Company turnover for the year. More work for the same money

03/18/2015, Wed, 07:03, Moscow time, Text: Igor Korolev

At the end of 2014, MTS remains the leader in Russia in terms of revenue from cellular and fixed communications, as well as the number of cellular subscribers. But in terms of revenue from mobile data transmission, Megafon remains the leader.

MTS was the last of the "big three" operators to report on the results of 2014. The company's revenue in all countries amounted to i 410.8 billion, an increase of 3%. OIBDA (earnings before taxes, depreciation and interest on loans) remained virtually unchanged and amounted to i 175.5 billion. Profitability on this indicator amounted to 42.7%.

The net profit of MTS for the year fell by 35% to i 51.8 billion. According to the results of the IV quarter of 2014, the net profit of MTS, in comparison with the same period in 2013, fell even more - by 92%, that is, almost twice . This is due to “paper” losses in the amount of i 8.9 billion from the revaluation of debt denominated in foreign currency, as well as the creation of a reserve in the amount of i 5.1 billion due to the funds of the Ukrainian branch of MTS, “hanging” in the local Delta Bank ".

Revenue for the fourth quarter of 2014 increased by 2.3% compared to the same period in 2013 and amounted to i 107.2 billion. OIBDA in the fourth quarter fell by 5.3% over the year to i 42.6 billion The performance of the MTS group was negatively affected by the situation in Ukraine and the decline in roaming revenues.

The group's capital expenditures for 2014 amounted to i 92.6 billion, an increase of 12%. The increase in capital expenditures is due to the fact that in Q3 2014 MTS made advance payments to equipment suppliers in order to mitigate the negative effect of the depreciation of the ruble. The total number of cellular subscribers of the company decreased by 1% to 104 million.

In Russia, the company's revenue for 2014 amounted to i 375 billion, an increase of 5.6%. including revenue from mobile services increased by 6.8% and reached i 291 billion. Revenue from mobile data transmission for the year increased by 36%, reaching i 64.4 billion.

Revenue from fixed-line services fell by 1.2% to i 62.5 billion. The decline is due to the fact that at the end of 2013, MTS-owned operator MGTS received significant payments under a contract with the Ministry of Health.

Financial and operational performance of the Big Three operators in 2014

Sources: MTS, Vimpelcom, MegaFon, CNews Analytics

OIBDA increased by 4.5% over the year to 164.8 billion. Profitability for this indicator amounted to 44%. According to the results of the IV quarter, MTS's revenue amounted to i 98 billion, having increased by 4% compared to the same period in 2013. OIBDA for the fourth quarter increased slightly compared to 2013 and amounted to i 41.3 billion.

The number of MTS mobile subscribers in Russia at the end of the year amounted to 74.6 million. The churn rate increased by 1.2 percentage points over the year and amounted to 11%. Average revenue per subscriber (ARPU) fell by 1.2% over the year and amounted to i 338, average voice traffic per subscriber (MOU) increased by 4.2% over the year and reached 393 minutes.

Compared to other mobile operators in Russia, MTS remains the leader in terms of revenue and OIBDA. Next comes Megafon, in third place is VimpelCom ( trademark Beeline, part of the Vimpelcom group). A similar ratio in the top three and in terms of revenue from the cellular business. In terms of profitability, MTS and MegaFon are approximately on the same level - 44%, while VimpelCom is inferior to them with an indicator of 39.5%.

But in terms of revenue from mobile data transmission, Megafon remains the leader, while MTS is in second place. However, according to the results of the 3rd and 4th quarters of 2014, MTS is the leader in this indicator. For example, in the last quarter of last year, MTS earned i 17.6 billion from this service, MegaFon - i 17.2 billion, Vimpelcom - i 10.5 billion. Thus, if the dynamics does not change, then next year MTS will become the leader in this indicator.

MTS remained the leader in terms of the number of cellular subscribers in Russia. The operator managed to keep the first place even despite the fact that, starting from the III quarter of 2014, MTS switched to the policy of accounting for active subscribers who have made at least one active action in the last three months (MegaFon and VimpelCom have long been reporting in a similar way ).

MTS also continues to be the leader in fixed-line revenues. VimpelCom is in second place with i 52.6 billion, Megafon is in third place with i 22.2 billion.

Over the past few years, MTS Group has grown from the leader of one regional market in Moscow into the largest transnational operator providing services to 104.1 million subscribers of the mobile sector in different regions and countries (including subscribers of JLLC Mobile TeleSystems in the Republic of Belarus, the financial results of which are not consolidated in the financial statements of MTS OJSC according to US GAAP standards).

Below are the data of the consolidated financial statements without taking into account the financial performance of the MTS Group in the Republic of Belarus 1 .

1 Information on the consolidated financial and operating results of the MTS Group for the 4th quarter of 2014 and 2014: http://www.company.mts.ru/comp/ir/report/2015-03-17-4403990/

Revenue for MTS Group

Key financial indicators in 2014 (million rubles)

1 Excluding revenue of RUB 6.7 billion. (3.6 billion rubles in the III quarter of 2014 and 3.1 billion rubles in the IV quarter of 2014) from the resumption of operations in Uzbekistan and the provision for impairment of investments in Delta Bank PJSC (Ukraine) in the amount of 5.1 billion rub. in the fourth quarter of 2014.

Analysis of the main performance indicators of the MTS Group for 2014 in comparison with the indicators of 2013

Consolidated revenue of MTS Group for 2014 increased by 12.3 billion rubles. or 3.1% to 410.8 billion rubles. The main reason for the growth in consolidated revenue was a significant increase in the use of VAS services by the Group's subscribers (by RUB 14.4 billion), due to the growth of data transmission as a result of an active policy of promoting VAS services, an increase in penetration mobile internet and smartphone use, as well as the expansion of 3G and LTE networks and the continuous improvement of the quality of VAS services. The growth of consolidated revenue was also supported by the growth in revenue from traffic termination by RUB 5.6 billion. and from the sale of phones and accessories for 2.4 billion rubles. The increase in revenue from traffic termination was due to the depreciation of the Russian ruble against the US dollar and Euro by approximately 21% (based on average annual rates) and an increase in traffic volumes from our competitors. The reason for the increase in sales of phones and accessories by 2.4 billion rubles. continued expansion of the Group's retail network. In 2014, we also see a decrease in revenue from voice services by RUB 7.3 billion and a decrease in revenue from subscription fees by RUB 3.3 billion due to the transition of our subscribers to more affordable contract tariff plans. The subscriber base of the mobile business grew from 94.7 million subscribers in December 2013 to 98.5 million in December 2014.

The adjusted indicator of the consolidated OIBDA of the MTS Group in 2014 amounted to 175.5 billion rubles, which is 0.3% higher than the previous year. Adjusted OIBDA does not include revenue of RUB 6.7 billion. from the resumption of operations in Uzbekistan and the cost of creating a reserve for investments in the amount of 5.1 billion rubles. in PJSC "Delta Bank" (Ukraine). Adjusted OIBDA margin in 2014 decreased from 43.9% a year earlier to 42.7% mainly due to inflationary pressure and the effect of the devaluation of the ruble and hryvnia on expenses denominated in foreign currency, primarily related to international roaming, and also increase sales of low-margin phones.

Adjusted consolidated operating income for 2014 remained relatively stable, down 1% year-on-year and amounted to RUB 100.8 billion. Adjusted operating profit does not include revenue of RUB 6.7 billion. from the resumption of operations in Uzbekistan and the cost of creating a reserve for investments in the amount of 5.1 billion rubles. in PJSC "Delta Bank" (Ukraine). At the same time, the adjusted operating profit margin also decreased from 25.5% in 2013 to 24.5% in 2014.

Consolidated net profit from continuing operations decreased in 2014 by 31.9% to RUB 51.8 billion due to non-cash foreign exchange losses, provisioning of RUB 5.1 billion. for investments in Delta Bank PJSC and the impairment of the investment in MTS Bank in the amount of RUB 3.2 billion. Also, the reduction in net profit from continuing operations in 2014 compared to 2013 was affected by the recognition in 2013 of one-time income in connection with the settlement of the dispute against Bitel in the amount of RUB 12.1 billion. The net profit margin from continuing operations in the reporting period also decreased to 12.6% compared to 19.1% in 2013.

The consolidated net profit of MTS Group in 2014 decreased by 35.1% to RUB 51.8 billion. The decrease in net profit in 2014 is due, in addition to the factors listed above, the recognition in 2013 of income from the deconsolidation of subsidiaries of the MTS Group in Uzbekistan in the amount of 3.7 billion rubles. The consolidated net income margin decreased to 12.6% compared to 20.0% in 2013.

Cash flow from continuing operations in 2014 remained virtually unchanged compared to 2013 and amounted to RUB 159.5 billion. Free cash flow from continuing operations in 2014 decreased over the year by 22.6% to RUB 57.0 billion. due to an increase in capital expenditures due to prepayments to vendors for the supply of equipment in order to level out fluctuations in exchange rates, as well as the purchase of assets in Russian Federation.

Revenue structure (million rubles)

Adjusted OIBDA (mln RUB)

Adjusted OIBDA Margin

Russian companies have recently reported for 2014! A delay of almost half a year. But understanding current trends and the state of companies is essential. Of the 50 largest public companies from the non-financial sector of Russia, 18 companies showed a loss. For comparison: in 2013 there were 11 unprofitable companies, in 2012 7 companies, in 2011 only 2 companies, and in the crisis 2009 only 12 companies. Those. 2014 was a record year in terms of the number of unprofitable companies, 31 companies worsened their net profit compared to 2013.

Below and in the future, all indicators are in billion rubles per year.

You may have noticed anomalous profit growth at Surgutneftegaz, with growth out of the general trend, and the profit itself is almost equal to revenue. How so? This is entirely due to the revaluation of foreign currency deposits. The exchange rate factor provided more than 800 billion rubles of profit for Surgut.

On the chart below and beyond:
upper left - indicators for the 50 largest companies;
upper right - the same, but without taking into account oil and gas;
lower left - indicators for companies that submitted annual reports from at least 2005 to 2014;
lower right - the same, but without oil and gas.

Total net income for the companies listed above in the table is 1.7 trillion rubles. per year - this is comparable to the level of 2008 and 2009, but in nominal terms. Adjusted for inflation, earnings are more than a third lower than in 2009.

The largest companies without oil and gas have been at a loss for the second year, and if you choose companies that provide data from 2005, then the total profit falls lower than in 2005! It's in par! In real terms, profit is more than twice worse than 10 years ago (excluding oil and gas).

Such a catastrophic situation is caused both by the dynamics of the ruble exchange rate and a serious increase in costs, but to a greater extent this is caused by large-scale business reorganization processes, the write-off of unprofitable assets and divisions, the general reformatting of the business, getting rid of non-core and unpromising assets, erasing the ends, so to speak.
In terms of net profit, 2014 for Gazprom and Lukoil is much worse than the crisis year 2009, what can we say about Mechel, Severstal and others?

Revenue. In fact, the entire increase in nominal revenue for last years- this is a merit entirely oil and gas sector. With the exception of it, we get stagnation for the past 4 years (seen on the right charts)

The devaluation of the ruble did not help all metallurgists. Severstal and Mechel managed to reduce even the nominal ruble revenue for 2014.

Operating profit is somewhat better. If for all companies the trend is negative and the profit is somewhere around 2008, although in real terms, of course, lower. But without oil and gas, profits grew a little. The most significant contribution was made by GMK Norilsk Nickel (78 billion rubles) and NLMK (41 billion).

Cache increased by 1.5 trillion (up to 4.5 trillion) due to revaluation (by 90%). It takes into account only short-term (up to a year) financial investments companies in the money market.

The table shows who specifically has the largest increase. The leaders are Gazprom, Surgut, Lukoil, Transneft and MMC Norilsk Nickel.

But, as you can guess, duty also increased (also due to exchange rate differences). An increase in debt by 4 trillion to almost 14 trillion (both short-term and long-term debt on loans and bonds are taken into account). 60% of the total debt is concentrated in oil and gas. Here's exactly how:

Rosneft has the largest debt (3.3 trillion). The increase in debt is associated with the purchase of TNK-BP 2 years ago. Decrease in debt was noted at Tatneft, Rostelecom, Alrosa.

Capital investment are declining, both with and without oil and gas. Companies spend about 4 trillion a year on capex, 75% falls on oil and gas. If we evaluate investments taking into account inflation, then current investments are at the level of 2009.

Curiously, despite the impressive production capacity of AvtoVAZ, Avtovaz's investment is a hundred times less than that of Gazprom!

Dividends record, which is at odds with profit trends. However, decisions by the boards of directors on the accrual of dividends were made before the crisis worsened (in November 2014), so this played a role. Approximately half of the divas are oil and gas. Gazprom has the biggest divas, which is logical, but it is interesting that the MMC is in second place, even ahead of Rosneft and well ahead of Lukoil.

Data sourced from Thomson Reuters Datastream. Compilation, processing and rendering by me.

In terms of formal and objective indicators, 2014 was the worst since 2009 and even surpasses 2009 in many respects, such as net profit. The situation is very difficult, to put it mildly. The crisis is milder than in 2009 for two reasons: mental readiness for the worst, expectations of a crisis for 5 years already + debt relief on short debts, reduced margins, replacement of short debts with long ones. The situation is exacerbated by the need to repay external debt with limited refinancing mechanisms. But overall, 2014 was a disaster, and 2015 looks to be even worse.

Metallurgical company Mechel's revenue for 2014 under US GAAP decreased by 25% to $6.406 billion, according to the company's final financial statements for 2014 published on Tuesday.

At the same time, Mechel's EBITDA (earnings before interest and taxes and accrued depreciation) in 2014 decreased by 3%, to $709 million, and the net loss was recorded at $4.3 billion, which is 48% more than a year earlier. The statements indicate that Mechel lost $1.5 billion on depreciation due to the sale of assets, and the company missed $2.4 billion due to the depreciation of the Russian currency.

However, the devaluation of the ruble reduced Mechel's net debt in dollar terms by 23%, from $8.76 billion to $6.77 billion, and led to an increase in EBITDA margin from 8.6% in 2013 to 11.1% in 2014 year.

“In 2014, all Mechel enterprises showed operating profit and kept the company's EBITDA at the level of the previous year, despite the fact that the average annual prices in foreign markets for metallurgical coal and iron ore in 2014 decreased by 20 and 30%, respectively, compared with 2013,” commented on the results of Mechel CEO company Oleg Korzhov.

“The position of the company in 2014 improved slightly, which was largely facilitated by the devaluation of the ruble. Nevertheless, these improvements are clearly not enough to radically improve the situation with the company's debt burden, ”Andrey Tretelnikov, an analyst at RMG Securities, told Gazeta.Ru.

According to him, Mechel's position may change in better side only in the event of a sudden rise in prices for metals and coking coal, but so far the analyst himself and most of his colleagues consider such a development of events to be extremely unlikely.

So far, the company has been able to increase its interest payments by 7% to $793mn, but still doesn't pay creditors on a regular basis and is having trouble restructuring its debts. Lenders represented by Gazprombank, Sberbank and VTB insist on converting debt into shares, but Igor Zyuzin, who owns 67.4% of the company's shares, and his relatives oppose such a scheme.

Negotiations on debt restructuring are most successful with Gazprombank. Igor Zyuzin's company managed to reach a preliminary agreement with the bank on debt restructuring, Oleg Korzhov said during a conference call on Tuesday.

“We agreed with Gazprombank at the management level on the general indicative terms and schedule of debt restructuring. I believe that we are very close to signing an agreement with Gazprombank,” said the CEO of Mechel.

A preliminary agreement has also been reached with VTB. According to Korzhov, the company managed to coordinate with the bank at the level working group general principles and approaches to Mechel's debt restructuring.

Only negotiations with Sberbank remain problematic. In mid-April, the head of Sberbank, German Gref, even threatened the company to sue for bankruptcy. Earlier, to resolve the situation with Sberbank, Zyuzin's company used the services of the Rothschild Group. However, a proposal prepared by overseas financial consultants to convert debt into shares of Mechel's subsidiaries was criticized by the head of Sberbank. “The offer is very vague. It indicates that conversion is possible, and does not say, under any conditions, in any shares. We once said that we are not against such an approach, but conversion is possible only into control either in the parent company or in key profitable subsidiaries,” Gref said in early April.

According to Tretelnikov, Mechel has been deliberately trying to delay the issue of debt restructuring for quite a long time. However last news testify that Zyuzin was nevertheless forced to make concessions.

At the same time, the state included Mechel in the list of backbone enterprises and acted as a kind of intermediary between the company and creditor banks. However, the government is more concerned not with the fate of the main shareholders, but with the uninterrupted operation of the main enterprises and social peace in single-industry towns, the expert sums up.

Release

OAO Gazprom today presented its audited consolidated financial statements for 2014 prepared in accordance with international standards financial reporting.

The table below shows the consolidated statement of comprehensive income under IFRS for 2014 and 2013. All amounts in the table are presented in millions of Russian rubles.

Profit for the period attributable to the shareholders of OAO Gazprom in the reporting period decreased by RUB 980,257 million, or 86%, and amounted to RUB 159,004 million, primarily due to the following factors:

• an increase in foreign exchange expenses due to the depreciation of the ruble against the US dollar and the euro. The net foreign exchange loss as part of financial income and expenses in the aggregate increased by RUB 925,757 million. in 2014 compared to 2013. The increase in foreign exchange expenses is due to the revaluation of liabilities on loans and borrowings denominated in foreign currency.
• an increase in expenses for the creation of reserves for impairment of assets and other reserves by 245,510 million rubles. This is due to the increase in reserves accounts receivable NJSC Naftogaz of Ukraine in the amount of RUB 34,068 million, JSC Moldovagaz in the amount of RUB 5,948 million, as well as with the accrual of a reserve for future payments in respect of financial guarantees in the amount of RUB 47,407 million. In addition, in the reporting period, expenses were recognized for the creation of provisions for the impairment of property, plant and equipment and goodwill in relation to the assets of the oil, refining and electric power segments of the Group's activities. The amount of such expenses in the reporting period amounted to 124,002 million rubles.

Profit from sales decreased by RUB 276,785 million, or 17%.

In 2014, sales revenue (excluding VAT, excise and customs duties) increased by RUB 339,846 million, or 6%, compared to 2013, and amounted to RUB 5,589,811 million. Below is more detailed information in relation to the main indicators characterizing the structure of sales revenue for 2014 and 2013.

In 2014, net revenue from gas sales increased by RUB 13,562 million. compared to the same period in 2013, and amounted to 2,985,385 million rubles.

In 2014, net revenue from gas sales to Europe and other countries increased by RUB 69,386 million, or 4%, compared to the same period in 2013, and amounted to RUB 1,752,147 million. This was mainly due to an 11% increase in average settlement prices denominated in rubles (including customs duties), which was partially offset by a decrease in volume sales of gas by 9%, or 14.9 billion cubic meters. m.

In 2014, net revenue from gas sales to the countries of the former Soviet Union decreased by RUB 8,598 million, or 2%, compared to the same period in 2013, and amounted to RUB 411,722 million. The change was driven by a 19% drop in natural gas sales, or 11.3 billion cubic meters. m, which was partially offset by an increase in average settlement prices expressed in rubles (including customs duties) by 19%.

In 2014, net revenue from the sale of gas in the Russian Federation increased by RUB 26,218 million, or 3%, compared to the same period in 2013, and amounted to RUB 820,567 million. This is mainly due to the increase average price gas sales in the domestic market by 8%, which was partially offset by a decrease in gas sales in physical terms by 4%, or by 10.9 billion cubic meters. m.

In 2014, net proceeds from the sale of oil and gas products increased by RUB 267,501 million, or 20%, compared to the same period in 2013, and amounted to RUB 1,619,214 million. The increase in revenue from the sale of refined oil and gas products is due to rising prices, as well as an increase in sales volumes of the Gazprom Neft Group to consumers located in the Russian Federation, Europe and other countries.

In 2014, net proceeds from the sale of electricity and heat increased by RUB 51,362 million, or 14%, compared to the same period in 2013, and amounted to RUB 426,951 million. The increase is mainly due to the inclusion in the consolidated financial statements of JSC MIPC indicators since September 2013.

In 2014, operating expenses, compared to the same period in 2013, increased by 342,761 million rubles, or 10%, and amounted to 3,943,669 million rubles.

Net debt (defined as short-term borrowings and current portion of long-term borrowing liabilities, short-term notes payable, long-term borrowings, long-term notes payable less Money and cash equivalents, as well as cash and cash equivalents restricted for use in accordance with the terms of certain loans and other contractual obligations) increased by RUB 537,835 million, or 48%, from RUB 1,112,798 million. as of December 31, 2013 to RUB 1,650,633 mln. as of December 31, 2014. The reasons for the increase in the value of this indicator are related to the growth of the US dollar and euro against the Russian ruble, which was partially offset by an increase in cash and cash equivalents.

More details on the data of the consolidated financial statements under IFRS for 2014 can be found.