MTS net profit to fall 41% in Q2 on exchange rate loss - analysts
MOSCOW. Aug 25 (Interfax) - Mobile TeleSystems (MTS) will post a net profit of $341 million in the second quarter of 2010 under US GAAP, 40.9% less than in the same quarter last year, analysts at investment companies and banks told Interfax in a consensus forecast.
They forecast revenue to total $2.737 billion, OIBDA - $1.218 billion and the OIBDA margin - 44.5%.
The ruble's decline against the dollar compared with the first quarter will hurt profits, they said. Moreover, MTS posted an exchange rate gain of $200 million in the second quarter last year.
Revenue will increase thanks to higher sales in the retail segment and an increase in the subscriber base in the CIS countries.
Monthly minutes of use (MOU) in the second quarter will rise 5.5% compared with the first quarter to 233 minutes. However, the average price per minute (APPM) fell 0.5% to 1.11 rubles.
Analysts at Uralsib estimate MTS retail revenue at $170 million. "We do not believe that MTS' retail business will achieve profitability in the medium-term outlook and view it as an opportunity to attract new customers with an above average monthly average revenue per user (ARPU)," they said.
"In our view, the main factor in growth of MTS' business, as before, is the data transmission segment," Troika Dialog said in its survey. "We also anticipate the first signs of growth in the voice service segment, however weak," it said.
MTS will publish second quarter results on August 26.
Consensus forecast for MTS US GAAP results in Q2 2010 ($ mln):
| Revenue | OIBDA | OIBDA margin (%) | Net profit | |
| Uralsib | 2 730 | 1 212 | 44.4 | 356 |
| Troika Dialog | 2 762.3 | 1 237.2 | 44.8 | 320 |
| Deutsche UFG | 2 732 | 1 200 | 43.9 | 354 |
| VTB | 2 728 | 1 215 | 44.5 | 317 |
| Goldman Sachs | 2 758.8 | 1 224.2 | 44.4 | 322.4 |
| Citi | 2 734 | 1 209 | 44.2 | 367 |
| UniCredit Aton | 2 762 | 1 265 | 45.8 | 330 |
| ING | 2 724 | 1 207 | 44.3 | 357 |
| Renaissance Capital | 2 734 | 1 187 | 43.4 | 350 |
| UBS | 2 714 | 1 210 | 44.6 | 344 |
| Otkritie | 2 729 | 1 235 | 45.3 | 335.6 |
| Consensus | 2 737 | 1 218 | 44.5 | 341 |
| Q2 2009* | 2 363 | 1 107 | 46.8 | 577 |
| Change (%) | +15.8 | +10 | -2.3 p.p. | -40.9 |
* - adjusted for Comstar data
MTS is the biggest mobile operator in Russia and the CIS by subscriber base. It serves over 100 million subscribers in Russia, Ukraine, Uzbekistan, Turkmenistan, Armenia and Belarus.
In October 2009 MTS closed the deal to acquire 50.91% of shares in Comstar from the parent of both companies, AFK Sistema , for $1.272 billion. It acquired another 11.06% of shares in December, boosting its stake to 61.97%.
Comstar posted a net profit of $48.8 million in the second quarter under US GAAP, 63% more than in the same period last year. Revenue rose 13% to $411.1 million and OIBDA was up 10% to $164.5 million, although the margin edged down to 40% from 41%.
RTS$#&: AFKS, MTSS