08/24/2021 | Press release | Distributed by Public on 08/24/2021 05:40
Moscow, Russia - March 9, 2020 - Rostelecom PJSC (MOEX: RTKM, RTKMP; OTCQX: ROSYY), the largest digital service provider in Russia, today announces its consolidated financial results for the fourth quarter and the full year of 2020 prepared in accordance with IFRS[2].
In accordance with the accounting policy of the Group, the acquisition of Tele2 Russia has been recognized as a business combination under common control. According to this method the merger of businesses arising from a transfer of entity stakes under common control of the Group's shareholders, is presented as if the merger took place in the earliest period of the statements, or, if later, effective from the date that common control was put into effect; for this purpose comparatives are revised. Rostelecom's consolidated financial statements for 2019 have therefore been revised to incorporate Tele2 Russia's performance as if the acquisition had been completed on 1 January 2019. Besides, the Group made a number of revisions to its 2019 statements following the IFRS Interpretations Committee decision on lease terms of contracts with renewal and termination options. Please find more details on the revisions in Note 6 of the consolidated financial statements for 2020. |
RUB million |
4Q 2020 |
4Q 2019 |
change, y-o-y |
Revenue |
163,009 |
132,896 |
23% |
OIBDA |
44,491 |
40,627 |
10% |
OIBDA margin % |
27.3% |
30.6% |
- |
Operating Income |
8,374 |
9,792 |
(14%) |
Operating margin % |
5.1% |
7.4% |
- |
Net Income |
(2,083) |
(790) |
164% |
% of revenue |
(1.3%) |
(0.6%) |
- |
Capital Expenditure excl. state programs |
36,162 |
42,863 |
(16%) |
% of revenue |
22.2% |
32.3% |
- |
Net debt |
362,244 |
333,007 |
9% |
Net debt/ annualised OIBDA |
1.9 |
2.0 |
- |
FCF |
17,925 |
15,697 |
2,228 |
RUB million |
2020 |
2019 |
change, y-o-y |
Revenue |
546,889 |
475,752 |
15% |
OIBDA |
194,050 |
170,703 |
14% |
OIBDA margin % |
35.5% |
35.9% |
- |
Operating Income |
68,965 |
61,280 |
13% |
Operating margin % |
12.6% |
12.9% |
- |
Net Income |
25,348 |
21,878 |
16% |
% of revenue |
4.6% |
4.6% |
- |
Capital Expenditure excl. state programs |
107,138 |
105,657 |
1% |
% of revenue |
19.6% |
22.2% |
- |
Net debt |
362,244 |
333,007 |
9% |
Net debt/ annualised OIBDA |
1.9 |
2.0 |
- |
FCF |
22,659 |
30,253 |
(7,594) |
'Rostelecom evidenced its resilience to major global challenges in 2020. Despite the constantly changing backdrop, we remained nimble enough to take steps to maintain our leading position in the market and achieve excellent financial results. Our revenue grew by 15%, operating profit before depreciation increased by 14%, and we grew net profit by 16%. By consolidating 100% of Tele2 Russia, Rostelecom became the largest integrated digital provider in the country, with revenues of more than half a trillion roubles generated from a diverse range of cutting-edge services.
In April 2021, we plan to announce our renewed strategy outlining high-level strategic focus on digital business that will better position our company for changing markets and align with customer needs. Our focus will continue to be on new points of growth and expansion of Rostelecom's fast-growing portfolio.
At the end of 2020, we closed a landmark deal with VTB Bank, who came on board as a strategic partner to help support the development of our data centres and cloud services. Not only did we secure the financial resources and a reliable joint partner, but we also demonstrated a new significantly enhanced market value and potential that the business segment carries, and there is more to come from other digital divisions.
We expect that the IPO of the cloud segment, as well as further possible placements involving other promising digital clusters, will deliver significant shareholder value due to the higher multiples applicable to growing digital companies unlocking the fair value presented by Rostelecom as a group.'
'The strong financial results for 2020 evidence how Rostelecom has become truly digital. Over a long period of time, Rostelecom has systematically expanded its range of advanced digital services, enabling the company to embark on a trajectory of sustainable double-digit growth, that exceeds rates of growth achieved by other market players.
We have invested a lot in enhancing our data centers and cloud services, cybersecurity solutions, regional digital projects, e-government, video surveillance and analytics, and smart services for households and businesses. The results of these efforts are coming into fruition: the digital segment is growing at an impressive rate, providing the company with tens of billions of roubles of additional revenue, with areas such as cybersecurity are multiplying in size every year.
Despite our achievements, we are never complacent and understand that we must continue to look at new areas of growth to preserve our leadership in the space. To that end, we continue to expand our digital offering to maintain exponential growth dynamics. We have done so by acquiring developers of proprietary software products in the field of housing and communal services (Forkam and Fastek companies), a leading developer in the field of digitalization of waste management and ecology, we have formed a partnership with Doctis to create telemedicine services and we have a joint venture with YADRO to expand the line of PaaS solutions as well as a number of similar partnerships and activities that will cement our leading position in the space.
Coupled with the phenomenal success of Tele2 Russia, which is the only player with double-digit growth in an already mature market and the fastest growing mobile operator in the world, our achievements in transforming Rostelecom into a digital giant enables us to be ambitious in shaping our strategic plans for digital services for years to come.'
Number of subscribers (million): |
4Q 2020 |
4Q 2019 |
change, y-o-y |
3Q 2020 |
change, y-o-y |
Internet access |
13.5 |
13.2 |
2% |
13.4 |
1% |
B2C: Broadband |
12.4 |
12.2 |
2% |
12.3 |
1% |
B2B: Broadband + VPN |
1.1 |
1.1 |
5% |
1.1 |
2% |
Pay TV |
10.8 |
10.4 |
4% |
10.7 |
1% |
Incl. IPTV |
6.1 |
5.6 |
9% |
5.9 |
3% |
Hosted PBX |
0.160 |
0.097 |
65% |
0.147 |
9% |
Local telephony services |
14.0 |
15.6 |
(10%) |
14.5 |
(3%) |
ARPU[6] (RUB): |
4Q 2020 |
4Q 2019 |
change, y-o-y |
3Q 2020 |
change, y-o-y |
Internet access |
|||||
B2C: Broadband |
395 |
402 |
(2%) |
390 |
1% |
B2B: Broadband + VPN |
3,372 |
3,455 |
(2%) |
3,231 |
4% |
Pay TV |
250 |
255 |
(2%) |
245 |
2% |
Incl. IPTV |
302 |
320 |
(5%) |
298 |
2% |
Hosted PBX |
1,186 |
1,238 |
(4%) |
1,119 |
6% |
Blended ARPU[7] |
546 |
553 |
(1%) |
537 |
2% |
Mobile business
4Q 2020 |
4Q 2019 |
change, y-o-y |
3Q 2020 |
change, y-o-y |
|
Data Traffic, incl. MVNO,Pb |
1,442 |
977 |
48% |
1,351 |
7% |
Churn, % |
(8.1%) |
(9.5%) |
(1.5 p. p.) |
(7.3%) |
0.8 p. p. |
Growth of active mobile Internet users, % |
20.0% |
39.6% |
(19.6 p. p.) |
25.5% |
(5.5 p. p.) |
Subscriber base at the end of period |
46.6 |
46.0 |
1.5% |
- |
- |
Press-release on 4q 2020 financial results
[1] Here and below, please refer to Attachment 1 of this statement for a full definition of OIBDA. Note that the company changed the methodology for calculating OIBDA changed in 3q 2018 having excluded expenses related to non-government pension insurance. Historical OIBDA numbers for 2018 and relevant periods of 2017 were recalculated in line with the renewed methodology.
[2] International financial reporting standards.
[3] Here and below, capital expenditure ('CAPEX') comprises cash spent on fixed assets and intangible assets.
[4] 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.
[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