November 19, 2013 / 12:15 PM / 7 years ago

UPDATE 1-Russian mobile firm MTS cuts 2013 sales forecast

* Sees 2013 revenue rising 5 pct vs 5-7 pct previously

* Economic slowdown bites

* Q3 sales up 4 pct yr/yr, profit declines

MOSCOW, Nov 19 (Reuters) - Russia’s top mobile phone operator, MTS, cut its 2013 sales growth forecast on Tuesday due to weakening economic conditions in its main markets.

The Russian economy is growing at the slowest pace in four years as investments and consumer demand have slackened, leading the Economy Ministry to cut its long-term economic growth forecast to 2.5 percent from 4 percent.

MTS, which in Russia is ahead of rivals Megafon and Vimpelcom by subscribers, expects sales to grow by at least 5 percent this year compared with its previous guidance for growth in the range of 5-7 percent, it said in a statement.

“We are surely seeing a certain market slowdown,” Chief Executive Officer Andrei Dubovskov said. He added the company was also likely to deliver “single-digit” percentage sales growth next year.

MTS is the second Russian mobile firm to report it is struggling to grow sales. Vimpelcom, which has a large presence overseas, said on Nov. 6 its third-quarter sales fell 1 percent, hit by competition and tougher regulations.

MTS, part of oil-to-telecoms conglomerate Sistema, reported a 4 percent rise in third-quarter sales to 103 billion roubles ($3.17 billion). It said the lack of a 3G mobile license in Ukraine, its second-biggest market after Russia, hampered growth.

Net profit at the company, which has 100 million mobile subscribers, declined 14 percent to 18.1 billion roubles ($556.2 million) from 21 billion a year ago when it recorded a $100 million forex gain.

After adjusting for one-off items, the net profit was up 3 percent, year-on-year. Analysts, polled by Reuters, forecast a net profit of 18.4 billion roubles.

MTS also confirmed its full-year core profit margin view of higher than 43 percent as it posted a 4.5 percent rise in quarterly operating income before depreciation and amortisation to 46.3 billion roubles or 44.8 percent of sales.

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