM agenda by the Board include:
| • | Approval
of the MTS PJSC Annual Report; MTS PJSC Annual Financial Statements, including MTS PJSC Profit &
Loss Statement; and distribution of profits and losses of MTS PJSC based on FY 2021 results
(including dividend payments); |
| • | Approval
of the composition of the MTS PJSC Board of Directors; |
| • | Approval
of the composition of the Auditing Commission; |
| • | Approval
of the Company’s auditor; |
| • | Approval
of the Company Charter as amended; Regulations on the Board of Directors and Management Board
as amended; as well as Regulations on Remunerations & Compensations Payable to Members
of the Board of Directors as amended. |
Informational materials
regarding the AGM agenda will be posted on the MTS website ahead of the event.
***
In April, MTS published
its annual report on Form 20-F for the fiscal year ended December 31, 2021 earlier filed with the United States Securities
and Exchange Commission. The document is available at:
https://static.ssl.mts.ru/mts_rf/images/mts-2021-20-f.pdf
Hard copies of
the document with the Company’s complete audited financial statements will be available to shareholders upon request.
Debt
In April, MTS issued
two series of exchange-traded bonds on MOEX totaling RUB 20 bn: (1) series 001P-20 bonds in the amount of RUB 10 bn with a maturity
of 4 years and a coupon rate of 11.75%; and (2) series 001P-19 bonds in the amount of RUB 10 bn with a maturity of 3 years and a
coupon rate of 11.69%. MTS intends to use the funds for general corporate purposes and optimization of its debt portfolio.
M&A
In February, MTS
invested RUB 740 m in the equity share capital of UrentBike.ru, LLC (“Urent”), a leader on the Russian micro-mobility short-term
rental market. The deal, which is aimed at expanding the range of services offered within the MTS ecosystem, was carried out as part
of a recent funding round, which saw MTS as lead investor and also attracted other investments. Urent is Russia’s largest electric
scooter rental operator with a fleet of over 60,000 e-scooters in more than 60 cities, representing more than 50% of the national market
in terms of fleet size.
***
In April, MTS announced
a RUB 72 m investment of the MTS Venture Fund in Bartello, an online food and beverage ordering service. Bartello, which allows restaurant
customers to order and pay for refreshments without calling a waiter, will be integrated into the MTS Live app to allow attendees to
place online orders during concerts, music festivals, and other events.
***
In April, MTS announced
the acquisition of a stake in Gulfstream Security Systems JSC (operates under the Gulfstream brand), one of Russia’s leading providers
of digital safeguard systems for residential households, automobiles, and commercial real estate, in a move aimed at expanding MTS’s
Smart Home business vertical. Under the terms of the deal, MTS has acquired 58.38% of the shares in the company for approximately RUB
2.0 bn. Gulfstream provides comprehensive solutions to safeguard against burglary, theft, fire, and water damage, as well as an IT platform
for digital smart home services. The company’s advanced solutions cover a full range of customer needs, from private homes and
apartments to retail stores and corporate offices.
Ratings
In January, Russia’s
National Credit Ratings Agency has reaffirmed MTS’s credit rating of AAA.ru, the agency’s highest, with a stable outlook.
In its report, National Credit Ratings noted several key factors that influenced their decision, including: (1) the low systematic
risk to MTS’s operations; (2) the Company’s moderate leverage, high margin of safety for debt servicing, significant
operating margin, as well as healthy liquidity levels; and (3) quality of the Company’s management and strategic planning.
***
In February, the
MTS Board of Directors established a Special Committee of the Board for Cloud & Infrastructure Development to be chaired by
Independent Director Nadia Shouraboura. In addition, the Board amended the composition of the ESG Committee.
Cloud & IoT
In March, MTS deployed
an NB-IoT network at the Novolazarevskaya Antarctic station with an NB-IoT network. The service enables B2B customers to monitor the
performance of sensors and meters in hard-to-reach areas, avoiding the need for regular on-site trips for equipment inspection. The network
is aimed at helping to carry out environmental research, including remote monitoring of sea ice as well as the dynamics of glaciers and
icebergs.
***
In April, MTS launched
the MONTE (Monitoring Events) service on the company's NB-IoT network, the first offering of its kind in Russia for enabling remote monitoring
of subscriber devices over narrow-band Internet of Things connectivity.
***
In April, Neurosoft,
one of Russia's largest medical equipment manufacturers, announced the company is launching remote ECG diagnostics across clinics in
Russia via the #CloudMTS platform. The system will allow medical professionals to remotely diagnose dangerous conditions in real time
with the aim to provide timely, high-quality patient care.
***
In April, MTS announced
that its #CloudMTS platform has been certified for compliance with the international PCI DSS security standard. The certification allows
companies from the Internet commerce and financial sector to use cloud infrastructure to store, process and transfer data of bank cards
of payment systems, including MIR and UnionPay.
Innovation
In April, MTS announced
14 projects had passed review and would advance to the development stage under the MTS Startup Hub program. The startups are focused
on new innovative commercial solutions based on cutting-edge technologies, including in AR/VR, autonomous vehicles, machine vision, 5G
connectivity, and edge computing. More than 90 startups from different regions of Russia applied to the latest MTS Startup Hub intake
round.
Cautionary note on
forward-looking statements
Some of the information in this press release
may contain projections or other forward-looking statements regarding future events or the future financial performance of MTS, as defined
in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify forward looking statements
by terms such as “expect,” “believe,” “anticipate,” “estimate,” “intend,”
“will,” “could,” “may” or “might,” and the negative of such terms or other similar expressions.
We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not undertake
or intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence
of unanticipated events. We refer you to the documents MTS files from time to time with the U.S. Securities and Exchange Commission, specifically
the Company’s most recent Form 20-F. These documents contain and identify important factors, including those contained in the
section captioned “Risk Factors” that could cause the actual results to differ materially from those contained in our projections
or forward-looking statements, including, among others, the severity and duration of current economic and financial conditions, including
the ongoing geopolitical situation relating to the situation in Ukraine, the expansion of sanctions and restrictive measures imposed on
the Russian Federation and a number of Russian legal and natural person by the United States, European Union, United Kingdom and certain
other states, responsive measures of regulatory, legislative and other nature made by Russian authorities as a reaction to foreign sanctions
and restrictive measures, volatility in interest and exchange rates (including the decline in the value of the Russian ruble against the
U.S. dollar and the euro), commodity and equity prices and the value of financial assets; impact of decisions by a number of foreign suppliers
of goods, works, services and software to suspend or stop providing the supply of goods, works, services and software to Russian legal
and natural persons the impact of Russian, U.S. and other foreign government programs to restore liquidity and stimulate national and
global economies, our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we
do not do so, strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses, potential
fluctuations in quarterly results, our competitive environment, dependence on new service development and tariff structures, rapid technological
and market change, acquisition strategy, risks associated with telecommunications infrastructure, governmental regulation of the telecommunications
industries and other risks associated with operating in Russia and the CIS, volatility of stock price, financial risk management and future
growth subject to risks, as well as potential aggravation of existing risk factors or appearance of new.
Note on financial measures &
definitions
This press release
includes financial information prepared in accordance with International Financial Reporting Standards, or IFRS, as well as other financial
measures referred to as non-IFRS. The non-IFRS financial measures should be considered in addition to, but not as a substitute for, the
information prepared in accordance with IFRS. Due to the rounding and translation practices, Russian ruble and functional currency margins,
as well as other non-IFRS financial measures, may differ.
Operating Income
Before Depreciation and Amortization (OIBDA) and OIBDA margin. OIBDA represents operating income before depreciation and amortization.
OIBDA margin is defined as OIBDA as a percentage of our net revenues. OIBDA may not be similar to OIBDA measures of other companies,
is not a measurement under IFRS and should be considered in addition to, but not as a substitute for, the information contained in our
consolidated statement of profit or loss. We believe that OIBDA provides useful information to investors because it is an indicator of
the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital
expenditures, acquisitions of mobile operators and other investments and our ability to incur and service debt. While depreciation and
amortization are considered operating costs under IFRS, these expenses primarily represent the non-cash current period allocation of
costs associated with long-lived assets acquired or constructed in prior periods. Our OIBDA calculation is commonly used as one of the
bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value
of companies within the wireless telecommunications industry. We use the term Adjusted for OIBDA and operating profit where there were
items that do not reflect underlying operations that were excluded.
OIBDA and Adjusted OIBDA can be reconciled to our consolidated statements
of profit or loss as follows11:
Group (RUB bn) | |
Q1’21 | | |
Q2’21 | | |
Q3’21 | | |
Q4’21 | | |
Q1’22 | |
Operating profit | |
| 28.6 | | |
| 30.4 | | |
| 33.5 | | |
| 25.8 | | |
| 26.7 | |
Add: D&A | |
| 26.8 | | |
| 26.8 | | |
| 27.9 | | |
| 29.7 | | |
| 29.6 | |
Loss from impairment of non-current assets | |
| - | | |
| - | | |
| - | | |
| - | | |
| 0.2 | |
Adjusted OIBDA | |
| 55.4 | | |
| 57.2 | | |
| 61.3 | | |
| 55.5 | | |
| 56.5 | |
Russia (RUB bn) | |
Q1’21 | | |
Q2’21 | | |
Q3’21 | | |
Q4’21 | | |
Q1’22 | |
Operating profit | |
| 27.9 | | |
| 29.8 | | |
| 32.8 | | |
| 25.3 | | |
| 25.7 | |
Add: D&A | |
| 26.2 | | |
| 26.2 | | |
| 27.2 | | |
| 29.0 | | |
| 28.9 | |
Loss from impairment of non-current assets | |
| - | | |
| - | | |
| - | | |
| - | | |
| 0.2 | |
Adjusted OIBDA | |
| 54.1 | | |
| 56.0 | | |
| 60.0 | | |
| 54.4 | | |
| 54.9 | |
Armenia (RUB m) | |
Q1’21 | | |
Q2’21 | | |
Q3’21 | | |
Q4’21 | | |
Q1’22 | |
Operating profit | |
| 271 | | |
| 463 | | |
| 390 | | |
| 346 | | |
| 528 | |
Add: D&A | |
| 568 | | |
| 517 | | |
| 632 | | |
| 594 | | |
| 595 | |
OIBDA | |
| 839 | | |
| 980 | | |
| 1022 | | |
| 940 | | |
| 1123 | |
Czech (RUB m) | |
Q1’21 | | |
Q2’21 | | |
Q3’21 | | |
Q4’21 | | |
Q1’22 | |
Operating profit | |
| 66 | | |
| 269 | | |
| 23 | | |
| 80 | | |
| -43 | |
Add: D&A | |
| 39 | | |
| 37 | | |
| 37 | | |
| 45 | | |
| 48 | |
OIBDA | |
| 105 | | |
| 306 | | |
| 60 | | |
| 124 | | |
| 4 | |
11 Totals may add up differently due to rounding
OIBDA and OIBDA margin can be reconciled to our operating margin
as follows11:
Group | |
Q1’21 | | |
Q2’21 | | |
Q3’21 | | |
Q4’21 | | |
Q1’22 | |
Operating margin | |
| 23.1 | % | |
| 23.7 | % | |
| 24.2 | % | |
| 18.0 | % | |
| 19.8 | % |
Add: D&A | |
| 21.6 | % | |
| 20.8 | % | |
| 20.2 | % | |
| 20.7 | % | |
| 22.0 | % |
Loss from impairment of non-current assets | |
| - | | |
| - | | |
| - | | |
| - | | |
| 0.2 | % |
Adjusted OIBDA margin | |
| 44.7 | % | |
| 44.5 | % | |
| 44.4 | % | |
| 38.6 | % | |
| 42.0 | % |
Russia | |
Q1’21 | | |
Q2’21 | | |
Q3’21 | | |
Q4’21 | | |
Q1’22 | |
Operating margin | |
| 23.1 | % | |
| 23.8 | % | |
| 24.3 | % | |
| 18.1 | % | |
| 19.8 | % |
Add: D&A | |
| 21.7 | % | |
| 20.9 | % | |
| 20.2 | % | |
| 20.7 | % | |
| 22.3 | % |
Loss from impairment of non-current assets | |
| - | | |
| - | | |
| - | | |
| - | | |
| 0.2 | % |
Adjusted OIBDA margin | |
| 44.8 | % | |
| 44.7 | % | |
| 44.5 | % | |
| 38.8 | % | |
| 42.2 | % |
Armenia | |
Q1’21 | | |
Q2’21 | | |
Q3’21 | | |
Q4’21 | | |
Q1’22 | |
Operating margin | |
| 16.7 | % | |
| 26.7 | % | |
| 20.2 | % | |
| 18.4 | % | |
| 25.4 | % |
Add: D&A | |
| 35.0 | % | |
| 29.8 | % | |
| 32.8 | % | |
| 31.6 | % | |
| 28.6 | % |
OIBDA margin | |
| 51.7 | % | |
| 56.6 | % | |
| 53.0 | % | |
| 49.9 | % | |
| 54.0 | % |
Czech | |
Q1’21 | | |
Q2’21 | | |
Q3’21 | | |
Q4’21 | | |
Q1’22 | |
Operating margin | |
| 3.6 | % | |
| 14.6 | % | |
| 1.3 | % | |
| 4.0 | % | |
| n/a | |
Add: D&A | |
| 2.1 | % | |
| 2.0 | % | |
| 2.1 | % | |
| 2.3 | % | |
| 1.8 | % |
OIBDA margin | |
| 5.8 | % | |
| 16.6 | % | |
| 3.4 | % | |
| 6.2 | % | |
| 0.2 | % |
Free cash flow ex-Bank can be reconciled to our free cash flow as
follows:
Group (RUB bn) | |
Q1’21 | | |
Q2’21 | | |
Q3’21 | | |
Q4’21 | | |
Q1’22 | |
Group free cash flow | |
| -13.7 | | |
| 3.7 | | |
| 4.1 | | |
| 33.5 | | |
| -33.6 | |
Less: Bank free cash flow | |
| -26.3 | | |
| -1.8 | | |
| -2 | | |
| 2.6 | | |
| -13.6 | |
Free cash flow ex-Bank | |
| 12.6 | | |
| 5.5 | | |
| 6.1 | | |
| 31.0 | | |
| -20.0 | |
Definitions
Total debt. Total debt represents short-term
and long-term debt excluding lease obligations and debt issuance costs.
Net debt. Net debt represents total debt
less cash and cash equivalents, short-term investments, long-term deposits, swap and currency hedging. Our net debt calculation is commonly
used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare our periodic and future liquidity
within the wireless telecommunications industry. Our net debt calculation may not be similar to the net debt calculation of other companies.
The non-IFRS financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance
with IFRS.
Free Cash Flow. Free cash flow is represented
by net cash from operating activities less cash used for certain investing activities. Free cash flow is commonly used by investors, analysts
and credit rating agencies to assess and evaluate our performance over time and within the wireless telecommunications industry. Our free
cash flow calculation may not be similar to the free cash flow calculation of other companies. Because free cash flow is not based in
IFRS and excludes certain sources and uses of cash, the calculation should not be looked upon as an alternative to our consolidated statement
of cash flows or other information prepared in accordance with IFRS.
Subscriber. We define a “subscriber”
as an organization or individual, whose SIM-card:
| • | shows traffic-generating activity or |
| • | accrues a balance for services rendered or |
| • | is replenished or topped off |
over the course of any three-month period, inclusive
within the reporting period, and was not blocked at the end of the period.
Consolidated financial statements
MOBILE TELESYSTEMS
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021
(Amounts in millions of RUB except per share amount)
| |
Three months ended | | |
Three months ended | |
| |
| March 31, 2022 | | |
| March 31, 2021 | |
Service revenue | |
| 117,684 | | |
| 106,562 | |
Sales of goods | |
| 16,763 | | |
| 17,378 | |
Revenue | |
| 134,447 | | |
| 123,940 | |
| |
| | | |
| | |
Cost of services | |
| (36,639 | ) | |
| (30,430 | ) |
Cost of goods | |
| (15,147 | ) | |
| (16,594 | ) |
| |
| | | |
| | |
Selling, general and administrative expenses | |
| (24,313 | ) | |
| (21,498 | ) |
Depreciation and amortization | |
| (29,585 | ) | |
| (26,784 | ) |
Operating share of the profit of associates and joint ventures | |
| 1,340 | | |
| 1,293 | |
Impairment of non-current assets | |
| (207 | ) | |
| 5 | |
Other operating expenses | |
| (3,227 | ) | |
| (1,353 | ) |
Operating profit | |
| 26,669 | | |
| 28,579 | |
| |
| | | |
| | |
Other income / (expenses): | |
| | | |
| | |
Finance income | |
| 403 | | |
| 864 | |
Finance costs | |
| (14,358 | ) | |
| (9,467 | ) |
Other income | |
| (4,371 | ) | |
| 339 | |
Total other expenses, net | |
| (18,326 | ) | |
| (8,264 | ) |
| |
| | | |
| | |
Profit before tax from continuing operations | |
| 8,343 | | |
| 20,315 | |
| |
| | | |
| | |
Income tax expense | |
| (2,456 | ) | |
| (4,113 | ) |
| |
| | | |
| | |
Profit for the period from continuing operations | |
| 5,887 | | |
| 16,202 | |
| |
| | | |
| | |
Discontinued operation: | |
| | | |
| | |
| |
| | | |
| | |
Profit after tax for the period from discontinued operation | |
| (1,867 | ) | |
| 145 | |
| |
| | | |
| | |
Profit for the period | |
| 4,020 | | |
| 16,347 | |
| |
| | | |
| | |
Profit for the period attributable to non-controlling interests | |
| (164 | ) | |
| (176 | ) |
| |
| | | |
| | |
Profit for the period attributable to owners of the Company | |
| 3,856 | | |
| 16,171 | |
| |
| | | |
| | |
Other comprehensive income | |
| | | |
| | |
Items that may be reclassified subsequently to profit or loss | |
| | | |
| | |
Exchange differences on translating foreign operations | |
| 2,447 | | |
| 248 | |
Net fair value loss on financial instruments | |
| (1,485 | ) | |
| - | |
Other comprehensive income for the period | |
| 962 | | |
| 248 | |
| |
| | | |
| | |
Total comprehensive income for the period | |
| 4,982 | | |
| 16,595 | |
Less comprehensive income for the period attributable to the noncontrolling interests | |
| (164 | ) | |
| (176 | ) |
| |
| | | |
| | |
Comprehensive income for the period attributable to owners of the Company | |
| 4,818 | | |
| 16,419 | |
| |
| | | |
| | |
Weighted average number of common shares outstanding, in thousands - basic | |
| 1,664,718 | | |
| 1,726,941 | |
Earnings per share attributable to the Group - basic: | |
| | | |
| | |
EPS from continuing operations | |
| 3.44 | | |
| 9.28 | |
EPS from discontinued operation | |
| (1.12 | ) | |
| 0.08 | |
Total EPS - basic | |
| 2.32 | | |
| 9.36 | |
| |
| | | |
| | |
Weighted average number of common shares outstanding, in thousands - diluted | |
| 1,691,522 | | |
| 1,728,984 | |
Earnings per share attributable to the Group - diluted: | |
| | | |
| | |
EPS from continuing operations | |
| 3.38 | | |
| 9.27 | |
EPS from discontinued operation | |
| (1.10 | ) | |
| 0.08 | |
Total EPS - diluted | |
| 2.28 | | |
| 9.35 | |
MOBILE TELESYSTEMS
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF MARCH 31, 2022 AND AS OF December 31, 2021
(Amounts in millions of RUB)
| |
As of March 31, | | |
As of December 31, | |
| |
2022 | | |
2021 | |
NON-CURRENT ASSETS: | |
| | | |
| | |
Property, plant and equipment | |
| 320,296 | | |
| 311,250 | |
Investment property | |
| 1,990 | | |
| 2,498 | |
Right-of-use assets | |
| 129,557 | | |
| 132,343 | |
Intangible assets | |
| 152,172 | | |
| 142,951 | |
Investments in associates and joint ventures | |
| 7,809 | | |
| 8,735 | |
Other investments | |
| 5,081 | | |
| 4,591 | |
Deferred tax assets | |
| 12,063 | | |
| 11,683 | |
Accounts receivable, related parties | |
| 5,011 | | |
| 5,000 | |
Bank deposits and loans to customers | |
| 125,365 | | |
| 118,342 | |
Other financial assets | |
| 11,008 | | |
| 9,335 | |
Other assets | |
| 7,121 | | |
| 5,790 | |
Total non-current assets | |
| 777,473 | | |
| 752,518 | |
| |
| | | |
| | |
CURRENT ASSETS: | |
| | | |
| | |
Inventories | |
| 19,124 | | |
| 18,981 | |
Trade and other receivables | |
| 39,912 | | |
| 37,897 | |
Accounts receivable, related parties | |
| 4,001 | | |
| 2,287 | |
Bank deposits and loans to customers | |
| 89,893 | | |
| 87,594 | |
Short-term investments | |
| 27,251 | | |
| 28,972 | |
VAT receivable | |
| 11,293 | | |
| 11,746 | |
Income tax assets | |
| 3,295 | | |
| 2,021 | |
Assets held for sale | |
| 514 | | |
| 549 | |
Cash and cash equivalents | |
| 34,958 | | |
| 40,590 | |
Other financial assets | |
| 24,767 | | |
| 27,349 | |
Advances paid and prepaid expenses and other assets | |
| 6,945 | | |
| 5,314 | |
Total current assets | |
| 261,953 | | |
| 263,300 | |
Total assets | |
| 1,039,426 | | |
| 1,015,818 | |
| |
| | | |
| | |
EQUITY: | |
| | | |
| | |
Equity attributable to owners of the Company | |
| 16,852 | | |
| 9,766 | |
Non-controlling interests | |
| 5,001 | | |
| 4,838 | |
Total equity | |
| 21,853 | | |
| 14,604 | |
| |
| | | |
| | |
NON-CURRENT LIABILITIES: | |
| | | |
| | |
Borrowings | |
| 365,153 | | |
| 350,300 | |
Lease obligations | |
| 133,420 | | |
| 135,800 | |
Bank deposits and liabilities | |
| 7,625 | | |
| 14,313 | |
Deferred tax liabilities | |
| 18,621 | | |
| 17,901 | |
Provisions | |
| 10,342 | | |
| 7,288 | |
Other financial liabilities | |
| 812 | | |
| 180 | |
Other liabilities | |
| 1,983 | | |
| 2,012 | |
Total non-current liabilities | |
| 537,956 | | |
| 527,794 | |
| |
| | | |
| | |
CURRENT LIABILITIES: | |
| | | |
| | |
Trade and other payables | |
| 61,228 | | |
| 72,078 | |
Accounts payable, related parties | |
| 1,758 | | |
| 4,107 | |
Borrowings | |
| 132,459 | | |
| 111,839 | |
Lease obligations | |
| 19,675 | | |
| 18,709 | |
Bank deposits and liabilities | |
| 207,174 | | |
| 207,055 | |
Income tax liabilities | |
| 2,131 | | |
| 768 | |
Provisions | |
| 12,121 | | |
| 17,479 | |
Other financial liabilities | |
| 658 | | |
| 203 | |
Other liabilities | |
| 42,413 | | |
| 41,182 | |
Total current liabilities | |
| 479,617 | | |
| 473,420 | |
| |
| | | |
| | |
Total equity and liabilities | |
| 1,039,426 | | |
| 1,015,818 | |
MOBILE TELESYSTEMS
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021
(Amounts in millions of RUB)
| |
| Three months ended | | |
| Three months ended | |
| |
| March 31, 2022 | | |
| March 31, 2021 | |
Profit for the period | |
| 4,020 | | |
| 16,347 | |
| |
| | | |
| | |
Adjustments for: | |
| | | |
| | |
Depreciation and amortization | |
| 29,586 | | |
| 26,784 | |
Finance income | |
| (403 | ) | |
| (864 | ) |
Finance costs | |
| 14,358 | | |
| 9,467 | |
Income tax expense | |
| 2,456 | | |
| 4,113 | |
Net foreign exchange loss / (gain) and change in fair value of financial instruments | |
| 5,863 | | |
| (421 | ) |
Share of profit of associates and joint ventures | |
| (1,390 | ) | |
| (1,326 | ) |
Impairment of non-current assets | |
| 207 | | |
| (5 | ) |
Loss from sale of Ukraine operations | |
| - | | |
| 54 | |
Inventory obsolescence expense | |
| 420 | | |
| 152 | |
Allowance for doubtful accounts | |
| 721 | | |
| 132 | |
Bank reserves | |
| 4,520 | | |
| 2,017 | |
Change in provisions | |
| (5,851 | ) | |
| 1,669 | |
Other non-cash items | |
| (1,221 | ) | |
| (1,062 | ) |
| |
| | | |
| | |
Movements in operating assets and liabilities: | |
| | | |
| | |
Decrease/(increase) in trade and other receivables and contract assets | |
| 963 | | |
| (647 | ) |
Increase in bank deposits and loans to customers | |
| (13,469 | ) | |
| (15,312 | ) |
Increase in inventory | |
| (295 | ) | |
| (2,111 | ) |
Decrease/(increase) in VAT receivable | |
| 461 | | |
| (216 | ) |
Decrease in advances paid and prepaid expenses | |
| 1,184 | | |
| 590 | |
| |
| | | |
| | |
Increase/(Decrease) in trade and other payables, contract liabilities and other current liabilities | |
| (9,288 | ) | |
| 2,860 | |
Increase in bank deposits and liabilities | |
| (8,481 | ) | |
| (15,547 | ) |
Dividends received | |
| 838 | | |
| 706 | |
Income taxes paid | |
| (2,601 | ) | |
| (3,608 | ) |
Interest received | |
| 237 | | |
| 548 | |
Interest paid, net of interest capitalized | |
| (13,820 | ) | |
| (10,002 | ) |
Net cash provided by operating activities | |
| 9,015 | | |
| 14,318 | |
| |
| | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | |
Acquisition of subsidiary, net of cash acquired | |
| (5,158 | ) | |
| - | |
Purchases of property, plant and equipment | |
| (25,997 | ) | |
| (18,240 | ) |
Purchases of other intangible assets | |
| (11,338 | ) | |
| (11,109 | ) |
Cost to obtain and fulfill contracts, paid | |
| (1,126 | ) | |
| (1,349 | ) |
Proceeds from sale of property, plant and equipment and assets held for sale | |
| 1,100 | | |
| 1,464 | |
Purchases of short-term and other investments | |
| (1,238 | ) | |
| (4,124 | ) |
Proceeds from sale of short-term and other investments | |
| 1,974 | | |
| 2,154 | |
Investments in associates and joint ventures | |
| - | | |
| (60 | ) |
Cash proceeds/(payments) related to swap contracts | |
| 146 | | |
| (35 | ) |
Proceeds from sale of subsidiaries, net of cash disposed | |
| (86 | ) | |
| 1,272 | |
Other investing activities | |
| 250 | | |
| 77 | |
Net cash used in investing activities | |
| (41,473 | ) | |
| (29,950 | ) |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
Repayment of loans | |
| (5,432 | ) | |
| (2,348 | ) |
Proceeds from loans | |
| 46,076 | | |
| 828 | |
Repayment of notes | |
| (10,000 | ) | |
| (10,813 | ) |
Proceeds from issuance of notes | |
| - | | |
| 4,350 | |
Notes and debt issuance cost paid | |
| - | | |
| (55 | ) |
Lease obligation principal paid | |
| (3,453 | ) | |
| (4,474 | ) |
Dividends paid | |
| (8 | ) | |
| - | |
Repurchase of common stock | |
| - | | |
| (200 | ) |
Other financing activities | |
| (1,999 | ) | |
| - | |
Net cash provided by / (used in) financing activities | |
| 25,184 | | |
| (12,712 | ) |
| |
| | | |
| | |
Effect of exchange rate changes on cash and cash equivalents | |
| 1,642 | | |
| 142 | |
| |
| | | |
| | |
NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS: | |
| (5,632 | ) | |
| (28,202 | ) |
| |
| | | |
| | |
CASH AND CASH EQUIVALENTS, at beginning of the period | |
| 40,590 | | |
| 85,469 | |
| |
| | | |
| | |
CASH AND CASH EQUIVALENTS, at end of the period | |
| 34,958 | | |
| 57,267 | |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
MOBILE TELESYSTEMS PUBLIC JOINT STOCK COMPANY |
|
|
|
|
By: |
/s/ Vyacheslav Nikolaev |
|
|
Name: |
Vyacheslav Nikolaev |
|
|
Title: |
CEO |
|
|
|
|
Date: May 18, 2022 |
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