Mobile operator MegaFon has presented its financial results under IFRS for the third quarter of 2020. The company is increasing its bottom line and reducing its debt burden despite the continued impact of the pandemic.
MegaFon’s net profit for the specified period increased by 308.7 percent to RUB 13.1 billion due to increased operating efficiency, reduced financing costs due to a decrease in debt burden and active management of the loan portfolio, as well as due to profits from hedging foreign exchange obligations.
The company’s net debt decreased over the quarter by 16.3 billion rubles, to 311.2 billion rubles. The revenue decreased by 3.9 percent and amounted to 86.5 billion rubles. In the third quarter, service revenue decreased by 1.0 percent to RUB 78.1 billion. This figure is higher than a quarter earlier, thanks to an increase in revenue from data transmission and digital services. At the same time, the company noted, the decrease in revenues from international roaming in the context of border closure continues to negatively affect revenue.
With the removal of severe restrictions in a number of regions in the third quarter, communication salons gradually began to open, however, despite the positive dynamics of purchasing activity compared to the second quarter, the recovery of pre-quarantine indicators is not observed. Revenue from the sale of equipment and accessories in the third quarter decreased by 23.9 percent, to 8.4 billion rubles. The total number of visitors in MegaFon salons was 24 percent lower than a year earlier.
We managed to compensate for the negative effect of the decrease in revenue thanks to cost control. As a result, the company increased its OIBDA by 2.3 percent to 39.9 billion rubles, reducing low-margin equipment sales and advertising and general business costs.
The company actively invested in the maintenance and development of the network in the face of the increased load on the infrastructure in 2020, and the main savings of CAPEX occurred due to the transfer of projects not related to the construction and modernization of the network to a later date. In the third quarter of 2020, the total number of MegaFon base stations increased by 6.8 percent to 192 thousand, while in the modern 4G / LTE segment the growth was more than 22 percent. Only in the LTE and LTE Advanced standard, about 3 thousand base stations were put into operation.