Mobile TeleSystems Announces Financial Results for the First Quarter Ended March 31, 2014

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Mobile TeleSystems OJSC, the leading telecommunications provider in Russia and the CIS, today announces its unaudited US GAAP financial results for the three months ended March 31, 2014.

Key Financial Highlights of Q1 2014

 

  • Consolidated Group revenues increased 5% y-o-y to RUB 98 billion

  • Mobile service revenue in Russia rose 7% y-o-y to RUB 68 billion

  • Data traffic revenue in Russia grew 42% y-o-y to RUB 14 billion

  • Consolidated Group OIBDA[1] up 5% y-o-y to RUB 41 billion

  • Group OIBDA margin improved 0.1 pp to 42.5%

  • Consolidated net income[2] of RUB 13 billion

  • Free cash-flow from continuing operations[3] grew 40% to RUB 34 billion for the first three months of 2014

 

Key Corporate and Industry Highlights

 

  • Announced new 3D Strategy: Data, Differentiation, Dividends

  • Launched LTE network in Tatarstan, Primorsky Krai, Sverdlovsk Region, St. Petersburg , Leningrad Region, Adygeya, Komi, Tver region, Stavropol Krai, Novgorod Region

  • Concluded a credit facility with Citibank Europe PLC and Swedish Export Credit Corporation for up to $300 mln (RUB 10.9 bln at the date of conclusion) supported by Sweden’s Exportkreditnamnden (EKN)

  • Appointed Mr. Valery Shorzhin as Vice President for Procurement and Administration, Member of the Executive Board  

  • Annual dividend recommendation by the MTS Board of RUB 18.6 per ordinary MTS share (RUB 37.2 per ADR), or a total of RUB 38.435 bln based on the full-year 2013 financial results, upon acceptance by the AGM and completion of this payment, MTS will have paid out up to RUB 49.2 bln rubles based on fiscal year 2013 financial results

  • Acquired a 10.82% stake in OZON Holdings (“OZON”), the leading Russian e-commerce company, through an additional share issuance for $75 mln (RUB 2.7 billion at the date of transaction)

  • Sold the remaining 49% stake in Business-Nedvizhimost CJSC to Sistema JSFC  for a price of RUB 3.1 bln

  • Redeemed the remaining amount of RUB 15 bln series 04 bond

  • Appointed Mr. Andrei Ushatskiy as Vice President, Chief Technology and Information Officer, Member of the Executive Board

 

Additional Information

MTS continues to see sustained macroeconomic volatility in its markets of operations that may impact the financial and operational performance throughout the Group. This press release provides a summary of some of the key financial and operating indicators for the period ended March 31, 2014.

Mobile TeleSystems OJSC (“MTS”) is the leading telecommunications group in Russia and the CIS, offering mobile and fixed voice, broadband, pay TV as well as content and entertainment services in one of the world’s fastest growing regions. Including its subsidiaries, the Group services over 100 million mobile subscribers. The Group has been awarded GSM licenses in Russia, Ukraine, Turkmenistan, Armenia and Belarus, a region that boasts a total population of more than 200 million. Since June 2000, MTS’ Level 3 ADRs have been listed on the New York Stock Exchange (ticker symbol MBT).

Non-GAAP financial measures. This press release includes financial information prepared in accordance with accounting principles generally accepted in the United States of America, or US GAAP, as well as other financial measures referred to as non-GAAP. The non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with US GAAP. Due to the rounding and translation practices, Russian ruble and functional currency margins, as well as other non-GAAP 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 accounting principles generally accepted in the United States and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of operations and comprehensive income. 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 generally accepted accounting principles, 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.

SOURCE Mobile TeleSystems (MTS)