MTS bosses bullish despite drop in net income

Mobile TeleSystems (MTS) president and CEO Andrei Dubovskov declared the opening quarter of 2015 a success despite the operator recording a drop in net income relative to Q1 2014.

Dubovskov noted that the operator succeeded in growing group revenues during the first three months of 2015 despite a "generally negative macroeconomic environment" and that the company "maintained strong profitability" during the quarter.

The president and CEO made the comments as MTS revealed it grew total revenue by 2.7 per cent year-on-year to RUB100 billion (€1.7 billion/$1.9 billion). A breakdown reveals MTS grew revenues in all of its markets except Armenia during the quarter.

However, the operator failed to translate the revenue growth into higher net income, which fell by 14.3 per cent year-on-year to RUB10.8 billion in the recent quarter. While the figure is down on the comparable quarter of 2014, it is up on the RUB1.3 billion profit MTS recorded in the fourth quarter of 2014.

MTS VP for finance and investments Alexey Kornya explained that net income was impacted by a drop in pre-tax operating income and a RUB3.5 billion forex loss during the quarter.

While the operator's net income was down year-on-year, it came in ahead of the RUB10.5 billion analysts had predicted, Reuters reported. MTS' group revenue during the period was also higher than analysts' forecasts, the news agency added.

Dubovskov noted that MTS performed well in Russia during the opening quarter, despite ongoing macroeconomic uncertainty. The operator's domestic business benefitted from growing smartphone penetration and higher data usage during the opening quarter of 2015, Dubovskov explained. Revenue from sales of handsets and accessories increased 1.2 per cent year-on-year, and mobile revenues accounted for RUB70.5 billion out of Russia's RUB90.4 billion total during the quarter.

"[T]he Russian telecoms sector continues to present growth opportunities--but only operators with the right business model will be able to realise them," Dubovskov stated.

For more:
- see MTS' earnings statement [PDF]
- view this Reuters report

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