March 19, 2018 / 1:48 PM / a month ago

Russia's MTS expects slight revenue growth in 2018

MOSCOW, March 19 (Reuters) - Russia’s top mobile phone operator MTS said on Monday it expected its revenue to grow slightly in 2018 and underlying profits to be stable year-on-year.

MTS said revenue growth would be supported by rising data usage but adjusted operating income before depreciation and amortisation (OIBDA) would be hit by higher labour costs and spectrum fees as well as competitive factors.

“We remain optimistic on the prospects in our key markets, particularly in consideration of the stable macroeconomic environment, competitive intensity, upcoming regulatory changes and the potential for cost optimisation,” MTS’s newly-appointed Chief Executive Officer Alexei Kornya said in a statement.

The company, which is 50-percent owned by Sistema , also said the adoption of new reporting standards would have an impact on revenues and add an estimated 20 billion roubles ($345.5 million) to its adjusted OIBDA in 2018.

Excluding this impact, adjusted OIBDA would be stable.

It forecast combined capital spending at 160 billion roubles for 2018 and 2019, the same as in 2016-2017, with the outlook taking into account the need to comply with the data storage law as well as further investments in high-speed mobile networks.

Kornya said MTS was committed to offering attractive returns for shareholders. The company said it expected to spend 52 billion roubles on dividends in 2018, the same as last year.

For 2017, the company reported a 1.7-percent increase in revenues to 442.9 billion roubles and a rise in net profit of 15.6 percent.

The company also said its fourth-quarter revenues rose 5 percent and adjusted OIBDA jumped 8 percent but that net profit slid 12 percent from the year earlier.

Megafon , Russia’s No.2 mobile phone operator, said last week it would not pay dividends in 2018.

$1 = 57.8900 roubles Reporting by Maria Kiselyova; Editing by Adrian Croft

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