ROSTELECOM PJSC (RKMD)
ROSTELECOM PJSC: ROSTELECOM FINANCIAL AND OPERATING RESULTS FOR THE FIRST QUARTER 2021

13-May-2021 / 09:30 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 FINANCIAL AND OPERATING RESULTS FOR THE FIRST QUARTER 2021

 

First quarter revenue increased by 9%; OIBDA[1] up 18%; net profit up 58% and FCF[2] increases by RUB 8.4 billion.

Moscow, Russia - May 13, 2021 - Rostelecom PJSC (MOEX: RTKM, RTKMP; OTCQX: ROSYY), the largest digital service provider in Russia, today announces its consolidated financial results for the first quarter of 2021 prepared in accordance with IFRS[3].

FIRST QUARTER 2021 KEY FINANCIAL HIGHLIGHTS

  • Revenue grew by 9% to RUB 132.0 billion compared to 1Q 2020:
  • OIBDA up 18% to RUB 55.4 billion;
  • OIBDA margin up 3.3 p.p. to 42.0%;
  • Net profit up 58% to RUB 11.8 billion;
  • CAPEX[4] excluding state programs increased by 24% year-on-year to RUB 27.2 billion (20.6% of revenue);
  • FCF of RUB 2.1 billion following a marked improvement of RUB 8.4 billion;
  • Net Debt[5] (including lease liabilities) increased by 1% YTD, amounting to RUB 470.7 billion, resulting in a Net Debt/OIBDA ratio of 2.3x.

 

Key figures for 1Q 2020, RUB mln

RUB million

1Q 2021

1Q 2020

 change, y-o-y

Revenue

131,958

121,613

9%

OIBDA

55,437

47,082

18%

OIBDA margin %

42,0%

38,7%

-

Operating Income

22,672

19,309

17%

Operating margin %

17,2%

15,9%

-

Net Income

11,810

7,453

58%

% of revenue

8,9%

6,1%

-

Capital Expenditure excl. state programs

27,181

21,873

24%

% of revenue

20,6%

18,0%

-

Net debt (incl. lease liabilities)

470,665

471,166

(-0.1%)

Net debt/ OIBDA

2.3

2.7

-

FCF

2,088

(6,358)

8,446


 

 

Mikhail Oseevskiy, President of Rostelecom, commented: "2021 has started off well: the Company's revenue increased by 9%, OIBDA was up 18%, and net profit increased by 58% in the first quarter of 2021. We were also able to significantly improve our free cash flow position, which increased by RUB 8.4 billion over the reporting period.

 

"The 2025 development strategy adopted by the Board of Directors this quarter puts us on a course to maintain our strong financial and operating results. The updated strategy sharpens our focus on digital transformation and the continuation of a sustainable development model of an integrated provider of digital services and solutions. The pursuit of smart growth in traditional businesses is central to our latest strategic cycle as we seek to maximize return on investment and cash flow. We are also intending to consolidate our leadership and further develop segments such as data centres and cloud services, cybersecurity, online medicine, digital regions and government digital services.

 

"To meet these strategic ambitions, we will be looking closely at implementing radical cost reductions in traditional businesses, to significantly increase productivity and provide a meaningful uplift on our OIBDA margin as a group.

 

"Our priority task is to grow OIBDA by one and a half times. A significant part of this goal will be met by our fast-growing businesses, which carry a higher growth multiple than our traditional telecom segments. Furthermore, our new dividend policy will guarantee shareholders an increase in dividend payments, which combined with our growth story, contributes to Rostelecom's attractiveness as an investment."

 

 

Vladimir Kirienko, First Vice-President of Rostelecom, commented: "During the first three months of this year, growth in new digital services was accompanied by stable growth in our core services. Our retail segment saw a remarkable pace of growth despite market saturation. We have posted a threefold increase in revenue from the cloud video storage service, our Wink platform, which is gaining in popularity and is now among the top 5 online cinemas in the country. Our flagship product "Rostelecom Key" has passed the 100,000-user milestone, while the number of "Game" tariff subscribers continues to grow, helped by its promotion to the Tele2 Russia client base. We are developing partnerships with large corporations, small and medium-sized businesses and government agencies to offer them a wide range of digital services. Rostelecom experts have, as an example, used our Video Surveillance and Video Analytics platform to enhance the monitoring of solid municipal waste, they have developed a geographic information system for the agro-industrial complex of Udmurtia, we have developed a product to monitor the security of Solar appScreener applications for two international clients. Together with Mail.ru Group, we have also launched the educational platform Sferum, which in just a few weeks reached more than 100,000 school children across the country.

 

"We are also focusing our efforts on the businesses that are becoming an increasingly significant part of our portfolio, which includes our contribution to the state's Digital Economy program, which seeks to reduce the digital divide in Russia and ensure that businesses and households have equal access to digital infrastructure wherever they are in the country.

 

"It is also important to highlight the strong results that Tele2 Russia continues demonstrate as it firmly consolidates its leadership in the mobile segment, particularly in terms of NPS and revenue growth rates. The successful transformation of Rostelecom into a digital giant is enabling us to formulate ambitious strategic plans for the coming years, based on our new set of growth objectives that set out to exceed market growth for our innovative clusters."

 

Sergey Anokhin, Senior Vice-President and Chief Financial Officer added: "The company continued to demonstrate consistently strong dynamics across all key financial indicators in 2021, thanks to on-going drive to increase efficiency and optimise costs. Free cash flow, one of our key target indicators, was strong during the quarter to remain positive at the end of the first quarter for the first time in recent years.

 

"To increase transparency, we have taken steps to clarify the methodology used to calculate net debt, including lease liabilities, a significant part of which is accrued in accordance with IFRS 16. It is important to point out that the new methodology has changed Rostelecom's Net debt/OIBDA ratio, which is purely technical and not due to an actual increase in Rostelecom's debt burden beyond the previously established levels. Rostelecom anticipates that debt levels will remain below a Net debt/OIBDA ratio of 3x on an annualized basis. Corresponding clarifications have been made to the approved dividend policy by adjusting the principles around which the dividend is agreed and paid. The same clarifications will ensure that Rostelecom preserves its credit ratings by S&P, Moody's, Fitch, ACRA and Expert RA.

 

"While our performance in during the first quarter has exceeded our expectations, macroeconomic risk factors that could negatively impact our results remain and we prefer to be conservative when setting guidance for 2021. We therefore maintain our previously published forecast for 2021, where we expect to see a minimum 5% increase in consolidated revenues and OIBDA, with СAPEX of between RUB 110-115 billion, excluding the implementation of state programs.  We may revisit these forecasts over the course of the coming reporting periods."

 

KEY OPERATING HIGHLIGHTS

Fixed business

Number of subscribers (million):

1Q 2021

1Q 2020

change, y-o-y

4Q 2020

 change, y-o-y

Internet access

13.5

13.2

2%

13.5

0%

B2C: Broadband

12.4

12.2

2%

12.4

0%

B2B: Broadband + VPN

1.1

1.1

6%

1.1

1%

Pay TV

10.8

10.5

3%

10.8

0%

Incl. IPTV

6.2

5.7

9%

6.1

2%

Hosted PBX

0.170

0.128

33%

0.160

6%

Local telephony services

13.7

15.2

(10%)

14.0

(3%)

 

 

 

ARPU[6] (RUB):

1Q 2021

1Q 2020

change, y-o-y

4Q 2020

 change, y-o-y

Internet access

 

 

 

 

 

B2C: Broadband

406

397

2%

395

3%

B2B: Broadband + VPN

3,477

3,368

3%

3,372

3%

Pay TV

254

257

(1%)

250

2%

Incl. IPTV

307

319

(4%)

302

2%

Hosted PBX

977

1,118

(13%)

1,186

(18%)

Blended ARPU[7]

563

551

2%

546

3%

 

Mobile business

 

1Q 2020

1Q 2019

change, y-o-y

4Q 2020

 change, y-o-y

Data Traffic, incl. MVNO,Pb

1,457

1,087

34%

1,442

1%

Churn, %

(8.2%)

(9.2%)

(1.0 p.p.)

(8.1%)

0.1 p.p.

Growth of active mobile Internet users, %

19.9%

36.1%

(16.2 p.p.)

20.0%

(0.1 p.p.)

 

  1. The total number of Internet subscribers among households grew by 2% to 12.4 million in the first quarter of 2021 compared to the corresponding period of last year. ARPU also increased by 2% year-on-year to RUB 406.
  2. The total number of Internet and VPN subscribers in B2B increased by 6% year-on-year to 1.1 million; ARPU increased by 3% year-on-year to RUB 3,477.
  3. The number of pay-TV subscribers grew by 3% to 10.8 million users compared to the corresponding period of last year, with average ARPU of RUB 254 in B2C;
  • the number of IPTV subscribers increased by 9% to 6.2 million, and ARPU was RUB 307 in B2C;
  1. The number of active mobile Internet users increased by 20% year-on-year during 1Q 2020. Year-on-year growth in mobile Internet data traffic reached 34% during the first quarter of 2021; while cellular customer base churn decreased to 8.2%;
  2. The number of local telephony subscribers decreased by 10% to 13.7 million.

 

KEY EVENTS RELATING TO Q1 2021 AND AFTER THE END OF THE REPORTING PERIOD

Business news

  • Rostelecom continues to develop and expand its range of products and services:
  • within the "Game" tariff plan:
    • the tariff has been expanded to subscribers of the Alliance Telecom network, making the plan's most popular games available to a larger number of subscribers in the Far East;

Revenue generated by the "Game" tariff increased by 13% in the first quarter of 2021.

  • Digital OTT platform Wink is now among the top 5 online cinema in the country:
    • new TV channel packages launched: Transformer, Maximum, Premium as well as a subscription to Greatest Hits videos;
    • launched an AVOD (Advertising Video on Demand) model to provide free access to content by viewing ads;
    • together with Tele2 Russia, an "exchange minutes for films" offer has been implemented.

During the first quarter of 2021, the number of Wink customers accessing videos on two or more devices increased by 30% to 2 million.  Meanwhile, the number of Wink customers who manage the service using voice assistants tripled during 1Q 2021 to over 50,000.

  • Rostelecom's "Key solution" continues to expand its functionality:
    • Added a video analytics function to track special vehicles and traffic control;
    • SIP video monitors for apartments have been introduced;

The "Key solution" surpassed a key milestone of 100,000 users during the first quarter of 2021.

  • Enhancements to "Smart Home" and home video surveillance services continue to be introduced, including:
    • a set of measures have been implemented to improve the service's resistance to DDoS / Brute Force attacks;

Revenue generated from the cloud video storage service has increased threefold.

  • B2C fibre broadband revenues grew by 13%;
  • Launched the educational platform "Sferum" jointly with Mail.ru Group, which saw more than 100,000 schoolchildren became users of the digital educational platform in just a few weeks;
  • a new platform "Wi-Fi 2.0" was launched for corporate clients with advanced capabilities in terms of statistical and analytical tools for analyzing user behaviour in a public Wi-Fi network;
  • Rostelecom continued to expand its digital segment during the first quarter of 2021:
  • as part of the development of cybersecurity services:
    • additional services were introduced to the market:
      • a new automated Incident Response Plan (IRP);
      • a sandbox service to protect against advanced cyber threats;
      • a new version of the Solar appScreener 3.8 source code security product, which now has an innovative vulnerability analysis function under trial;
      • updates made to the Solar webProxy 3.5 secure web gateway with additions in the role model of differentiation of access rights and flexible export of data from the system;
    • The Solar inRights access rights management solution received compatibility certification for 1C: Enterprise and the Alt Server operating system based on Linux;
    • Completion of a large-scale project to monitor and respond to incidents within Rosseti's infrastructure in Ural;
    • Support was provided to Halyk Bank JSC, the largest universal commercial bank in the Republic of Kazakhstan, with the installation of the Solar Dozor system to prevent the leakage of confidential data in 25 of the bank's branches;
    • supported the Singapore State insurance fund, Central Provident Fund Board (CPF), and Scoot Airlines, a subsidiary of Singapore Airlines with the integration of Solar appScreener - a service to manage applications' vulnerability;
  • Rostelecom also continues to develop its suite of B2B cloud and data centre services:
    • Cloud solution DataLine Cloud-152 was certified to operate state information systems and was deployed at two Moscow-based data centres;
    • The TIONIX Virtual Security product received the FSTEC certification (Federal Service for Technical and Export Control);
    • The Internet Technical Center (TCI) was included on the register of domestic IT companies, and has also received ISO / IEC 27001: 2013 certification;
    • A new 300-rack data centre was launched in Novosibirsk;
  • Operator business segment highlights include:
  • 10% year-on-year increase in О2О[8] project revenues;
  • the first long-term contract was awarded to Rostelecom and Megafon to provide a section of the optical spectrum;
  • the provision of a 100G link from Frankfurt to Tokyo in preparation for the 2021 Olympic Games as well as a 100G link to Frankfurt;
  • Large projects undertaken include:
  • the development of a geographic information system for an agro-industrial complex at Udmurtia;
  • the implementation of an agribusiness systems integration project for Agrotech group in the Far East;
  • The roll out of digital infrastructure required to undertake the Russian national Census in 2021, as part of a government contract with Rosstat.
  • Rostelecom's subsidiary, mobile operator Tele2, continues to strengthen its offering and customers can now:
    • collect and save up minutes and gigabytes indefinitely;
    • Use digital payment cards;
    • gain access to online cinema Wink;
    • purchase SIM cards at Lukoil gas stations;
    • get a terabyte of Internet when buying Samsung gadgets;
    • receive paid services regardless of their account balance.

During the year the company increased the number of base stations by almost a third;

Other news

 

OPERATING REVIEW

Revenue analysis

 

 

Revenue structure by services

RUB million

1Q 2021

1Q 2020

 change

Mobile

46,100  

 40,964  

13%

Broadband

24,029  

 21,993  

9%

Digital

14,149  

 12,520  

13%

TV services

9,949  

 9,489  

5%

Wholesale services

18,397  

 17,771  

4%

Interconnect and traffic transit services

4,422  

 4,247  

4%

VPN

7,554

 7,026  

8%

Rent of channels

2,476  

2,434

2%

Rent and maintenance of telecommunications infrastructure

3,945  

 4,064  

(3%)

Fixed telephony

12,741  

 14,190  

(10%)

Other services

6,593 

4,686

41%

Total

131,958  

121,613  

9%

 

 

 

 

 

 

 

 

Revenue structure by customer segments

RUB million

1Q 2021

1Q 2020

 change

B2C

67,164

62,807

7%

Corporate customers / Government customers

43,741

38,996

12%

Operators

19,973

18,845

6%

Other

1,079

964

12%

Total

131,958  

121,613  

9%

 

In the first quarter of 2021, revenue increased year-on-year by 9% to RUB 132.0 billion, as a result of the following factors:

  • a 13% increase in revenue from mobile services, mainly due to a higher volume of mobile Internet data consumption and standard voice services;
  • 9% growth in revenue from broadband services due to a higher number of subscribers, growth in ARPU as well as revenues from Internet connection contracts;
  • a 41% increase in revenues from other services, due to the consolidation of Lukoil-inform operations acquired during the fourth quarter of 2020, as well as growth in money transfers and mobile payments;
  • a 13% increase in digital revenues mainly driven by the promotion of cloud and data centres services,  the development of  platform-based e-government solutions and other innovative services. The late signing of contracts with relating to some  Digital regions and Cyber security projects also had an impact.

 

Operating income analysis

Breakdown of operating expenses

 

RUB million

1Q 2021

1Q 2020

 change

Personnel costs

(34,170)

(32,190)

6%

Depreciation, Amortization and impairment losses of non-current assets

(31,656)

(26,765)

18%

Interconnection charges

(23,627)

(21,429)

10%

Materials, repairs and maintenance, utilities

(9,591)

(8,840)

8%

Gain on the disposal of PPE and intangible assets

2,545

1,359

87%

Impairment loss of financial assets measured at amortized cost

1,295

(1,163)

-

Other operating income

5,202

5,657

(8%)

Other operating expenses

(19,284)

(18,933)

2%

Total operating expenses

(109,286)

(102,304)

7%

 

 

 

   
             

In the first quarter of 2021, operating expenses increased by 7% compared to the corresponding period of 2020, to amount to RUB 109.3 billion, largely due to the following factors:

  • 18% increase (of RUB 4.9 bln) in depreciation, amortization and impairment losses for non-current assets, due to an increase in depreciation charges associated with new objects, intangible assets and leases;
  • 10% increase (of RUB 2.2 bln) in interconnection charges, due to increased direct costs as well as higher traffic caused by the pandemic and the widespread transition to remote communications;
  • 6% growth (of RUB 2.0 billion) in personnel costs, mainly due to an increase in the share of high-paid employees with skills in digital business;
  • charges relating to the impairment of amortized financial assets amounted to RUB 2.5 billion as a result of the Company's new provisioning method based on projections of credit losses for certain counterparts or its groups;
  • an 87% increase in gains from the disposal of PPE and intangible assets, amounting to RUB 1.2 billion, was recorded mainly due better results in the disposal of real estate. 

Operating profit for the first quarter of 2021 increased by 17% year-on-year to RUB 22.7 billion.

OIBDA for 1Q 2021 increased by 18% to RUB 55.4 billion. OIBDA dynamics were influenced by revenue growth, as well as by the changes in operating expenses referred to above.  OIBDA margin for 1Q 2021 increased by 3.3 p.p. to reach 42.0%. 

Net Income Analysis

Profit before tax increased by 56% year-on-year during the first quarter of 2021 to RUB 15.1 billion. This was mainly due to the increase in operating profit and the absence of foreign exchange losses during the reporting period.

Income tax in 1Q 2021 amounted to RUB 3.3 billion, compared to RUB 2.3 billion during the corresponding period of 2020, following the increase in profit before tax.

Net profit increased by 58% year-on-year during the first quarter of 2021 to reach RUB 11.8 billion.

Financial review

Net operating cash flow for 1Q 2021 increased by 74% to reach RUB 28.7 billion, compared to the corresponding period of 2020.

At the end of the first quarter of 2021, the cash outflow for investments in non-current assets, excluding state programmes, increased by 24% to RUB 27.2 billion (20.6% of revenue). Taking into account state programs, this figure increased by 18% to RUB 30.7 billion (23.3% of revenue).

Free cash flow for Q1 2021 amounted to RUB 2.1 billion, a year-on-year improvement of RUB 8.4 billion. This improvement is mainly due to the growth in OIBDA, as well as lower repayments of accounts payable compared to 1Q 2020.

 

 

 

 

 

 

Free Cash Flow (RUB, billion)

 

 

 

As at March 31, 2020, the Group's total debt (including lease liabilities) remained flat compared to the beginning of the year, amounting to RUB 510.1 billion. 100% of the Group's total debt remains rouble-denominated as at March 31st, 2021.

As at March 31, 2021, the Group's net debt (including lease liabilities) increased by 1% since the beginning of the year to RUB 470.7 billion. The company's debt burden over the past 12 months has decreased from 2.7x to 2.3x net debt/OIBDA[9] (including lease liabilities).

 


OTHER INFORMATION: CONFERENCE CALL

Rostelecom's management will hold a conference call and webcast today at 4:00 PM (Moscow), 3:00 PM (CET), 2:00 PM (UK) and 9:00 AM (NYT). To participate in the conference call, please dial:

UK/ International:   +44 (0) 330 336 9125

USA:    +1 929 477 0324

Russia:     +7 (495) 213 1767

 

Confirmation Code (ENG):  8450902

Confirmation Code (RUS):  8589944

 

 

A webcast of the conference call will only be available in English. To access the webcast please follow the link: https://www.webcast-eqs.com/register/rostelecom20210513/en

 

A replay of the conference call will be available on the Company's website

https://www.company.rt.ru/ir/results_and_presentations/financials/IFRS/2021/1 /

 

* * *

APPENDICES

  1. Reconciliation of OIBDA;
  2. Statement of Comprehensive Income for Q1 2021;
  3. Statement of Cash Flows for Q1 2021;
  4. Statement of Financial Position for Q1 2021.

APPENDIX 1: RECONCILIATION OF OIBDA

OIBDA is a non-U.S. GAAP and non-IFRS financial measure, which the Company defines as operating income before depreciation and amortisation as well as some certain expenses. We believe that OIBDA provides useful information to investors because it is an indicator of the strength and performance of our business operations, including our ability to finance capital expenditures, acquisitions and other investments and our ability to incur and service debt.

The following indicators are not taken into account in the calculation of OIBDA:

  • Expenses related to the long-term management incentive programme, implying accruals in personnel costs line;
  • Expenses related to non-government pension insurance.

 

RUB million

1Q 2021

1Q 2020

change

Operating income

22,672

19,309

17%

Plus amortisation

(31,656)

(26,765)

18%

Plus expenses related to the long-term management incentive programme

(834)

(714)

17%

Plus expenses related to non-government pension insurance

275

294

(6%)

OIBDA

55,437

47,082

18%

OIBDA margin, %

42.0%

38.7%

 


 

 

APPENDIX 2: Statement of Comprehensive Income for Q1 2021

 

 

Three-month period ended
31 March (unaudited)

 

2021

2020

(restated)*

Revenue

131,958

121,613

Operating expenses

 

 

Wages, salaries, other benefits and payroll taxes

(34,170)

(32,190)

Depreciation, amortization and impairment losses

(31,656)

(26,765)

Interconnection charges

(23,627)

(21,429)

Materials, utilities, repairs and maintenance

(9,591)

(8,840)

Gain on disposal of property, plant and equipment and intangible assets

2,545

1,359

Impairment loss of financial assets measured at amortized cost

1,295

(1,163)

Other operating income

5,202

5,657

Other operating expenses

(19,284)

(18,933)

Total operating expenses, net

(109,286)

(102,304)

Operating profit

22,672

19,309

Share of net profit/(loss) of associates and joint ventures

18

166

Finance costs

(8,893)

(8,859)

Other investing and financial gain, net

1,282

646

Foreign exchange (loss)/gain, net

53

(1,543)

Profit before income tax

15,132

9,719

Income tax expense

(3,322)

(2,266)

Profit for the period

11,810

7,453

Other comprehensive income

 

 

Other comprehensive income to be reclassified to profit or loss in subsequent periods

 

 

Exchange differences on translation of foreign operations

12

419

Other comprehensive income for the period, net of tax

12

419

Total comprehensive income for the period

11,822

7,872

Profit attributable to:

 

 

Equity holders of the Group

11,594

7,250

Non-controlling interests

216

203

Total comprehensive income attributable to:

 

 

Equity holders of the Group

11,606

7,669

Non-controlling interests

216

203

Earnings per share attributable to equity holders of the Group -
basic (in roubles)

3.46

2.81

Earnings per share attributable to equity holders of the Group - diluted (in roubles)

3.40

2.75

 

 

 

 

 

 

 

 

 

 

APPENDIX 3: Statement of Cash Flows for Q1 2021

 

 

Three-month period ended

31 March (unaudited)

 

2021

2020

(restated)

Cash flows from operating activities

 

 

Profit before tax

15,132

9,719

Adjustments to reconcile profit before tax to cash generated from operations

 

 

Depreciation, amortization and impairment losses

31,656

26,765

Gain on disposal of property, plant and equipment and intangible assets

(2,545)

(1,359)

Impairment loss of financial assets measured at amortized cost

(1,295)

1,163

Share of net profit/(loss) of associates and joint ventures

(18)

(166)

Finance costs excluding finance costs on employee benefit obligations

8,884

8,848

Other investing and financial gain, net

(1,282)

(646)

Foreign exchange loss/(gain), net

(53)

1,543

Share-based motivation program

788

772

 

 

 

Increase in accounts receivable and contract assets

(8,878)

(9,428)

Increase in employee benefits

193

257

(Increase)/decrease in inventories

(187)

407

Decrease in accounts payable, provisions and accrued expenses

(2,528)

(10,807)

Increase in contract costs, prepayments and other assets

(622)

(1,488)

Increase in other liabilities

523

1,425

Cash generated from operations before income tax and interests paid

39,768

27,005

Interest paid

(8,938)

(8,017)

Income tax refund

42

7

Income tax paid

(2,184)

(2,497)

Net cash from operating activities

28,688

16,498

Cash flows from investing activities

 

 

Purchase of property, plant and equipment and intangible assets

(30,687)

(25,901)

Proceeds from sale of property, plant and equipment, intangible assets and assets held for sale

3,235

1,617

Acquisition of financial assets

(2,891)

(2,347)

Proceeds from disposals of financial assets

4,023

1,109

Interest received

424

199

Subsidy from Government

428

1,229

Dividends received

143

52

Purchase of subsidiaries and business, net of cash acquired

(750)

(113,366)

Acquisition of equity accounted investees

(176)

(25)

Net cash used in investing activities

(26,251)

(137,433)

Cash flows from financing activities

 

 

Issue of share capital

-

66,000

Purchase of treasury shares

(314)

-

Proceeds from bank and corporate loans

110,177

342,307

Repayment of bank and corporate loans

(110,907)

(305,630)

Proceeds from bonds

-

30,000

Repayment of bonds

-

(4)

Repayment of promissory notes

-

(2)

Proceeds from / (repayment of) other non-current financing liabilities

-

(7)

Repayment of lease liabilities

(3,585)

(3,003)

Acquisition of non-controlling interest

-

(19)

Dividends paid to shareholders of the Group

72

-

Dividends paid to non-controlling shareholders of subsidiaries

(830)

(233)

Net cash (used in)/from financing activities

(5,387)

129,409

Effect of exchange rate changes on cash and cash equivalents

32

(206)

Net (decrease)/increase in cash and cash equivalents

(2,918)

8,268

Cash and cash equivalents at the beginning of the period

31,215

19,955

Cash and cash equivalents at the end of the period

28,297

28,223

 

 

 

APPENDIX 4: Statement of Financial Position for Q1 2021

 

31 March

2021

(unaudited)

31 December

2020

(audited)

Assets

 

 

Non-current assets

 

 

Property, plant and equipment

573,428

575,356

Goodwill and other intangible assets

142,275

141,321

Right of use assets

96,642

95,733

Trade and other accounts receivable

6,337

6,317

Investments in associates and joint ventures

10,773

10,896

Other financial assets

784

815

Other non-current assets

13,308

12,975

Deferred tax assets

9,128

8,970

Contract assets

1,054

972

Contract costs

16,190

16,326

Total non-current assets

869,919

869,681

Current assets

 

 

Inventories

10,979

10,792

Contract assets

7,837

6,710

Contract costs

722

674

Trade and other accounts receivable

61,688

50,154

Prepayments

8,136

8,953

Prepaid income tax

1,633

1,377

Other financial assets

11,168

11,482

Other current assets

6,726

7,892

Cash and cash equivalents

28,297

31,215

Asset classified as held for sale

829

831

Total current assets

138,015

130,080

Total assets

1,007,934

999,761

Equity and liabilities

 

 

Equity attributable to equity holders of the Group

 

 

Share capital

95

95

Treasury shares

(14,670)

(14,374)

Retained earnings and other reserves

206,710

194,409

Total equity attributable to equity holders of the Group

192,135

180,130

Non-controlling interests

38,086

37,546

Total equity

230,221

217,676

Non-current liabilities

 

 

Loans and borrowings

352,693

372,406

Lease liabilities

87,965

86,392

Employee benefits

6,863

6,670

Deferred tax liabilities

44,916

41,494

Accounts payable and accrued expenses

1,204

1,580

Contract liabilities

14,986

15,811

Provisions

5,354

5,848

Other non-current financial liabilities

10,926

10,912

Other non-current liabilities

36,572

32,831

Total non-current liabilities

561,479

573,944

Current liabilities

 

 

Loans and borrowings

51,478

32,535

Lease liabilities

17,994

17,399

Accounts payable and accrued expenses

84,158

96,022

Income tax payable

1,196

3,023

Contract liabilities

29,913

34,680

Provisions

10,988

9,413

Other financial liabilities

1,474

1,914

Other current liabilities

19,033

13,155

Total current liabilities

216,234

208,141

Total liabilities

777,713

782,085

Total equity and liabilities

1,007,934

999,761

 

PJSC Rostelecom is the largest integrated digital services and products provider, operating in all segments of the telecommunications market in Russia. The Company serves millions of households, state and private enterprises across the country.

Rostelecom is Russia's undisputed market leader, providing high-speed Internet access and pay-TV. The total number of broadband users stands at over 13.5 mln users, it has more than 10.8 mln pay-TV customers, over 6.1 mln of which are subscribed to Rostelecom's IPTV services. Tele2 Russia, a Rostelecom subsidiary, is a major player in the mobile market with the industry-leading NPS, a customer satisfaction benchmark. The joint mobile subscriber base is over 46.6 mln users.

Rostelecom is a key strategic innovator that provides solutions in the following fields: E-Government, cybersecurity, data-centres and cloud computing, biometry, healthcare, education and housing & utility services.

During the 1q 2021, the Group generated RUB 132.0 bln of revenues, RUB 55.4 bln of OIBDA (42.0% of revenue) and RUB 11.8 bln of net income.

The Group's stable financial position is confirmed by its credit ratings. Rostelecom has been assigned 'BBB-' and 'BB+' international credit ratings by Fitch Ratings and Standard & Poor's respectively, and AA(RU) by ACRA.

 

*   *   *

Certain statements in this press release are forward-looking statements within the meaning of the U.S. federal securities laws and intended to be covered by the safe harbours created thereby.

Those forward-looking statements include, but are not limited to:

  • Assessment of PAO Rostelecom's (the Company) future operating and financial results as well as forecasts of the present value of future cash flows and related factors;
  • The Company's plans to take ownership stakes in other organisations;
  • the Company's anticipated capital expenditures and plans to construct and modernize its network;
  • the Company's expectations as to the growth in demand for its services, plans relating to the expansion of the range of its services and their pricing;
  • the Company's plans with respect to improving its corporate governance practices;
  • the Company's expectations as to its position in the telecommunications market and forecasts on the development of the market segments within which the Company operates;
  • economic outlook and industry trends;
  • the Company's expectations as to the regulation of the Russian telecommunications industry and assessment of impact of regulatory initiatives on the Company's activity;
  • other statements regarding matters that are not historical facts.

 

Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include:

  • risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions;
  • risks relating to Russian legislation, regulation and taxation, including laws, regulations, decrees and decisions governing the Russian telecommunications industry, securities industry as well as currency and exchange controls relating to Russian entities and their official interpretation by regulatory bodies;
  • risks relating to the Company, including the achievement of the anticipated results, levels of profitability and growth, ability to create and meet demand for the Company's services including their promotions, and the ability of the Company to remain competitive in a liberalized telecommunications market;
  • technological risks associated with the functioning and development of the telecommunications infrastructure, technological innovations as well as the convergence of technologies;
  • other risks and uncertainties. For a more detailed discussion of these and other factors, see the Company's Annual Report and the Company's other public filings.

Many of these factors are beyond the Company's ability to control or predict. Given these and other uncertainties, readers are cautioned not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements (which are made as of the date hereof) to reflect events or circumstances upon the annual report publication or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.


[1] Here and below, please refer to Attachment 1 of this statement for a full definition of OIBDA.

[2] Here and below Free Cash Flow (FCF) is calculated as net cash from operating activity minus CAPEX, plus proceeds from selling fixed assets and intangible assets, plus interest received, plus subsidy from government.

[3] International financial reporting standards.

[4] Here and below, capital expenditure ("CAPEX") comprises cash spent on fixed assets and intangible assets.

[5] Here and below, Net Debt is calculated as total debt less cash, cash equivalents and short-term investments (other financial assets).

[6] Average revenue per user

[7] Blended ARPU includes revenue from one user subscribed to a number of services simultaneously, including broadband, IPTV and digital cable TV

[8] Operator to Operator

[9] OIBDA for the last 12 months



ISIN: US7785291078
Category Code: QRF
TIDM: RKMD
LEI Code: 2534001D752JPNM0H170
Sequence No.: 104741
EQS News ID: 1196135

 
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