Head of Analytical Research at Iva Partners Investment
Posted: Sun Jan 19, 2025 8:30 am
PJSC Mobile TeleSystems (MTS) published its financial results for the third quarter of 2024. The company's revenue amounted to RUB 180.4 billion, of which RUB 119.8 billion was income from communication services. This is 15.3% more than for the same period in 2023 - RUB 156.4 billion.
Group Dmitry Aleksandrov noted revenue growth in all areas of business: "Revenue growth is very favorable, despite the fact that the rates are relatively low, given inflation and rates. Nevertheless, it is important to note growth in all areas of development, especially in the advertising segment. MTS profit under indonesia telegram pressure from rising rates on the money and debt markets, given the company's debt level, is a significant burden."
Freedom Finance Global Leading Analyst Natalia Milchakova explained how MTS is increasing its revenue: "As one of the largest Russian telecom operators, MTS has good competitive advantages in the telecom services market, which ensures the corporation's growth in its client base, and, in addition, the group's business is diversified, so it has the opportunity to increase revenue also due to the ecosystem."
MTS's net profit for Q3 2024 fell by 88.8% compared to 2023 - RUB 1 billion in 2024 versus RUB 9 billion in 2023. As stated in the MTS report, pressure on net profit was exerted by interest expenses and revaluation of financial instruments and derivatives.
"Net profit was expectedly under pressure from high interest expenses and revaluation of financial instruments. The company's statement also states that, given the tightening of regulatory and monetary policies, a strategy adjustment is required. An investor day may be held in the coming months, during which the management's vision and updated strategic plans will be presented. Our current recommendation for MTS shares is "buy" with a target price of 354 rubles per share," says Artem Mikhailin, an analyst at the investment company Veles Capital.
FG Finam analyst Leonid Delitsyn explained the reasons for the decrease in net profit: "The reasons for the decline in profit are common to all telecoms. Operators have a large debt, and accordingly, large interest expenses for servicing the debt. In the context of the growth of the base rate, refinancing the debt is becoming more difficult. In addition, it was necessary to develop new areas that provide clients. And finally, it is necessary to increase the salaries of employees."
The OIBDA indicator in Q3 2024 amounted to RUB 61.5 billion, which is 4.5% more than in Q3 2023, - RUB 58.8 billion. MTS net debt at the end of Q3 2024 increased to RUB 460 billion. The stable dynamics of the indicator is supported by income from communication services and fintech.
Leonid Delitsyn shared his forecast for MTS's financial performance by the end of 2024: "By the end of the year, I expect MTS's revenue to be more than 640 billion rubles, and net profit to be about 62 billion rubles."
"We believe that by the end of 2024, MTS's revenue will grow to RUB 695 billion. OIBDA growth will be small, within 5-8%. The company will most likely pay dividends for 2024 in accordance with its dividend policy, since its free cash flows for the first nine months of 2024 are positive and will most likely remain positive for the entire 2024," Natalya Milchakova is confident.
Group Dmitry Aleksandrov noted revenue growth in all areas of business: "Revenue growth is very favorable, despite the fact that the rates are relatively low, given inflation and rates. Nevertheless, it is important to note growth in all areas of development, especially in the advertising segment. MTS profit under indonesia telegram pressure from rising rates on the money and debt markets, given the company's debt level, is a significant burden."
Freedom Finance Global Leading Analyst Natalia Milchakova explained how MTS is increasing its revenue: "As one of the largest Russian telecom operators, MTS has good competitive advantages in the telecom services market, which ensures the corporation's growth in its client base, and, in addition, the group's business is diversified, so it has the opportunity to increase revenue also due to the ecosystem."
MTS's net profit for Q3 2024 fell by 88.8% compared to 2023 - RUB 1 billion in 2024 versus RUB 9 billion in 2023. As stated in the MTS report, pressure on net profit was exerted by interest expenses and revaluation of financial instruments and derivatives.
"Net profit was expectedly under pressure from high interest expenses and revaluation of financial instruments. The company's statement also states that, given the tightening of regulatory and monetary policies, a strategy adjustment is required. An investor day may be held in the coming months, during which the management's vision and updated strategic plans will be presented. Our current recommendation for MTS shares is "buy" with a target price of 354 rubles per share," says Artem Mikhailin, an analyst at the investment company Veles Capital.
FG Finam analyst Leonid Delitsyn explained the reasons for the decrease in net profit: "The reasons for the decline in profit are common to all telecoms. Operators have a large debt, and accordingly, large interest expenses for servicing the debt. In the context of the growth of the base rate, refinancing the debt is becoming more difficult. In addition, it was necessary to develop new areas that provide clients. And finally, it is necessary to increase the salaries of employees."
The OIBDA indicator in Q3 2024 amounted to RUB 61.5 billion, which is 4.5% more than in Q3 2023, - RUB 58.8 billion. MTS net debt at the end of Q3 2024 increased to RUB 460 billion. The stable dynamics of the indicator is supported by income from communication services and fintech.
Leonid Delitsyn shared his forecast for MTS's financial performance by the end of 2024: "By the end of the year, I expect MTS's revenue to be more than 640 billion rubles, and net profit to be about 62 billion rubles."
"We believe that by the end of 2024, MTS's revenue will grow to RUB 695 billion. OIBDA growth will be small, within 5-8%. The company will most likely pay dividends for 2024 in accordance with its dividend policy, since its free cash flows for the first nine months of 2024 are positive and will most likely remain positive for the entire 2024," Natalya Milchakova is confident.