QIWI Plc (NASDAQ:QIWI) Q2 2020 Earnings Conference Call - Final Transcript

Aug 19, 2020 • 08:30 am ET

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QIWI Plc (NASDAQ:QIWI) Q2 2020 Earnings Conference Call - Final Transcript

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Executive
Varvara Kiseleva

RUB3.3 billion, driven primarily by Payment Services segment net revenue growth, offset by increase in payroll and related taxes, excluding effect of share-based payments and foreign exchange loss.

Consumer Financial Services segment net loss was RUB134 million in the second quarter of 2020 as compared to a net loss of RUB435 million in the same period of the prior year, resulting primarily from segment net revenue growth as Boris discussed earlier, as well as a decrease in selling, general and administrative expenses, primarily related to the lower marketing and consumer acquisition costs, offset by an increase in credit loss expenses predominantly resulted from the portfolio growth as compared to prior year.

The loss of approximately RUB700 million that we have incurred in the disposal of SOVEST project, did not affect our adjusted EBITDA or adjusted net profit numbers, as it was treated as a nonrecurring item in our segment reports.

Rocketbank segment net profit was RUB44 million compared to a net loss of RUB511 million in the prior year, resulting primarily from net revenue growth, driven mostly by revenue generated from the loyalty program termination, as well as decrease in selling, general and administrative expenses primarily related to lower marketing and consumer acquisition costs.

Now, onto our guidance. Firstly, I would like to remind everyone that at the moment we have limited visibility regarding the potential impact of the outbreak of the COVID-19 strain of coronavirus on our business and operations.

In addition, it is currently unclear how much consumer demand would be negatively affected by the outbreak of COVID and what effect that outbreak will have on the macroeconomic environment as a whole. The impact remains uncertain and will depend on the length and severity of the effect the coronavirus has on economic activity in our markets. The full scope of the negative impact with the abrupt decline oil price and resulting devaluation of the ruble may have on Russian economy also remains unclear but has the potential to be significant.

Our outlook reflects the current views and expectations only and is based on the trends we see as of the date of the earnings call. If such plans were to deteriorate further, the impact on our business and operations could be more severe than currently expected. We continue to monitor the situation closely.

Having said that, we upgrade our guidance in respect of the 2020 outlook. We expect Group total net Revenue to increase by 7% to 15% over 2019. Payment Services segment's net revenue to increase by 3% to 10% over 2019, while adjusted net profit is expected to increase by 35% to 50% over 2019.

Although we see our second quarter results as a solid foundation for this year, certain other factors remain beyond our control and we reserve the right to revise the guidance in the course of the year.

With that, operator, please open up the call for questions.