20 Nov 2018 13:23

Qiwi forecasts average annual revenue growth of around 25% up to 2021, profit around 37%

LONDON. Nov 20 (Interfax) - Qiwi Group is forecasting compound annual growth rate (CAGR) of adjusted net profit up to 2021 at around 25%, an adjusted net profit growth of around 37%, the group said in a presentation.

The group increased adjusted net profit 24% to 13.2 billion rubles in 2017 while net profit fell 14% to 4.05 billion rubles. Qiwi is planning to boost net revenues 40%-45% in 2018, up from a previous 26%-32%, and expects net profit to fall 10%-15% instead of a 15%-25% decline forecast earlier.

"We are forecasting that the volume of our businesses should double over the next four years. We are not expecting significant changes to profit-margins, which means that our net revenue will also double. We are confident that we will achieve these figures," Qiwi CFO Alexander Karavayev said during Investor Day in London.

He said that the group is forecasting significant revenues from the Sovest and Tochka projects; however, it is not currently possible to give an income forecast for Roketbank. It is expected that Qiwi and Otkritie Bank will receive 45% of Tochka's net profits each.

The group is forecasting a rise in revenue from payments from 12.6 billion rubles in 2017 to 22.6-25 billion rubles in 2021. Average annual revenue growth in this segment is expected to be around 17% in 2017-2021 and around 14% in 2019-2021. It is forecast that net profit from payments will rise from 7.5 billion rubles in 2017 to 13.3-14.7 billion rubles in 2021. Average annual profit growth of this segment in 2017-2021 is expected at around 17%.

Revenue from retail lending (Sovest project) is expected at 5.1-5.7 billion rubles in 2021. The group is planning to continue investing in this project: in 2019 expenditure on this project will be up to 2.5 billion rubles. It is expected that the project will be profitable in 2020 and profits are forecast at 0.2-0.4 billion rubles in 2021 compared to a 2.2 billion ruble loss in 2017.

Investment in the Tochka project (a joint project with Otkritie Bank) is forecast a 0.8 billion rubles. This project should enter profit in mid-2019. Revenue for the project is anticipated at 3.5 billion rubles in 2018 and 7.9-8.7 billion rubles in 2021. It is expected that net profit in 2021 will reach 2.1 -2.3 billion rubles compared to a 0.5 billion ruble loss in 2018.

Qiwi's principle shareholder is Sergei Solonin who owns 62.23% of voting shares (19.85%) of capital. Otkritie Bank owns 11.3% of the company's voting shares (45.9% of class B shares).

Qiwi operates one of the largest payment terminal networks in Russia. The group has over 20.8 million virtual wallets and over 149,000 terminals and payment points.