MTS could see OIBDA margin decrease to 41% for Q4 2010 - analysts
MOSCOW. April 4 (Interfax) - Banking and investment analysts expect OJSC Mobile TeleSystems (MTS) to see its OIBDA margin go down for the fourth quarter of 2010.
This figure will likely decrease to 41%, down from 43.9% for the same period of 2009 and from 45% for the third quarter.
The main reason for the decrease was intensifying competition on Russia's cellular market. All Big-3 players (MTS, Megafon and Vimpelcom) increased their investments aimed at bringing in new subscribers at the end of 2010. As result, costs for dealer commissions and MTS' own retail chain increased. In addition, the share of sales of low-margin subscriber agreements increased.
Megafon's OIBDA margin for the fourth quarter dropped from 47.6% to 44.3% for the same period of the year and Vimpelcom Ltd. - from 47.1% to 44.5%.
The company's sales revenue for the fourth quarter will increase by 7.9% to $2.93 billion rubles, the analysis said. In addition, OIBDA will increase by 0.7% to $1.2 billion.
The company's net profit for the fourth quarter will hinge on the size of total write-offs following the forced stoppage in subsidiary operations in Turkmenistan owing to a government requirement. "Nonetheless, citing a similar situation in the year before this, we believe that MTS will announce dividends based on net profit with an adjustment on non-monetary losses. Therefore, even if the company writes off its losses, there should be no concern since this is non-monetary segment, which should not be reflected in the ratio for the dividend payment," said analysts at Troika Dialog .
MTS will publish its results for the fourth quarter on April 5, 2010.
Forecasts of 10 investment companies and banks for MTS' results for Q4 2010 (in mlns of dollars):
| Sales revenue | OIBDA | OIBDA Margin (%) | Net profit | |
| Unicredit Securities | 2 958 | 1 227 | 41.5 | 449 |
| Uralsib | 2 928 | 1 157 | 39.5 | 212 |
| UBS | 2 922 | 1 157 | 39.6 | 173 |
| Otkritie Financial Co | 2 919 | 1 221 | 42 | 264 |
| Troika Dialog | 2 972 | 1 180 | 39.7 | 366.8 |
| Renaissance Capital | 2 917 | 1 186 | 40.7 | 182 |
| Morgan Stanley | 2 881 | 1 227 | 42.6 | 421 |
| ING | 2 911 | 1 212 | 41.6 | 349 |
| Alfa-Bank | 3 020 | 1 323 | 43.8 | 332 |
| Deutsche Bank | 2 912 | 1 125 | 38.6 | 277 |
| Consensus for Q4 2010 | 2 934 | 1201.5 | 41 | - |
| Results for Q4 2009 | 2 719 | 1 193 | 43.9 | - 26 |
| Change, % | 7.9 | 0.7 | - 2.9 p.p. | - |
A consensus on the company's net profit for the period has not been formed since the analysts calculated the write-offs from the suspension of MTS operations in Turkmenistan differently.