DJ SISTEMA ANNOUNCES FINANCIAL RESULTS FOR THE FIRST QUARTER 2019
Sistema PJSFC (SSA)
SISTEMA ANNOUNCES FINANCIAL RESULTS FOR THE FIRST QUARTER 2019
04-Jun-2019 / 10:00 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
SISTEMA ANNOUNCES FINANCIAL RESULTS FOR THE FIRST QUARTER 2019
Moscow, Russia - 4 June 2019 - Sistema PJSFC ("Sistema" or the "Company",
together with its subsidiaries, "the Group") (LSE: SSA, MOEX: AFKS), a
publicly-traded diversified Russian holding company, today announces its
unaudited consolidated financial results in accordance with International
Financial Reporting Standards (IFRS) for the first quarter ended 31 March
2019.
SUCCESSFUL DELIVERY AGAINST STRATEGIC AND OPERATIONAL GOALS
· Sustained revenue growth1 due to strong results from the majority of
portfolio companies.
· At least double-digit OIBDA growth at MTS, Detsky Mir, Segezha Group,
Agroholding Steppe, and Medsi driven by excellent operating results and
financial discipline.
· Increased operational scale in real estate development: In February
2019, Sistema sold 51% of JSC Leader Invest to Etalon Group, while
retaining a 49% stake in the company. Following this transaction, Sistema
acquired 25% of Etalon Group for USD 226.6 million. The transactions
create a top-three player in the Moscow and St Petersburg markets, bring
together complementary development portfolios, and allow Leader Invest to
leverage Etalon's general contracting capacity and regional sales network
to accelerate the construction and sales of its own projects, as well as
generating significant synergies in construction and reducing
administrative expenses.
· Strengthened position in the fast-growing e-commerce market: In February
2019, Sistema acquired 18.7% of Russia's leading multi-category online
retailer, Ozon Holdings, from MTS for RUB 7.9 billion. The Company has
also acquired shares from a number of minority shareholders in Ozon. As a
result, Sistema's direct ownership in Ozon stands at 21.9%. In addition,
venture fund Sistema_VC holds a 16.3% stake in Ozon. The decision to
increase the stake is based on Sistema's strategic bet on growth prospects
for e-commerce and market consolidation through investments in the market
leader.
· Increased and crystalized value of pharmaceuticals business: In December
2018, Sistema acquired a stake in leading pharmaceutical company OBL Pharm
for RUB 1.83 billion, as part of an investment consortium consisting of
VTB and members of the OBL Pharm management team. The strategic aim of the
transaction is to merge OBL Pharm with Sistema's pharmaceutical holding,
Binnopharm, and to build the combined company, operating under the Alium
brand, into a top-five pharmaceutical producer in the commercial segment,
the fastest-growing segment of the Russian pharma market. In April 2019
the Russian Direct Investment Fund (RDIF), the Russia-China Investment
Fund (RDIF) and major Middle Eastern investors joined the project, and
will invest more than RUB 4 billion to acquire a stake in OBL Pharm.
· Debt portfolio optimisation via an active presence on the public bond
market: In February - April 2019, Sistema successfully returned to the
local capital market. The Corporation repurchased series 001P-07 bonds in
the amount of RUB 482.2 million out of the total of RUB 10 billion via a
tender offer, and completed a secondary placement of the same amount,
issued two RUB 10 billion series 001P-009 and series 001P-10 bonds. The
placements generated significant investor interest in Sistema's debt
securities and demonstrated positive market perception of the
Corporation's investment case. Proceeds from these placements were used in
May 2019 to redeem at maturity the Company's USD 500 million Eurobond.
· Dividend payments: In March 2019, Sistema's Board of Directors resolved
to recommend that the Annual General Meeting of Shareholders approve
dividends for the full year 2018 of RUB 1,061.5 million (which corresponds
to RUB 0.11 per ordinary share or RUB 2.2 per GDR).
1Q 2019 FINANCIAL RESULTS
· Consolidated revenue increased by 10.4%[1] year-on-year to RUB 185.5
billion.
· Adjusted OIBDA[2] increased by 4.5% year-on-year to RUB 62.0 billion;
the adjusted OIBDA margin was 33.4%.
· Adjusted net profit attributable to Sistema[3] was RUB 15.7 billion.
Andrey Dubovskov, President and Chief Executive Officer of Sistema, said:
"Sistema continues to excel in our core competency: developing assets. Our
portfolio companies go off to a strong start to the year, delivering
excellent operational and financial results. Our portfolio companies
continued to set the trend in their respective markets, expanded the range
of products and services they offer customers, and increased their market
shares.
"Leveraging its core user base and advantages of scale, MTS is expanding in
attractive complementary digital industries - cloud services, e-sports and
Internet of Things. Detsky Mir continues to open new stores in Kazakhstan
and Belarus, transforming from a national to an international brand, while
simultaneously strengthening its e-commerce presence in the rapidly
developing Russian market. Segezha Group showcased historically strong
efficiency by posting a record OIBDA margin, while growing sales.
Agroholding Steppe continues to expand its business: revenue grew by triple
digits primarily due to growth in the Agrotrading segment. Steppe is also
continuing to build a port on the Azov Sea and two dairy farms in the Rostov
and Krasnodar regions. Medsi extended its lead over its competitors in the
private healthcare market, delivering high-quality growth in both the
Mandatory and Voluntary Health Insurance segments, as well as the individual
patients segment.
"As our portfolio companies continue to deliver strong results and generate
stable cash flow for the Corporation, work is underway at the Corporate
Centre to further crystallise the value of our businesses. In the first
quarter we focused on three areas: real estate, pharmaceuticals and
e-commerce.
"With the sale of a controlling stake in Leader Invest to Etalon Group and
the subsequent acquisition of a stake in Etalon, we laid the groundwork for
creation of a new residential real estate market leader in Moscow and St.
Petersburg. Integration of the two businesses is underway and we expect to
see benefits of synergies and scale in the near future. Another major
project relates to our pharmaceuticals business. We acquired leading Russian
pharmaceutical company OBL Pharm as part of a consortium of investors, and
are currently working to merge it with our existing asset, Binnopharm, under
the brand name Alium. In April, the RDIF, RCIF and major Middle Eastern
sovereign wealth funds signed on as co-investors, confirming the strong
investment case for this project.
"We also increased our stake in leading multi-category online retailer Ozon
through the consolidation of a stake owned by MTS and acquisition of shares
of several minority shareholders. Ozon is well placed to emerge a
market-leader from the fragmented e-commerce sector as the market leader,
which will enhance the value of Sistema's stake in the company. By
increasing our stake, Sistema aims to focus more resources and energy toward
this goal."
***
Conference call information
Sistema's management will host a conference call today at 10:00 am (New York
time) / 3:00 pm (London time) / 4:00 pm (CEST) / 5:00 pm (Moscow time) to
present and discuss the 1Q 2019 results.
To participate in the conference call, please dial:
Russia
+7 495 646 9190
8 10 8002 8675011 (toll-free)
UK
+44 330 336 9411
0800 279 7204 (toll-free)
US
+1 929 477 0402
866 575 6539 (toll-free)
Conference ID: 7037035
Link to webcast: https://webcasts.eqs.com/sistema20190604 [1]
Or quote the conference call title: "Sistema First Quarter 2019 Financial
Results".
A replay of the conference call will be available on Sistema's website
www.sistema.com [2] for at least seven days after the event.
For further information, please visit www.sistema.com [2] or contact:
Investor Relations Public Relations
Nikolai Minashin Sergei Kopytov
Tel.: +7 (495) 730 66 00 Tel.: +7 (495) 228 15 32
n.minashin@sistema.ru kopytov@sistema.ru
FINANCIAL SUMMARY AND GROUP OPERATING REVIEW
(RUB million) 1Q 2019 1Q 2018 Change
Revenue 185,544 168,014 10.4%
Adj. OIBDA 61,962 59,269 4.5%
Operating profit 27,885 26,490 5.3%
Net profit/(loss) attributable to Sistema 16,641 (1,243) -
Adj. net profit / (loss) attributable to 15,713 (215) -
Sistema
In 1Q 2019, Sistema's consolidated revenue increased by 10.4% year-on-year
as a result of increased revenue from key assets: MTS, thanks to strong
results from the business in Russia and Ukraine; Detsky Mir, as a result of
the ramp-up of stores opened in 2017-18, improved like-for-like sales in
Russia and Kazakhstan and increased contributions from the e-commerce
segment; Segezha Group, primarily as a result of strong sales in the paper
and packaging segment; Agroholding Steppe, due to positive dynamics in the
agrotrading business, launch of the sugar and grocery product marketing
division, and stronger revenue from the Dairy and Vegetable divisions;
Medsi, as a result of a nearly three-fold increase in in-patient volumes
under the Mandatory Health Insurance programme, revenue growth in the
(MORE TO FOLLOW) Dow Jones Newswires
June 04, 2019 03:01 ET (07:01 GMT)
DJ SISTEMA ANNOUNCES FINANCIAL RESULTS FOR THE FIRST -2-
Voluntary Health Insurance segment and increased revenues from individual
patients.
Group adjusted OIBDA increased by 4.5% year-on-year in the first quarter,
reflecting strong results at MTS, primarily due to continued growth in the
mobile services segment; Detsky Mir as a result of strong revenue dynamics,
optimisation of purchasing prices, efficient management of the product
assortment and increased operational efficiency; Segezha Group, mainly as a
result of increased efficiency of sales in the paper and packaging segment;
Agroholding Steppe, due to growth of the agrotrading segment, sugar and
grocery trading segment and increased output in the dairy division; Medsi,
as capacity utilisation of key assets ramped up and revenue per square metre
of medical facilities rose. The Group adjusted OIBDA margin was 33.4%.
Group selling, general and administrative expenses (SG&A) increased by 7.8%
year-on-year in the first quarter to RUB 33.7 billion, driven by increased
SG&A at MTS, Detsky Mir and Segezha Group as a result of continued business
development. The SG&A/revenue ratio declined year-on-year from 18.6% to
18.2% due to sustained cost controls. SG&A at the Corporate Centre declined
year-on-year by 15.5% to RUB 1.3 billion as a result of decreased
compensation costs, reduced administrative expenses and headcount
optimisation.
Group capital expenditures decreased slightly year-on-year to RUB 21.3
billion.
OPERATING REVIEW[4]
*******************
MTS
Leading telecommunications operator and digital services provider in Russia
(RUB million) 1Q 2019 1Q 2018 Change
Revenue 118,025 107,926 9.4%
OIBDA 58,558 52,076 12.4%
OIBDA margin 49.6% 48.3% 1.3 p.p.
Operating income 32,139 26,754 20.1%
Adj. profit 7,076 7,711 (8.2%)
attributable to
Sistema
In 1Q 2019, revenue at MTS rose by 9.4% year-on-year due to the robust
performance of MTS's Russian operations, which in turn was driven by
positive trends in revenue from mobile services and an increase in retail
smartphone sales; outstanding performance of the company's Ukrainian
operations due to continued increases in data usage, as well as the
consolidation of MTS Bank, also contributed to the growth.
OIBDA grew by 12.4% in 1Q 2019 primarily due to continued growth of the
mobile services segment. OIBDA was also affected by one-off gains from the
sale of Ozon shares to Sistema PJSFC[5] and the sale of MGTS real estate
assets to JSC Business Nedvizhimost. The OIBDA margin grew by 1.3 p.p. to
49.6% in 1Q 2019.
In 1Q, adjusted net profit decreased by 8.2% year-on-year due mainly to a
rise in interest costs.
As part of its digital strategy, MTS acquired cloud provider IT-Grad,
allowing the company to expand its cloud business and increase the
efficiency of its CloudMTS provider.
MTS also expanded its gaming ecosystem with the launch of interactive media
platform WASD.TV, which will serve as a base for various eSport services,
from professional cybersport to multimedia content.
OUTLOOK FOR 2019
MTS forecasts revenue growth of slightly above 3%.
MTS targets keeping OIBDA at the same level as 2018.
SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
Under the new dividend policy for 2019-2021 MTS will seek to pay at least
RUB 28.0 per ordinary share per calendar year, distributed in two
semi-annual payments. In April 2019, the Board of Directors of MTS
recommended that the Annual General Meeting of shareholders scheduled for 27
June 2019 approve final dividends for FY 2018 in the amount of RUB 19.98 per
share (RUB 39.96 per ADR).
Detsky Mir
Largest children's goods retailer in Russia [6]
(RUB million) 1Q 2019 1Q 2018 Change
Revenue 27,886 24,020 16.1%
Adj. OIBDA 4,165 3,488 19.4%
Adj. OIBDA margin 14.9% 14.5% 0.4 p.p.
Operating income 1,493 1,079 38.4%
Adj. profit 10 182 (94.5%)
attributable to
Sistema
SG&A/revenue 14.0% 15.0% (1.0 p.p.)
Like-for-like 6.6% 5.1% 1.5 p.p.
growth[7]
Traffic growth 7.5% 8.8% (1.3 p.p.)
Average ticket (0.9%) (3.4%) 2.5 p.p.
growth
In 1Q 2019, Detsky Mir's revenue grew by 16.1% year-on-year. Growth was
driven by the ramp-up of stores opened in 2017-2018 to full operating
capacity, as well as by accelerated growth of like-for-like (LFL) sales in
Russia and Kazakhstan and an increase in online sales, which rose by 74.1%
year-on-year and accounted for 9.3% of total revenue for the period.
Adjusted OIBDA increased by 19.4% to RUB 4.2 billion in 1Q 2019 due to
robust revenue performance, optimisation of purchasing costs, effective
management of the product assortment and increased operational efficiency.
The adjusted OIBDA margin increased by 0.4 p.p. to 14.9% in 1Q 2019,
primarily due to a decrease in marketing and staff costs as a result of an
increase in labour efficiency. The SG&A/revenue ratio decreased from 15.0%
to 14.0% in 1Q.
Adjusted profit attributable to Sistema decreased from RUB 0.18 billion to
RUB 0.01 billion in 1Q 2019 due to an increase in interest expenses and FX
losses.
Six new Detsky Mir stores were opened in 1Q 2019. As of 31 March 2019, the
total number of stores[8] stood at 748. Detsky Mir entered the Belarusian
market under the Detmir brand with 3 stores and total selling space of 3,000
sq. m. By the end of 2019, the Company plans to open at least 80 new stores,
including 10 stores in Belarus and at least 8 stores in Kazakhstan where it
currently operates 30 stores.
SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
On 16 May 2019, the Annual General Meeting of shareholders approved a final
dividend for FY 2018 in the amount of RUB 4.45 per share, for a total of RUB
3.3 billion.
Segezha Group
Leading Russian vertically integrated forestry holding
(RUB million) 1Q 2019 1Q 2018 Change
Revenue 14,487 12,129 19.4%
OIBDA 3,970 2,176 82.5%
OIBDA margin 27.4% 17.9% 9.5 p.p.
Operating income 2,714 1,064 153.8%
Net profit/(loss) 2,730 (537) -
attributable to
Sistema
FX-denominated 72.5% 68.1% 4.4 p.p.
rev.
Own consumption 69.1% 56.3% 12.8 p.p.
Total forestry, 1,619.3 1,386.0 16.8%
thsd cu m
Segezha Group's revenue grew by 19.4% year-on-year to RUB 14.5 billion in 1Q
2019, due in significant measure to increased sales efficiency in the Paper
and Packaging segment, which accounted for 60% of total revenue. Another
factor that made a positive contribution to revenue was growth of plywood
sales following the commissioning of new production capacity in the Kirov
region in July 2018.
OIBDA increased year-on-year by 82.5% to RUB 4.0 billion in the first
quarter of 2019 primarily as a result of changes in the sales mix in favour
of higher-margin paper products, as well as increased sales efficiency due
to reduced commissions for agents and transition to open book contracts.
Combined, these factors allowed Segezha to post a record OIBDA margin of
27.4%, an increase of 9.5 percentage points versus the same period a year
earlier.
Net profit was RUB 2.7 billion vs. a loss of RUB 0.5 billion in 1Q 2018.
FX-revaluation had a major positive impact on net profit.
Paper output totalled 100,910 tonnes, up 14% versus 2018. The production
increase was mainly the result of reductions in time spent on equipment
repairs at Segezha Pulp & Paper Mill in 1Q 2019. In 1Q 2019 Segezha's sack
paper sales increased by 18.0% to 65,000 tonnes due to increased volumes
shipped under existing contracts and expansion of the client base.
Paper sack output increased by 3.7% year-on-year in 1Q 2019 as a result of
more working days compared to 1Q 2018. In the reporting period Segezha sold
280 million paper sacks, in line with 1Q 2018 sales. A portion of shipments
made in 1Q 2019 will be reflected in the results for 2Q 2019.
Birch plywood sales volumes increased by 61% year-on-year to 37,000 cu m in
1Q 2019. Output growth was driven by the launch of the new plywood
production facility in the Kirov region in July 2018. Higher production
volumes drove growth in shipments to existing clients as well as expansion
of the client portfolio.
Sawn timber output increased year-on-year by 4.0% to 216,000 cu m in 1Q 2019
primarily due to increased production efficiency at the Onezhsky and
Lesosibirsk facilities. Sales volumes were in line with the first quarter
2018.
SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
In May 2019, an agreement was signed for equipment to build a new plant
producing cross-laminated timber (CLT) with annual capacity of 35,000 cu m
per year at the Sokol Wood Processing Plant. CLT is an advanced construction
material that is more environmentally friendly and reduces construction
(MORE TO FOLLOW) Dow Jones Newswires
June 04, 2019 03:01 ET (07:01 GMT)
times compared to alternative materials. Construction of the CLT plant will
support an increase in margins across the portfolio by introducing a
next-generation product.
Agroholding Steppe
Major agriculture holding and one of Russia's largest land owners
(RUB million)[9] 1Q 2019 1Q 2018 Change
Revenue 6,282 2,536 147.7%
OIBDA 829 689 20.3%
OIBDA margin 13.2% 27.2% (14.0 p.p.)
Operating income 597 336 77.8%
Net 117 (64) -
profit/(loss)
attributable to
Sistema
Agroholding Steppe delivered revenue growth of 147.7% year-on-year in 1Q
2019, to RUB 6.3 billion. This significant revenue increase was driven
primarily by positive dynamics in the Agrotrading segment, the start of
aggressive growth of the Sugar & Grocery Product Trading segment and
increased revenue from the Dairy and Vegetable divisions.
OIBDA grew by 20.3% year-on-year to RUB 0.8 billion as a result of growth in
the Agrotrading and Sugar & Grocery Product Trading segments as well as
increased production volumes in the Dairy segment.
Steppe posted a net profit of RUB 117 million versus a loss during the same
period last year.
Capex amounted to RUB 163 million for 1Q 2019 due to acquisition of new farm
machinery and construction of dairy farms in the Krasnodar and Rostov
regions.
The results of the field crop segment were affected by a 28% year-on-year
increase in Steppe's average export price for wheat in the quarter, as sales
efficiency improved and global grain prices rose.
Steppe's land bank increased to 412,000 hectares as of the end of 1Q 2019
following acquisition of a new agricultural asset in the Stavropol region.
Export volumes of agricultural products in 2018 totalled 174,000 tonnes, up
by 65% versus the same period in 2018.
The Dairy segment delivered stable growth of operational results: the gross
milk yield in 1Q 2019 increased by 20.4% year-on-year to more than 13,000
tonnes, while productivity per cow increased by 9.5% year-on-year. As of the
end of the reporting period, the herd consisted of 4,856 cows.
The gross vegetable harvest in 1Q 2019 was 4,700 tonnes, a year-on-year
decline as a result of changes to the production programme and shift in the
timetable for vegetable harvesting.
Medsi
Leading private healthcare operator in Russia
(RUB million) 1Q 2019 1Q 2018 Change
Revenue 5,190 3,511 47.8%
Adj. OIBDA 883 464 90.5%
Adj. OIBDA margin 17.0% 13.2% 3.8
p.p.
Operating income / 160 (16) -
(loss)
Adj. net profit/(loss) 211 (103) -
attributable to
Sistema
Patient visits, mln 2.3 2.0 15.0%
Services provided, mln 4.1 3.3 23.2%
Average ticket, thsd 2.3 1.8 28.5%
RUB
Medsi's revenue increased by 47.8% year-on-year in 1Q 2019 to RUB 5.2
billion due to a nearly threefold increase in in-patient treatments under
the Mandatory Health Insurance programme (MHI), revenue growth of 33.1% to
RUB 2.1 billion in the Voluntary Health Insurance segment (VHI), and an
increase in revenue from individual patients of 23.1% to RUB 1.5 billion.
The average cheque grew by 28.5% to approximately 2,300 primarily due to the
increased proportion of complex procedures in the in-patient segment and the
diagnostic segment, and also due to the effect of higher prices in line with
market trends.
Adjusted OIBDA[10] increased by 90.5% in 1Q 2019 to RUB 883 million due to
the continued ramp-up of facilities and increase in revenue per sq m of
medical space. The adjusted OIBDA margin grew by 3.8 p.p. to 17.0% in 1Q
2019, thanks to growth in capacity utilisation, an increase in efficiency
per sq m and growth of volumes at previously opened clinics. Net profit was
RUB 211 million in the quarter versus a loss a year earlier on the back of
positive OIBDA dynamics.
Business Nedvizhimost and its subsidiary Mosdachtrest
Rental assets with a unique pool of properties
(RUB million) 1Q 2019 1Q 2018 Change
Revenue 739 857 (13.7%)
OIBDA 113 235 (51.9%)
OIBDA margin 15.3% 27.5% (12.2
p.p.)
Operating income 13 167 (92.3%)
Profit/(loss) attributable to (38) 41 -
Sistema
In 1Q 2019 revenue from Sistema's rental assets decreased by 13.7%
year-on-year to RUB 739 million due to a decrease in sales of land plots in
the Moscow region (1.57 ha vs 2.24 ha in 1Q 2018) and a decrease in revenue
from commercial property leases. 68.6 thousand sq m of commercial
real-estate was sold in 2018, which significantly affected revenue in 1Q
2019 due to a decrease in leased space.
OIBDA decreased in 1Q 2019 by 51.9% year-on-year to RUB 113 million
following revenue dynamics and changes in the revenue mix. The OIBDA margin
decreased from 27.5% to 15.3% in 1Q 2019 due to changes in the revenue
structure, as sales of real estate command higher margins than the rentals
business.
The net loss in 1Q 2019 was due to higher interest payments.
In 2019, as part of the Group's strategy to increase the value of non-core
assets owned by its portfolio companies, Business Nedvizhimost acquired
buildings of 54 telephone exchanges from PJSC MGTS with payments to be made
in instalments over 10 years and interest to be assessed at an annual rate
of 9%. Excluding VAT and interest on the deferred payments, the transaction
totalled RUB 5.9 billion.
RTI
Leading Russian high-tech company
(RUB million) 1Q 2019 1Q 2018 Change
Revenue[11] 3,826 4,619 (17.2%)
Adj. OIBDA 163 57 186.5%
Adj. OIBDA margin 4.3% 1.2% (3.1 p.p.)
Operating (loss) (421) (405) -
Adjusted profit/(loss) attributable (1,223) (1,349) -
to Sistema
In 1Q 2019 RTI's revenue decreased by 17.2% year-on-year due to changes to
the timetable of agreements and execution of new state procurement contracts
by a number of RTI Group companies. Most of RTI's revenue typically falls in
the second half of the year.
The year-on-year increase in adjusted OIBDA was a result of creation in 1Q
2018 of provisions for inventory.
The increase in RTI's net debt was the result of a decrease in unrestricted
cash. Funds totalling RUB 8.7 billion earmarked for work under state
contracts are held on RTI's accounts but not factored into net debt
calculations.
In 1Q 2019 RTI completed a full-scale trial of a direction-finding bearing
complex that analyses electromagnetic positions and searches for sources of
radio frequency interference, and simplifies the task of ensuring reliable
functioning of radioelectronic equipment.
Bashkirian Power Grid Company (BPGC)
One of Russia's biggest power grid companies
(RUB million) 1Q 2019 1Q 2018 Change
Revenue 5,348 5,024 6.4%
OIBDA 1,428 1,738 (17.8%)
OIBDA margin 26.7% 34.6% (7.9 p.p.)
Operating income 770 1,115 (30.9%)
Profit attributable to Sistema 585 887 (34.1%)
New connections 3 345 4 061 (17.6%)
Connected power, mVt 57 69 (17.4%)
In 1Q 2019 BPGC's revenue grew by 6.4% to RUB 5.3 billion due to indexation
of tariffs for electricity transmission services that came into effect from
1 July 2018 and an increase in lease payments for deployment of fibre-optic
cables on electricity pylons.
OIBDA decreased in 1Q 2019 due to the impact of one-off factors and the high
base effect as a result of lease payments received from PJSC Bashinformsvyaz
in 1Q 2018.
The OIBDA margin decreased in 1Q 2019 as a result of higher costs for
services provided by PJSC Federal Grid Company of Unified Energy System due
to an increase in paid-for capacity, as well as the impact of one-time
factors in 1Q 2018.
The decrease in net profit in 1Q 2019 was primarily due to the decrease in
OIBDA.
During the reporting period, 11 distribution and transformer sub-stations
were reconstructed, 3 km of cable was laid, and 4 thousand meters were
installed under the Smart Grid project.
In 2019 BPGC will undertake construction of major facilities including the
110 kW Uzyan-Bainazarovo transmission line in the Beloretsk district, the
Romanovka sub-station with two 40 MVA transformers, the Kustarevskaya
sub-station with two 40 MVA transformers, and a double-circuit tap-off from
the 110 kW Ufa-Yuzhnaya Naberezhnaya overhead power line to the
Kustarevskaya sub-station in Ufa.
SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD
On 14 May 2019 the Annual General Meeting of shareholders of BPGC approved a
(MORE TO FOLLOW) Dow Jones Newswires
June 04, 2019 03:01 ET (07:01 GMT)
