MTS announces unprecedented regional subscriber growth, improved margins and commencement of activities in Belarus.
Revenue increases 80% for the third quarter ended 30th september 2001 compared to the same period last year.
Financial Highlights for the 3rd quarter ended 30th September 2001
- Revenue totalled US$262.6 million for the nine months ended September 2001, up 80% compared to the same period last year;
- EBITDA up 128% to US$138.5 million compared to the same period last year;
- Net income up 174% to US$78.4 million compared to the same period last year;
- Average revenue per user (ARPU) stabilising in the 3rd quarter 2001 at $39.
Financial highlights
|
Third Quarter
2001 (US$, 000) |
Third Quarter
2000 (US$, 000) |
Change, % |
Nine months ended
Sept 30, 2001 (US$, 000) |
Nine months ended
Sept 30, 2000 (US$, 000) |
Change, % |
|
|
|
|
|
|
|
|
| Net revenue |
262,563 |
146,110 |
80% |
634,756 |
368,178 |
72% |
| EBITDA |
138,543 |
60,864 |
128% |
298,637 |
171,433 |
74% |
| EBITDA margin |
53% |
42% |
N/a |
47% |
47% |
N/a |
| Net income* |
78,369 |
28,560 |
174% |
144,622 |
75,878 |
91% |
| Capital expenditures |
132,520 |
64,372 |
106% |
295,569 |
156,006 |
89% |
| EPS, US$ |
0,039 |
0,015 |
169% |
0,073 |
0,044 |
66% |
|
|
|
|
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* In August 2001, a new law regulation taxation of income became effective. Under that law, effective from January 1, 2002, the statutory income tax rate will be 24%. This reduction in the statutory income tax rate resulted in the recognition of a deferred tax benefit of approximately $23 million in the third quarter of 2001 (which gives a $23 million non-cash increase in net income).
Operating Highlights for the 3rd quarter ended 30th September 2001)
- Customer base grows 163.9% to 2,346,000 at 30th September 2001 (889,000 at 30th September 2000);
- MTS’ regional customer base increased eight-fold to 420,000 at the end of September 2001 compared to 52,000 at the end of September 2000. This includes growth through consolidation of acquisitions — 145,000 (ReCom as of 25 April 2001 and Telecom-900 as of 15 August 2001);
- MTS won tender for GSM license for Belarus;
- MTS continues its expansion into the regions, having launched Nizhni Novgorod, and Kirov networks recently.
MTS maintains its position as number one operator in Russia in terms of customer base and number of operational regions.
|
Third Quarter
2001 (US$) |
Third Quarter
2000 (US$) |
Change, % |
Nine months ended
Sept 30, 2001 (US$) |
Nine months ended
Sept 30, 2000 (US$) |
Change, % |
|
|
|
|
|
|
|
|
| Subscribers total, including |
|
|
2,346,000 |
889,000 |
163.9% |
| Moscow license area |
|
|
|
1,926,000 |
837,000 |
130.1% |
| Regional license area |
|
|
|
420,000 |
52,000 |
707.7% |
| ARPU (US$) |
39 |
58 |
(32.7%) |
37 |
61 |
(39.3%) |
| MOU (minutes) |
167 |
175 |
(4.6%) |
154 |
156 |
(1.3%) |
| Subscriber churn rate (%) |
5.4% |
5.1% |
N/a |
15.5% |
17.2% |
N/a |
| Subscriber acquisition costs, US$ |
49 |
64 |
(23,4%) |
56 |
73 |
(23.3%) |
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Moscow, Russian Federation, 20th November.
Mobile TeleSystems OJSC (NYSE: MBT), Russia’s leading mobile operator, today announced its financial and operating results for the nine months ended 30th September 2001, showing:
- Strong growth in customers, usage and revenue;
- Rapidly growing earnings before interest, tax, depreciation and amortisation (“EBITDA”) and net income;
- Encouraging trends in average revenue per user (“ARPU”);and
- Declining subscriber acquisition costs (“SACs”) per subscriber.
Commenting on the results, Mikhail Smirnov, MTS’ President and Chief Executive Officer said: "MTS is again performing increasingly strong. We are clearly the number one operator in the regions, and are still expanding. Over the past nine months the regional customer base increased eight-fold compared to the same period last year.
“MTS is showing rapid growth and improved margins. The underlying trends mean we are well on track to achieve the targets we set ourselves at the beginning of the year. We have also entered a market outside of the Russian Federation, having won a license to operate in Belarus”.
Financials
MTS has made strong progress since last year. MTS’ Q3 2001 revenue totalled US$263m, almost doubling from US$146 in Q3 2000.
EBITDA in the third quarter of 2001 was up 128% on Q3 2000 to US$138.5m compared to US$60.9m in the third quarter of 2000. EBITDA margin showed 53% in third quarter 2001 compared to 42% in the same period last year.
Net income grew almost threefold in the third quarter of 2001 to US$78.4m compared to Q3 2000.
Average Revenue per user (ARPU)
ARPU has stabilised at the level of $39 in third quarter 2001 compared to second quarter 2001.
MOU was 167 min in third quarter 2001 compared to 166 min in the second quarter 2001.
Customers
Consolidated MTS’ customer base totalled 2,346,000 at the end of September 2001, an almost threefold increase on the first nine months of 2000 from the 889,000 at 30th September 2000.
MTS’ Moscow license area customer base more than doubled over the first nine months of 2001 compared to the same period last year, having reached 1,926,000 from 837,000 at 30th September 2000.
MTS’ regional customer base has witnessed an unprecedented growth, increasing eight-fold to 420,000 at the end of September 2001 compared to 52,000 at the end of September 2000. . This includes growth through acquisitions of 145,000 as a result of consolidation ReCom subscribers (28,000 as of 25 April 2001) and Telecom-900 acquisition (117,000 subscribers as of 15 August 2001).
MTS remains the largest mobile operator in Russia and in the Moscow license area, maintaining in Moscow license area a market share of 57% in the third quarter of 2001.
|
For further information contact:
MTS: Eva Prokofyeva
Press Secretary
tel: +7 (095) 104-49-38
e-mail: eva@mts.ru
Investor Relations department
tel: +7 (095) 766-01-03
Fax: +7 (095) 766-01-00
e-mail: ir@mts.ru |
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of MTS, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to conform them to actual results. We refer you to the documents MTS files from time to time with the U.S. Securities and Exchange Commission, including our most recent Form 20-F. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” in our Form 20-F, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, potential fluctuations in quarterly results, our competitive environment, dependence on new service development and tariff structures; rapid technological and market change, acquisition strategy, risks associated with telecommunications infrastructure, risks associated with operating in Russia, volatility of stock price, financial risk management, and future growth subject to risks.
Mobile TeleSystems OJSC (NYSE: MBT) is Russia’s leading GSM 900/1800 mobile cellular operator. MTS has GSM 900/1800 licenses to provide mobile cellular telephony services in 46 regions of the Russian Federation, covering 86 million people or 56% of the country’s population. MTS network has operations in 26 regions, which cover more than 55,6 million people or 38% of the population of the Russian Federation.
Additional information about MTS can be found on MTSs website at www.mtsgsm.com |
MTS condensed consolidated balance sheets at December 31, 2000 and September 30, 2001
Amounts in thousands of U.S. dollars, except share amounts
|
December 31, 2000 |
September 30, 2001 |
|
|
|
|
| CURRENT ASSETS: |
| Cash and cash equivalents |
$75,828 |
$17,194 |
| Short-term investments |
170,000 |
120,000 |
| Trade receivables, net |
15,817 |
28,443 |
| Accounts receivable, related parties |
4,937 |
3,400 |
| Inventory, net |
23,551 |
19,875 |
| Deferred tax asset |
2,071 |
11,594 |
| Other current assets |
37,780 |
71,478 |
| Total current assets |
329,984 |
271,984 |
|
|
| PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $87,676 and $149,079, respectively |
439,307 |
716,590 |
|
|
| INTANGIBLE ASSETS, net of accumulated amortization of $33,648 and $46,179, respectively |
57,586 |
73,602 |
|
|
| LICENSES, net of accumulated amortization of $43,913 and $69,293, respectively |
204,996 |
287,365 |
|
|
| GOODWILL, net of accumulated amortization of $14,756 and $19,334, respectively |
27,984 |
23,405 |
|
|
| SUBSCRIBER ACQUISITION COSTS, net of accumulated amortization of $74,803 and $0 respectively |
27,553 |
— |
|
|
| DEBT ISSUANCE COSTS, net of accumulated amortization of $900 and $1,103, respectively |
450 |
248 |
|
|
| INVESTMENTS IN AND ADVANCES TO AFFILIATES |
13,472 |
1,485 |
|
|
| Total assets |
$1,101,332 |
$1,374,679 |
|
|
|
|
|
|
MTS condenced consolidated balance sheets at December 31, 2000 and September 30, 2001
Amounts in thousands of U.S. dollars, except share amounts
|
December 31, 2000 |
September 30, 2001 |
|
|
|
|
| CURRENT LIABILITIES: |
| Accounts payable, related parties |
$3,792 |
$3,510 |
| Trade accounts payable |
39,864 |
75,604 |
| Deferred connection fees |
14,923 |
20,729 |
| Subscriber prepayments and deposits |
44,610 |
53,901 |
| Debt, current portion |
24,000 |
9,825 |
| Accrued liabilities |
38,175 |
50,838 |
| Dividends payable |
1,038 |
3,997 |
| Other payables |
16,360 |
56,079 |
| Total current liabilities |
182,762 |
274,483 |
|
|
| LONG-TERM LIABILITIES: |
| Debt, net of current portion |
23,305 |
31,500 |
| Deferred connection fees, net of current portion |
16,630 |
25,581 |
| Deferred taxes |
72,083 |
73,312 |
| Total long-term liabilities |
122,954 |
144,321 |
| Total liabilities |
300,248 |
411,840 |
| MINORITY INTEREST |
— |
7,437 |
|
|
| SHAREHOLDERS’ EQUITY: |
| Common stock |
50,558 |
50,558 |
| Treasury stock |
10,206 |
10,206 |
| Additional paid-in capital |
502,511 |
515,166 |
| Retained earnings |
258,221 |
399,884 |
| Total shareholders’ equity |
801,084 |
955,402 |
| Total liabilities and shareholders’ equity |
$1,101,332 |
$1,374,679 |
|
|
|
|
|
|
MTS condenced consolidated statements of operations for the three and nine months ended september 30, 2000 and 2001
Amounts in thousands of U.S. dollars, except share and per share data
|
Three months ended
September 30
2000 |
Three months ended
September 30
2001 |
Nine months ended
September 30
2000 |
Nine months ended
September 30
2001 |
|
|
|
|
|
|
| NET REVENUES |
| Service revenues, net |
$134,112 |
$246,055 |
$327,845 |
$592,024 |
| Connection fees |
4,050 |
5,911 |
10,957 |
15,026 |
| Equipment sales |
7,948 |
10,597 |
29,376 |
27,706 |
|
146,110 |
262,563 |
368,178 |
634,756 |
|
|
| COST OF SERVICES AND PRODUCTS |
| Interconnection and line rental |
11,232 |
25,506 |
28,140 |
57,370 |
| Roaming expenses |
12,926 |
23,453 |
29,949 |
50,566 |
| Cost of equipment |
10,620 |
9,221 |
33,073 |
26,314 |
|
34,778 |
58,180 |
91,162 |
134,250 |
|
|
| OPERATING EXPENSES |
32,049 |
30,984 |
69,998 |
85,423 |
|
|
| SALES AND MARKETING EXPENSES |
19,003 |
29,559 |
37,885 |
108,133 |
|
|
| PROVISION FOR DOUBTFUL ACCOUNTS |
353 |
1,884 |
2,305 |
2,565 |
|
|
| DEPRECIATION AND AMORTIZATION |
22,975 |
34,982 |
61,788 |
93,547 |
|
|
| Net operating income |
36,952 |
106,974 |
105,040 |
238,391 |
|
|
| CURRENCY EXCHANGE AND TRANSLATION LOSSES (GAINS) |
(460) |
586 |
263 |
1,181 |
|
|
| OTHER EXPENSES (INCOME): |
| Interest (income)/ expenses |
(791) |
690 |
4,979 |
(4,507) |
| Other expense (income) |
1,435 |
1,101 |
(260) |
3,238 |
| Total other expenses (income), net |
644 |
1,764 |
4,719 |
(1,269) |
| Income before provision for income taxes and minority interest |
36,768 |
104,624 |
100,058 |
238,479 |
|
|
| PROVISION FOR INCOME TAXES |
10,120 |
24,529 |
28,788 |
64,975 |
|
|
| MINORITY INTEREST |
(1,912) |
1,726 |
(4,608) |
1,329 |
|
|
| NET INCOME |
$28,560 |
$78,369 |
$75,878 |
$144,622 |
|
|
| Weighted average number of shares outstanding |
1,961,889,991 |
1,993,326,138 |
1,741,080,873 |
1,993,326,138 |
|
|
| Per common share - basic and diluted: |
| Net income |
0.015 |
0.039 |
0.044 |
0.073 | |
