Mobile TeleSystems PJSC (NYSE:MBT) Q3 2018 Earnings Conference Call Transcript

Nov 20, 2018 • 10:00 am ET


Mobile TeleSystems PJSC (NYSE:MBT) Q3 2018 Earnings Conference Call Transcript


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Ladies and gentlemen, welcome to Mobile TeleSystems Third Quarter 2018 Financial and Operating Results Announcement and Conference Call.

I will now hand you over to Polina Ugryumova, Head of IR. Madam, you may begin.

Polina Ugryumova

Welcome everybody to today's event to discuss the Group's third quarter 2018 financial and operating results.

(Forward-Looking Cautionary Statements)

Copies of the presentation and materials used and referenced in this conference call are available on our Company's website.

Now I have the pleasure of presenting MTS' President and CEO, Mr. Alexey Kornya.

Alexey Kornya

Ladies and gentlemen, thank you for joining us on today's conference call to discuss the Group's financial and operating results for the third quarter 2018.

Joining me to comment on our results are Vyacheslav Nikolaev, VP, Marketing; Kirill Dmitriev, VP, Sales and Customer Services and Andrey Kamensky, VP, Finance, Investments and M&A.

Let me begin with the key highlights to the quarter. In third quarter, we delivered another strong set of results. In Russia, the market continued to grow despite the recent regulatory changes in the environment of a relatively stable and healthy competitive dynamics with continuing increase in data consumption and ARPU. MTS has maintained robust growth momentum.

During the third quarter, Group revenues increased by 11.7% to RUB128 billion. Excluding the impact of the new IFRS standard, Group revenues increased by 12.1%. This growth was primarily driven by strong underlying performance in Russia and accelerated growth in Ukraine.

In third quarter, we began consolidating the results of MTS Bank, which also contributed to reported growth. Excluding the impact of bank consolidation on like-for-like basis, our Group revenue increased by meaningful 8.7%. Third quarter Group adjusted to EBITDA was RUB59.3 billion, up 21.6% compared to the previous year. Obviously, this substantial increase was aided by new IFRS standard. On a like-for-like basis, we also see 7.3% (ph) increase driven by revenue performance. Excluding the impact of consolidation of MTS Bank and the new IFRS standards, adjusted to EBITDA grew 4.9% on a comparable basis. Our adjusted to EBITDA margin has now reached 46.3% under the new IFRS standards.

Now, I turn the call over to Vyacheslav and Kirill, who will give more color on our key market performance.

Vyacheslav Nikolaev

Thank you, Alexey.

For the period, we saw strong topline performance in Russia, as revenue increased 12% to RUB119.1 billion, driven by an impressive dynamics in handset sales as well as continued growth in core mobile segments.

The consolidation of MTS Bank also contributed to increase in the topline. Our mobile business continued to grow despite the cancellation of internal roaming from September. We continued to see sustained growth in data usage and ARPU in a relatively healthy pricing environment. In August, MTS launched the new tariff plan called Terifisher (ph) with unlimited internet. We already see the first positive results. The tariff was very well received by the market. Those MTS clients who opt to switch to Terifisher tend to grow their ARPU where their average data consumption is not increasing materially.

Our fixed line