MegaFon's revenue down 0.2% in Q3 to 81.1 bln rubles, OIBDA down 10.7%
MOSCOW. Nov 9 (Interfax) - The consolidated revenue of MegaFon fell by 0.2% year-on-year in Q3 2016 to 81.1 billion rubles, the telco said in a statement.
For 9M 2016, revenue rose 1.5% to 235 billion rubles.
Operating income before depreciation and amortization (OIBDA) fell 10.7% in July-September to 32.3 billion rubles. The OIBDA margin fell to 39.8%, from 44.5% a year previously.
These results were in line with a consensus forecast of analysts. OIBDA was better than the consensus forecast, which envisaged a drop by 11.9% to 31.8 billion rubles with a 39.2% margin.
Net profit fell due mainly to a decrease in operating profit, the company's share of losses incurred by associates - referring to Euroset, where MegaFon owns a 50% stake and consolidates its results - and tax accruals related to tax claims in Tajikistan.
Wireless service revenue in Q3 2016 decreased by 3.9% y-o-y to 67.911 billion rubles due to decline in revenue from traditional voice services as a result of more subscribers opting for bundled tariffs, the increasing availability of free on-net calls, the introduction of free national roaming charges for bundled tariffs and a reduction in the number of subscribers travelling abroad due to sanctioned traditionally popular tourist destinations. "While mobile data revenue continued to contribute substantially to the wireless revenue, its growth rate slowed down noticeably due to the increased number of subscribers choosing cheaper bundled tariffs with higher data allowances, which the Company has been introducing in response to competitive pressure," MegaFon said.
Fixed line service revenue increased by 12.1% y-o-y to 6.357 billion rubles as a result of further successful expansion of our B2B and B2G client base, development of an attractive product portfolio for our corporate clients, and the acquisition of GARS Telecom.
Revenue from sales of equipment and accessories increased 38.1% y-o-y to 6.847 billion rubles. "We continue to experience the beneficial effect of our Q2 2016 initiative to address subscribers' greater appetite for more expensive high-end devices along with our attractive bundled offerings. While revenues from this segment increased, the overall growth rate of revenues from sales of equipment slowed as a result of reductions in the price of devices and other goods in our stores in connection with marketing initiatives to promote the purchase of data-enabled devices.
CAPEX decreased by 55.0% y-o-y to 11.671 billion rubles compared to 25.908 billion rubles in Q3 2015. "Prioritizing of CAPEX projects, optimization of technical solutions along with smoother allocation of expenditures throughout the year allowed us to reduce capital expenditures while fully implementing our network development plan," the company said. CAPEX in the comparable quarter in 2015 also reflected the one-off purchase of the SMARTS spectrum in August 2015.
Free cash flow increased by 61.0% y-o-y, from 8.87 billion rubles in Q3 2015 to 14.277 billion rubles for Q3 2016 due to reduced CAPEX spending.
