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ROSTELECOM PJSC (RKMD)
ROSTELECOM PJSC: ROSTELECOM ANNOUNCES ITS IFRS FINANCIAL AND OPERATING
RESULTS FOR THE FOURTH QUARTER AND FULL YEAR OF 2018
12-March-2019 / 10:02 MSK
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
rostelecom announces its ifrs financial and operating results
for the FOURTH quarter AND FULL YEAR of 2018
DIGITAL SEGMENT CONTRIBUTION UP TO 57% OF TOTAL REVENUE IN 4Q 2018
Moscow, Russia - March 12, 2018 - Rostelecom PJSC (MOEX: RTKM, RTKMP; OTCQX:
ROSYY), the largest digital service provider in Russia, today announces its
consolidated financial results for the fourth quarter and the full year of
2018 prepared in accordance with IFRS[1],[2].
KEY ACHIEVEMENTS
- Meeting guidance on key financial indicators for 2018;
- 2018 revenue growth of 5% year-on-year;
- The digital segment's[3] contribution to total revenue reached 57% in 4Q
2018;
- Consistently high growth rates in FTTx Broadband clients (+6%) and in
IPTV subscribers (+9%), while ARPU continues to grow in our core broadband
and IPTV segments;
- Increase in revenues from VAS and cloud services of 42% in 2018, as a
result of "Smart City" projects, Internet video broadcasting, the
development of data centre services and the promotion of cloud services;
- OIBDA[4] grew by 4% to RUB 100.9 billion in 2018;
- Net profit increased by 7% to RUB 15.0 billion in 2018.
FOURTH QUARTER 2018 KEY FINANCIAL HIGHLIGHTS
- Revenue grew by 4% to RUB 87.3 billion compared to the fourth quarter of
2017;
- OIBDA grew by 2% to RUB 26.0 billion;
- OIBDA margin of 29.8% compared to 30.5% in the fourth quarter of 2017;
- Net profit of RUB 2.4 billion compared to RUB 4.2 billion in the fourth
quarter of 2017;
- CAPEX[5] increased by 48% to RUB 27.3 billion (31.3% of revenue) from
RUB 18.5 billion (21.9% of revenue) in the fourth quarter of 2017;
- Free Cash Flow (FCF) of RUB 18.1 [6] billion compared to RUB 17.3
billion in the fourth quarter of 2017;
- Net debt[7] increased by 3% since the beginning of the year to RUB 186.7
billion, resulting in a Net Debt/OIBDA ratio of 1.9x.
Key figures for 4Q 2018, RUB mln
RUB million 4Q 2018 4Q 2017 change, y-o-y
Revenue 87,257 84,113 4%
OIBDA 26,038 25,628 2%
OIBDA margin % 29.8% 30.5% -
Operating Income 8,167 9,312 (12%)
Operating margin % 9.4% 11.1% -
Net Income 2,351 4,169 (44%)
% of revenue 2.7% 5.0% -
Capital Expenditure 27,287 18,462 48%
% of revenue 31.3% 21.9% -
Net debt 186,712 181,594 3%
Net debt/ annualised OIBDA 1.9 1.9 -
FCF 18,063 17,283 780
FULL YEAR 2018 FINANCIAL HIGHLIGHTS
? Revenue increased by 5% to RUB 320.2 billion compared to the full year
of 2017;
? OIBDA increased by 4% to RUB 100.9 billion compared to the full year of
2017;
? OIBDA margin of 31.5% and at a comparable level to the full year of
2017;
? Net profit increased by 7% to RUB 15.0 billion compared to the full year
of 2017;
? CAPEX increased by 20% year-on-year to RUB 73.2 billion (22.9% of
revenue) from RUB 60.8 billion (19.9% of revenue) in 2017;
? Free Cash Flow (FCF) of RUB 14.8 billion compared to RUB 20.4 billion
for the full year 2017.
Key figures for the full year of 2018, RUB mln
RUB million 12M 2018 12M 2017 change, y-o-y
Revenue 320,239 305,329 5%
OIBDA 100,900 96,688 4%
OIBDA margin % 31.5% 31.7% -
Operating Income 35,800 37,885 (6%)
Operating margin % 11.2% 12.4% -
Net Income 15,012 14,050 7%
% of revenue 4.7% 4.6% -
Capital Expenditure 73,179 60,752 20%
% of revenue 22.9% 19.9% -
Net debt 186,712 181,594 3%
Net debt/ annualised OIBDA 1.9 1.9 -
FCF 14,751 20,385 (5,634)
Mikhail Oseevskiy, President of Rostelecom, commented:
"2018 was a milestone year for Rostelecom. We started to implement our 2022
strategy, with a strong focus on improving our products and services
ecosystem, enhancing efficiency, the further modernisation of our
technological platform, and of course, the development of our team.
Huge strides have been made in expanding and developing our digital
products, entering new markets, launching the biometric platform, improving
digital solutions for medicine and education sectors, and advancing our
cybersecurity capabilities. Today, we don't just develop products and
services, we stimulate emotions, create opportunities for education and
healthcare, we cultivate a sense of security and we free up our clients'
time by helping them streamline business processes. We help clients of any
scale to grow their business, and support the government in providing
improved services to its citizens.
Together with our brand refresh, which was a milestone event for us last
year, we introduced a range of new digital products and tariff lines, in
response to market changes and Rostelecom's priorities.
Our brand-new service and multimedia platform Wink was recently added to our
private client ecosystem, marking an evolutionary stage in the development
of IPTV, which is today popular among millions of families across the entire
country. Wink is a truly comprehensive platform, comprising of a mobile app,
a website and a Smart TV app, more than 200 TV channels and more than 12
thousand films and episodes already available to Rostelecom's clients, as
well as a set of value added services including NPVR and Parental control
options.
Products in our new tariff line were developed and named around the need of
the typical family: "For Internet", "For Safety", "For Fun", "All together"
and "Gaming". We have also improved our product offering with exclusive
tariff plans. One of the latest developments is the launch of the "Cloud"
tariff, together with Yandex, which offers high speed internet access and
massive cloud storage capacity on Yandex.Disk, that is growing monthly by
1tb.
For entrepreneurs, we launched an updated platform "Plus Account" that
ensures high speed Internet connectivity and mobile communication, with
extra services also available, including a Hosted PBX, SMS advertising,
Wi-Fi, video surveillance and TV for business.
Last year, we carried out many successful projects. One of them was video
surveillance at the presidential election in Russia, where thousands of
Rostelecom engineers in mobile teams oversaw the seamless functioning of our
systems, once again reinforcing our competence, excellence and
professionalism, as well as Rostelecom's status as a credible partner. In
2018, we completed another large-scale project to connect healthcare centres
to the Internet, demonstrating our capability to run complex infrastructure
programmes across the entire country. Public funding enabled us to further
expand the number of high-speed connections in remote areas, and we also
completed construction of an underwater sector of the fibre-optic
communication line in Kuril Islands. The JV with Nokia marks another
significant event last year and represents an important milestone when it
comes to setting the backdrop for developing innovative technologies, as
does the launch of the 5G pilot sites for a new generation 5G network
located in Skolkovo, the State Hermitage museum and Innopolis.
Our growing digital segment gained further momentum, which now contributes
more than 55% to our total revenue. Growth in our subscriber base coupled
with higher ARPU, led to a significant increase in revenues from our core
pay-TV and broadband segments, where we are leaders in the market.
Additional products and services that we actively promote are in growing
demand, and we also registered a twofold growth in revenues from Corporate
TV and national Wi-Fi services. The Information security segment grew
fourfold, and the number of "Smart Home" ecosystem subscriber base grew by
sixteen times, resulting in a 24-fold growth in revenues.
The achievements listed above represent only some of our recent
achievements. Our digital transformation has transformed the business and
contributed to a very solid financial performance in 2018. Our revenue grew
by 5%, while OIBDA increased by 4%, and net income - by 7%. Overall, we
delivered a strong performance, and will continue to expand our digital
business segments and improve efficiency.
I am delighted to reflect on a year that confirms Rostelecom's
transformation into a dynamic and courageous digital player. We are
maintaining our strong leadership in the market, our core objective of
pursuing sustainable and accretive growth is enhancing shareholder value,
which is reinforced by attractive dividend returns."
Sergey Anokhin, Senior Vice-President of Rostelecom and CFO of Rostelecom,
added:
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